FRAMINGHAM, Mass. — Discount retailers TJ Maxx and Saks Off Fifth outlets plan to dive into e-commerce waters this year, according to reports.
It’s not the first time for TJ Maxx, which abandoned ship in 2005, according to Reuters, following a failed attempt that cost the company $15 million. The challenge discount retailers face is in large part due to the very nature of their business model — that is, ever-changing inventory that moves off shelves fast, too fast to keep e-commerce sites updated, which leads to unhappy consumers and lost revenue, as happened to TJ Maxx in 2005.
However, software has come a long way since then, and the Big Data that retailers now have access to will put even discount retailers such as TJ Maxx and Saks Off Fifth in a far better position to track inventory and keep their e-commerce sites updated. TJ Maxx has prepared itself well for its second foray into e-commerce territory. The company hired e-commerce executive Elaine Boltz in 2011 and purchased pure-play e-commerce retailer Sierra Trading for $200 million in 2012.
Meanwhile, Saks Off Fifth is currently undergoing a three-year, $95 million systems renovation to support e-commerce operations and is spending an additional $6 million to commence online commerce this year instead of next year. Reuters quotes Saks CEO Steve Sadove as saying Saks Off Fifth will have a limited online assortment mostly made up of top selling merchandise.
The move to tackle e-commerce comes just in time for the holidays, and shoppers who seek discounted merchandise but who would prefer to avoid lines and holiday crowds will have two new e-commerce sites from which to choose. The move also comes on the heels of H&M’s much-anticipated announcement that it has at last opened for business online in the U.S.