Welcome to The Silent Shopper, the newsletter for retail operators, retail investors, and of course, shoppers. Thank you for joining me for Edition 3.
Today, I will be sharing insights and recommendations from a recent store visit to the TJ Maxx in Chelsea, NYC. I was very pleasantly surprised, as this was the strongest experience I have had across the TJX businesses in NYC. This edition is organized into three sections: (1) Company and Store Background, (2) Store, Section, and Product Navigation, and (3) Merchandising.
1. Company and Store Background
I was inspired to do this store visit to test whether TJX’s 2Q25 performance translated to the in-store shopping experience for the customer. Net sales rose 7%, same store sales were up 4% (outperforming both management guidance and analyst forecasts), and pre-tax profit reached 11.4% (+50bps from 2Q24). I am also a Maxxinista and have found some of my very favorite home (e.g., luxury sheets, beautiful frames) and clothing items (e.g., Theory dresses for work, Lululemon Align Short dupes) at TJX stores.
TJ Maxx (NYSE: TJX) is an American off-price department store chain, founded in 1976 in Framingham, MA and led today by Ernie Herrman. In the late 1980s, TJ Maxx reorganized itself under the TJX umbrella - which now includes TJ Maxx, Marshalls, HomeGoods, Sierra, and Homesense businesses in the US - and has grown to 1,200 US stores, many of which are anchor tenants at strip malls and shopping districts. With the rise of value-orientation in retail, TJ Maxx’s off-price model, frequent inventory turnover, and urban expansions (Columbus Circle location, for example, expanded from 18k to 46k sq ft in 2019 renovation) has made it exceptionally successful across shopper demographics. The company has a market cap of $150B (3x that of Chipotle, equal to that of Unilever) and revenue of $56B (about half of Target, in-line with Publix and HE Butt). TJX has appreciated 13% in the last year, making it among the top-performing retail securities.
TJ Maxx has six Manhattan locations (UWS, Columbus Circle, UES, Chelsea, Soho, Fidi). Chelsea is a larger store (there are 16 checkout stations, compared to usual ~10) and has expansive Runway (designer offerings) and home (similar to HomeGoods) sections. This location is positioned above a Marshalls store, and there is some inventory overlap (e.g., Marshalls has no Runway, limited jewelry, more shoes). One of my favorite parts of this location is that it is all above ground with ample natural light. All of the other NYC TJ Maxx locations, besides Columbus Circle, have half or more of the store underground.
2. Store, Section, and Product Navigation
On the most macro level, each section of the store (e.g., luggage / travel, women, restrooms, fitting rooms) is clearly and accurately marked with large overhanging signs. See below the seasonal inventory as an example.
This keeps the quickly evolving merchandise somewhat organized in a large store, primes the shopper for what they will discover, and eliminates some Associate time otherwise dedicated to directing shoppers around the store. It is particularly helpful for seasonal merchandise that will eventually need to be moved out overnight.
There is a similar sign for shop tjmaxx.com, which is a great use of wall real estate, and takes advantage of shoppers already looking upwards to navigate the store. See another good use of wall real estate with long dresses below.
Because this store is so large, the aisles feel vast, even compared to locations outside NYC. However, the first improvement area I will introduce is the spacing of racks within aisles. In certain sections (e.g., women's intimates, men's sweatshirts), the racks were spaced so closely that I literally felt like I was squeezing through. This not only creates a hassle for the shopper in the aisle (awkwardly maneuvering between the merchandise), but also for fellow shoppers passing by (who will avoid going down that aisle). See below for examples:
One area where this was actually very well done was the baby section. These aisles were largest and absolutely accommodating of a stroller (facilitated by the column).
Beyond spacing out the racks more (there is room), I expect this issue is exacerbated by the racks naturally moving as shoppers interact with merchandise and move throughout the store. I would recommend placing white tape corners (so it is not noticeable) where the racks should sit on the floor. This is commonly seen in manufacturing or industrial settings for safety purposes. As Associates are replacing merchandise, they can also nudge the racks back into place to ensure free flowing aisles.
