Off-Price Retailers Are Now Selling Online. Will Shoppers Follow?

Exploring the future of off-price sellers going online–can they compete?

This article was published in ‘Business of Fashion on January 6, 2020

With Marshalls being the latest off-price chain to launch e-commerce, and outlet mall experimenting with web sales, can similar retailers compete in a marketplace already crowded with discounts? Industry experts, including MasonHub Founder & CEO Donny Salazar, weigh in.

Excerpt and Article by Chavie Lieber

Off-price stores and websites often don’t replenish sold-out items, so they need to track inventory closely, said Donny Salazar, founder of L.A.-based fulfillment company MasonHub who was also an executive at Gilt Groupe for four years.

Otherwise, shoppers might place orders the company has no way to fulfill. The constantly shifting assortment also creates complications.

“In traditional e-commerce, you shoot one item and keep selling it over and over, but the SKUs of off-price are constantly changing, so the cost of production is much higher, he said.

Scrolling through endless pictures of handbags doesn’t offer the same satisfaction of scouring racks for that lucky find. And online orders can prove disappointing once they arrive at a customer’s home, days after they’ve come down from the high of scoring a bargain.

“I’ve been using the [Marshalls] site mainly to browse,” said Dianna Baros, a self-described diehard off-price shopper and budget fashion blogger. “Most of what you order online is a letdown, which is why I prefer to discover hidden gems in person.”

T.J. Maxx has some advantages, including its global network of buyers, who can ensure that its stores and website are better-stocked than competitors, Saunders said.

“If you have the right merchandise, people will do whatever they can to get it,” Salazar said.