At a time when traditional department stores are floundering, off-price retailers are thriving. According to an industry report, roughly two-thirds of consumers who shop for clothes do so at off-price retailers.
No wonder brands like T.J. Maxx and Ross are continuing to build a loyal fan base. According to Placer ai, an advanced foot traffic analytics platform, both brands enjoyed Year-over-Year growth in this year’s Back-to-School season. During August 2019, the number of visits to T.J. Maxx increased 2% compared to the same month in 2018, after seeing a massive 8.7% increase between December 2017 and December 2018.
On the other hand, Ross enjoyed a massive 6.2% jump in the number of visits in August 2019 compared to the same month in 2018.
So why are off-price retailers so successful?
One of the main reasons is the “hunting” experience they provide. For instance, off-price retailers offer unique products in limited supply for a short period of time. This is what makes shopping at their stores a fun experience. The excitement of finding something that you didn’t know was there and will probably not be there tomorrow is what drives people to these stores.
Offering products at more affordable prices is another reason people are drawn to off-price retailers. Trends change so quickly these days, people prefer to shop as often as they see the need. In other words, consumers like to search for in-season items and tend to be “real-time” shoppers.
If you are not in the off-price business, there are other ways to create a compelling experience to attract customers – this is where 80/20 rule applies. You will continue to sell 80 percent of staple products and services while experimenting with the remaining 20 percent with new products and ideas. Restaurants are a great example of this rule. While they offer the chef’s signature menu throughout the year, they provide an exciting addition by launching a seasonal menu. It’s crucial for any business not to be stereotyped into a certain category or segment. Having a strategic mix of both staple and new products and services will result in bigger traffic and increased consumer engagement.
