The once ‘bargain hunter’ stereotype of TJ Maxx stores and it’s counterparts is proving to pay off and inspire others. Despite reporting low numbers in early 2017, TJ Maxx and HomeGoods reported a strong Q4 with a net sales increase of 16%, grabbing the attention of many others.

This payoff for discount retailers such as TJ Maxx and Nordstrom Rack is tempting upscale department stores such as Macy’s to change their business plans. According to Macy’s CEO Jeff Gennette more than 70% of millennials shop at off-price stores monthly. In an effort to capture some of those shoppers, Macy’s plans to expand their discount backstage concept to more than 100 stores in 2018.

Macy’s backstage has been compared to TJ Maxx and Nordstrom Rack. They sell Macy’s brands at steeply discounted prices of up to 80% off. Macy’s has also been inspired by discount retailers in its shoe departments, offering self-retrieving shoe displays. Younger shoppers are no longer coming into department stores for the great customer service, in fact, they would much rather self-service and retrieve the shoe themselves if it meant paying a little less.

Even better, this selling model encourages buyers to stop into store locations more frequently with hopes of snagging a great deal at a great price. If they come back tomorrow, it might be gone.

If we look at the bigger picture, why are discount shoppers not convinced to losing this in-store experience to shop online like many others? The main reasons: a mix of merchandise, one-of-a-kind finds, and higher brands offered at a much greater discount than online.

The same reason why online shopping has taken off; convenience, easy price comparison, and transparency in pricing, is also the same reason why online shopping won’t win over every consumer. Online shopping is often priced more competitively because they are eliminating the middle-man, and carrying their items in bulk. On the other side of the house, a shopper at TJ Maxx can stop in and find a past-season jacket that retails $400, in their size only, priced at $89. As shoppers continue to demand more- they will flock to where they are most satisfied. E-commerce retailers simply can’t offer deals like that.

Wouldn’t it be comical if Amazon offered one quantity of something? A blue cashmere sweater in a size small? It simply wouldn’t make sense. This discount retailer approach is a space that Amazon will never be able to touch. In this case, one size cannot fit all.

What does this mean for Category Management? It means that finding a niche that will not be eliminated by the power of technology and e-commerce is not impossible. Keeping a close eye on the everchanging shopper preferences will remain key for retail success.

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