- Nordstrom is increasingly leaning on its off-price concept, Nordstrom Rack, for growth.
- These discount stores now outnumber its full-price locations. Nordstrom operates 239 Rack stores and 122 full-line stores in the US and Canada.
- TJ Maxx, meanwhile, has reported strong same-store sales numbers for several years using a similar discount model.
- We compared the shopping experience at a Nordstrom Rack and a TJ Maxx to find out which off-price store is better.
Off-price shopping is on-trend.
TJ Maxx is a shining example of what is working in today’s brick-and-mortar shopping environment. The US’s largest off-price chain has reported strong same-store sales numbers for several years while department stores look on enviously, reporting weaker sales and being forced to close locations.
Rather than lose out to the off-price channel, some department stores are working on creating their own versions – for example,Macy’s is doubling down on its Backstage concept.
But Nordstrom’s off-price offshoot, Nordstrom Rack, predates TJ Maxx by three years. It was launched in 1973 in the basement of one of its full-price stores in Seattle, selling its clearance clothing. In recent years, Rack has become one of the biggest areas of growth for the company, and these stores now outnumber Nordstrom’s full-price locations.
After putting Macy’s off-price concept to the test in June, we decided to see how Nordstrom Rack fared in comparison to TJ Maxx. Here’s what we found:
We headed to a Nordstrom Rack in Manhattan’s Union Square on a sunny afternoon in July.
Much like TJ Maxx, Nordstrom Rack sells designer brands at a 30-70% discount.
The layout of the store felt a lot like a TJ Maxx …
… as did the accessories section. Cheaper jewellery hung from racks, and more-expensive pieces were locked in a cabinet.
All beauty products were self-service.
But the brands were high-end.
While its premise is the same as TJ Maxx’s, Nordstrom Rack felt like a more upscale version.
These Tumi suitcases were nearly $US400.
The store was mostly divided by brand, which made it easier to shop and less of a bargain hunt.
We spotted lots of exclusive labels — such as Rag & Bone, Theory, and 7 For All Mankind — that seem less likely to be found in a TJ Maxx store.
However, there was definitely some crossover of brands stocked in both stores.
In the clearance section, different labels were jumbled together.
About 20% of what is sold in these discount stores is clearance inventory from the company’s main stores and website, while most items are bought specifically for Nordstrom Rack.
Taking that into consideration, you might not be getting as good a deal as you think.
The layout of Nordstrom Rack’s shoe section was very similar to that of TJ Maxx, but it did feel more organised.
There were multiple sizes for some styles …
… and for well-known brands.
These stores have become a key area of growth for Nordstrom. Same-store sales for Nordstrom Rack have outpaced its full-line stores for the past three years, especially online.
For this reason, the company has been increasing the number of Rack locations — Nordstrom now operates 239 off-price stores and 122 full-line stores in the US and Canada.
Nordstrom said it would open 12 Rack stores in 2018 and only one new Nordstrom.
Next, we headed to a TJ Maxx in downtown Manhattan. Menswear and luggage were at the entrance to the store. We instantly spotted some recognisable brands such as Samsonite and Nautica.
Seasonal clothing was front and center.
We spotted dozens of well-known brands.
In some areas of the store, brands were clustered together, making it easy to shop …
… and in some cases, there were multiple sizes for one style.
But on the whole, it was pretty chaotic and lived up to the bargain-hunt promise.
The clearance section was sprawling, and the clothing felt a lot less fashionable than at Nordstrom Rack.
Both men’s and women’s wear included a part devoted to “premium designers,” where trendy brands such as Theory and Vince had their own mini-sections.
More-expensive items were boxed in plastic to prevent shoplifting.
This location was considerably larger than the Nordstrom Rack we visited, meaning there was room for homewares and furniture.
We found more popular brands here.
Overall, the products felt much less exclusive than what we found at Nordstrom Rack.
TJ Maxx is all about the bargain hunt.
Overall: On paper, these stores appear identical, offering big discounts on designer labels. While a no-frills store layout is a factor in both, there is a big difference between the quality of the brands and, therefore, the prices.
At Nordstrom Rack, the focus is on more-exclusive designer labels, meaning it’s generally more expensive. At TJ Maxx, there is a wide mix of lesser-known labels, more-affordable designer brands such as Calvin Klein and Ralph Lauren, and a few “premium” brands scattered throughout.
Overall, Nordstrom Rack was the winner. While it is more expensive, you do feel that you are shopping for better-quality products.
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