With the seasonal transition from Summer to Fall, this location has many clearance racks. At previous TJ Maxx visits, I have sometimes seen the clearance identified by a small sign above the rack. Otherwise, a shopper must look at the price tag of an item individually. This store featured yellow balloons above clearance racks, which I thought was a fantastic idea. Balloons have a negligible cost to purchase, set up, and take down, the yellow balloon matches the yellow clearance tag (see below), and the balloons are very visible around the store, increasing the likelihood of being sold.
My second and most significant improvement area is the signage above racks- this should be eliminated. Stores do not have strong inventory records, and this location used signs to designate hubs for certain brands and prices. This additional layer of classification (a) adds complexity, (b) requires additional work / organization (e.g., put this women's dress back -> put this women's Max Studio dress back on the Max Studio rack), and (c) was not done accurately. See below a rack that should be dedicated to House of Harlow- there were no House of Harlow pieces on the rack.
Here is another example in the men's Runway section. All of the shirts on this rack were Marine Layer, which is certainly not a Runway brand. Runway pieces, especially those on the Runway displays, are typically steamed and kept more nicely.
Finally, see below a similar problem but with pricing instead of brand. I find price to be a more serious infraction than brand, as a shopper may intentionally navigate here looking for an item under $20.
What I would suggest instead is improving the segmentation of categories (e.g., dresses) within the store. See below, for example, where we have a women's work dress and a women's sun dress positioned next to each other. This location has plentiful inventory of dresses in both categories, so I felt this was a missed opportunity to help the shopper identify what they are seeking more efficiently. Although part of the TJX magic is the treasure hunt, it is also important to cater to the shopper seeking a more efficient experience.
3. Merchandising
This is constant across NYC TJ Maxx stores, but I was impressed by the selection of brands and products (somewhat curated for Fall), particularly in the women's Runway section. We will start there.
There are two forms of magic in TJX: (a) as mentioned, the sense of the treasure hunt and (b) finding something you feel like should not be selling at such a discount. See how well done these shirt and skirt combinations (primarily Ellie Tahari, Theory, Veronica Beard, Rag & Bone) are for the fall. This does not appear like an off-price store:
As further evidence, look at these racks of blouses with the dresses in the back. All beautiful pieces for fall (note the colors, fabrics, and styles), brands you would expect at Neiman Marcus (e.g., L'Agence, Vince, Helmut Lange), and cleanly organized (zoom up to see accurate sizing order). I had no intention of buying a fall dress but was certainly enticed to after passing this rack.
Outside of women's runway, this continues in the jewelry section, where they had a variety of moissanite pieces I have never seen in-store before. Also notice how you can see the prices and sizes from the jewelry case, avoiding Associate utilization to unlock the case, confirm the correct item, read the price, and so on (or a missed sale from a shopper who does not ask).
I also noticed these jumpsuits prominently displayed on an end cap in the women’s active section. These have been very popular on social media (and airports), and I liked how the color options were fall-orientated. The fabric looks and feels identical to Beyond Yoga's Spacedye fabric.
Note the CeraVe, Innis Free, and Mario Badescu items in the skincare section (you can buy all of these at Ulta for full price).
Additionally, I thought the Dubai chocolate items were another great touch given their popularity. In general, I try to avoid buying most trendy and seasonal products, but I think I echo many shoppers in saying how delightful it is to selectively test them at more palatable prices thanks to TJX.
