TJX Hopes Marketing Can Offset Competition
August 22, 2005-- Home Textiles Today,
TJX Companies is taking a “hard look” at boosting its marketing efforts during the third and fourth quarters to offset mounting competition from other retailers that are consolidating and growing, the company reported during its second quarter earnings call last week.
Edmond English, president and CEO, declined to offer specifics about the new marketing strategies, but said the company would increase its marketing across most of its divisions, particularly the Marmaxx divisions.
“That is an area we've never focused that aggressively on,” he said. “We still believe this is very much a word-of-mouth and consistent 365-days-a-year traffic business. But we think maybe getting our name out there a little more aggressively in these competitive times might be a good opportunity for us to drive some additional traffic, particularly with places like Bob's (Stores) and A.J. Wright. That customer is more sensitive to marketing kinds of tactics.”
Already, the company altered its back-to-school TV advertising campaign for this year, starting it earlier and extending it to run longer.
Another marketing effort under way, specifically aimed at improving brand awareness of the HomeGoods division, is the company's “dual branding” initiative it rolled out in two markets during the second quarter, and which it will continue to use going forward. This effort consists of adding HomeGoods signage to the company's superstores, which combine HomeGoods with TJMaxx or Marshall's.
Similarly, last month TJX Companies combined its www.TJMaxx.com and www.HomeGoods.com e-commerce sites, “offering our online customers a more robust selection of product at one site,” English said. “Combining these sites brings the dual brand initiative we've undertaken in our brick-and-mortar superstores to the online channel, and presents an opportunity to drive traffic to both Web sites to introduce TJMaxx customers to HomeGoods and vice versa.”
This new online superstore also raises HomeGoods' brand visibility on a national level and expands home fashions offerings to TJMaxx customers, he added.
In news related to the second quarter, the company used a “more tactical approach,” English said, to flow inventory. While it cleared goods as it usually does in July, the company extended the summer selling season for some categories and, at the same time, introduced some fall merchandise early.
“Instead of letting the clearance hatchet fall through our entire assortment, we strategically zigzagged through the transitioning of seasons,” English explained. “And although we didn't see the top line improvements we would have liked, it paid off big in margin.”
And at HomeGoods, while a lower average ticket pressured comparable sales, unit sales and transactions were up in the quarter, “reflecting what we see as a healthier business,” he continued.
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