Will Shoppers Follow Off-Price Retailers Online?

The Business of Fashion’s technology correspondent Chavie Lieber explored the future of off-price sellers going online. This excerpt is from a story published on January 6, 2020. Read the full article here.

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.