My final improvement area is the checkout queue. I have never been to this location where there has not been a line, and a missed opportunity was the merchandise lining the sides of the line. It felt like a random amalgamation of excess, sometimes broken / damaged inventory, and I was compelled to scroll on my phone rather than add items to my cart. Some of the items in this section included:
Nail products, many of which were opened and used. Note there is typically an Associate staffed to the beauty section to try to prevent this in part
Lunch boxes, despite there being a dedicated backpack and lunch box subsection in travel
College dorm shower sets that I did not see in the home section, these items were absolutely misplaced
Additional kitchen and bathroom storage, which does not strike me as a last-minute impulse buy. As above, I would want to compare these to other options in home
Candy / snacks / drinks and reusable shopping totes, which are placed appropriately
I would submit that TJX often hangs onto broken and damaged inventory for too long instead of writing it off. This propels the theory that they sell used merchandise and dampens the impression of the higher priced items in store.
Beyond that, I suggest TJX move all food-related inventory to this section of the store. My reasoning is below:
Customers have likely made their final selection of more expensive items when they enter this area to check out. Adding on a $15 storage container (that they will want to compare with others in the back of the store) is unrealistic but adding on a $3 package of peach gummy rings is more logical
Similarly, a food item requires far less contemplation than a piece of clothing you want to try on or a lunch box your child has to like for the full school year. A customer sees sea salt potato chips, perhaps checks the ingredients and expiration date quickly, and is ready to purchase as they are called from the queue to checkout station
Food obviously expires, so it needs to turnover more quickly relative to other TJ Maxx inventory. In the store, it is easy to avoid the food section by walking around it. Force the customer to interact with these products instead
TJ Maxx trips are longer in duration compared to single-brand retailers given the breadth of sections and quantity of merchandise. Just as a customer is primed to notice their thirst with the fridge of drinks, TJX can better prime the shopper to crave a snack and provide the full portfolio of food options to choose from, increasing the likelihood of purchase
Finally, food items are typically quite light, whereas the current food section is at the back of the store near the stock room. Limit labor strain by placing lighter items a farther distance away and keeping heavy ones close
4. Additional Comments on Shopper Operations
Part of what made this such a strong experience was the store amenities and CX journey. I will list a few below, as I have no additional recommendations here:
Bathroom is open to everyone, cleaned, and restocked
There was one Associate dedicated to cleaning the floor and ~10 dedicated to restocking and reorganizing inventory. Everyone is working efficiently and friendly with customers; no one on their phone, listening to music, chatting with colleagues, etc. Similarly, all lights worked, and I did not see any broken racks or hangers
There is a cart corral at the entrance of the store, as well as midway through near the bathroom. This is the perfect time when customers need to set merchandise down
Albeit sometimes cluttered, racks are clean (e.g., no random hangers, clothes falling off) and generally organized by size. I liked the use of the dual rack for shorts pictured below
There were two Associates dedicated to the jewelry case, and they used a FIFO ticket system to work through customers. This helps organize the line a bit and encourages shoppers to linger in neighboring sections, like the lower-priced jewelry and beauty
There were also two Associates dedicated to the fitting rooms. There was no line at all, and they also managed returning merchandise
There is often a line to checkout, but wait times are shorter than expected. This location has 16 cashier stations, and 12 of them were being used around 2pm on a weekday
My checkout Associate was friendly and efficient. Service was closer to that of Trader Joe's than Aldi (e.g., ensured I knew return policy, complimented me on my selection, pitched the TJX credit card in a non-salesy way)
A Product / Service I Have Been Loving
To close this edition, I have been loving ClassPass. I am fortunate that my company is more relaxed with remote work at the end of the summer and have therefore attended many workout classes I otherwise would not be able to via ClassPass. My current favorites are (1) Barry's, (2) F45, and (3) BodyRok (enjoyed this much more than SolidCore). I love the break from thinking about topic XYZ for an hour and always feel like I have been given a second morning to reset the day afterwards. Unfortunately, this will be a temporary love, as the service is designed to avoid peak times and encourage you to try smaller studios.
One of my largest NYC complaints is the workout class and gym scene (price < $300, variety and quality of classes, hours of operation and locations). Perhaps this warrants a dedicated edition, but if you have any suggestions (or would like to discuss anything else in this newsletter), please reply to this email.
Thank you for reading, and I hope you will join me next time.
Best Wishes,
TSS