Businessmodel of TJX Companies

Customer Segments

TJX operates several retail chains that cater to slightly different customer segments. These chains, however, are all discount retailers, providing products to customers at low prices. The Company’s customer, therefore, principally comprise general consumers that are shopping on a budget, looking for good deals and cheap prices. Consumers such as this are typically individuals, often from working families, who are form a lower income bracket and who consequently have less disposable income.

TJX’s key market is its native US, where it is the largest discount retailer by number of stores, via its TJ Maxx and Marshalls brands. The Company also serves a similar customer base in Canada through the Winners, HomeSense and Marshalls, as well as in Europe, in particular the UK, where it operates its TK Maxx and HomeSense chains.

Value Propositions

TJX provides value to its customers in the following was:

• Its size and standing, with the Company established as one of the largest dedicated discount retailers in the world, operating a number of popular retail chains both domestically and internationally;
• Its brand portfolio, with the Company operating several well-known retail brands, notably its TJ Maxx, Marshalls, and HomeSense chains, serving a diverse customer base;
• Its varied range of products, with the Company’s retail chains selling a broad range of products, spanning apparel, homeware, and other merchandise;
• Its extensive network of retail outlets, with the Company operating a network of more than 3,000 store locations in the US and Canada alone, as well as a large network of outlets in Europe, ensuring that it is able to reach its customers easily across all of its operating regions;
• Its low prices, with the Company offering its customers exceptional value for money with its low prices, as well as through its regular deals and discounts, and store loyalty rewards schemes. ### Channels

TJX operates a website at www.tjx.com, through which it provides information on its various brands, operating jurisdictions, and corporate activities. The Company also operates separate websites for its major brands, including www.tjmaxx.tjx.com, www.marshallsonline.com, and www.homesense.com. In addition to providing more brand-specific information, these individual websites all also function as online retail channels, allowing customers to browse products, place orders, and schedule deliveries.

TJX most notably serves its customers through its physical retail outlets. This comprises a network of more than 3,600 individual retail outlets across nine countries worldwide, namely the US, Canada, the UK, Ireland, Germany, Poland, Austria, the Netherlands, and Australia.  The Company makes its sales directly to customers through its in-store sales and service personnel.

TJX also operates its own extensive distribution network across its operating regions, with distribution centres spread across the US, Canada, and Europe. This enables the Company to serve its own outlets directly and fulfil online orders quickly and efficiently.

Customer Relationships

TJX provides a range of products and services to its customers on a self-service basis. The websites of the Company’s individual brands, notably TJ Maxx, Marshalls, and HomeSense, serve as online retail channels, through which customers can browse products, make purchases, and organise deliveries without interacting directly with members of the Company’s sales and service personnel.

TJX also provides personal assistance to customers through its teams of in-store staff, who are available directly handle customer complaints, enquiries, and product returns. Alternatively, customers are able to contact customer services representatives over the phone or via email for each of the Company’s brands, in order to receive tailored responses to enquiries.

Additionally, each of TJX’s brands offers a range of online resources, including delivery and shipping information, and FAQs that can be accessed independently. The Company and its brands also maintains a number of social media accounts, including with Facebook, Twitter, LinkedIn, and YouTube, through which it is able to interact with customers directly.

Key Activities

TJX is an off-price apparel and home fashions retailer based in the US. The Company operates aligns its operations into four reportable business segments: Marmaxx, which operates the Company’s TJ Maxx and Marshalls-branded retail chains in the US, which are collectively comprise the largest off-price retailer in the US, with a total of around 2,163 stores; HomeGoods, which comprises the Company’s HomeSense retail chain, which sells a range of discount homeware items; TJX Canada, which operates the Winners, HomeSense and Marshalls retail chains in Canada; and TJX International, which operates the Company’s TK Maxx and HomeSense retail chains across Europe and in Australia. TJX operates more 3,600 retail outlets worldwide, across nine countries spanning North America, Europe, and Australia.

Key Partners

TJX works in collaborations with a network of service providers and suppliers, allowing it to provide high-quality services to its customers. These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, comprising suppliers of various products and merchandise that are resold by the Company through its retail outlets, as well as suppliers of services, technologies and equipment that support the Company’s operations more broadly;
• Channel and Distribution Partners, comprising various distribution and logistics companies that assist the Company in transporting products and merchandise to its stores, and help to complete certain online customer orders;
• Community and Social Partners, comprising various non-profits and charitable organisations, with which the Company collaborates of on social and community projects at home and abroad; and
• Strategic and Alliance Partners, including a number of market-leading companies across multiple business sectors, with which the Company works on joint marketing, branding, and other strategic projects. TJX has a number partnerships in place. This includes a longstanding charitable partnership with Cancer Research UK, and a recent strategic alliance with Capital One to launch a Visa marketing campaign.

Key Resources

TJX’s key resources are its brand portfolio and intellectual properties, its products and supply chain, its online stores, its IT and communications infrastructure, its physical retail outlets, its distribution infrastructure, its partnerships, and its personnel.

TJX owns and or leases a number of physical properties that are key to its core retail operations. This notably includes the Company’s network of more than 3,600 leased store locations across the US, Canada, Europe, and Australia. The Company also owns and or leases a number of distribution centres and administrative office locations across the US, Canada, the UK, Australia, Poland, and Germany.

While the Company owns a number of key brands and trademarks, searches of records published by the US Patent and Trademark Office identified no patent applications filed in the name of TJX.

Cost Structure

TJX incurs cost in relation to the procurement of products and merchandise, the procurement of other services, the operation and development of its online stores, the maintenance of its IT and communications infrastructure, the operation of its sales and distribution infrastructure, the implementation of marketing and advertising campaigns, the management of its partnerships, and the retention of its personnel.

In 2015 TJX recorded total cost of sales – including occupancy costs – in the amount of $22.02 billion, the Company’s largest expense. This was followed by selling, general, and administrative costs, which totalled $5.21 billion for the year.

Revenue Streams

TJX generates revenue through the sale of various apparel, homeware, and other merchandise through its portfolio of off-price retail brands. The Company’s revenue is derived principally in the form of direct sales made to customers either at its physical outlets or online.

In 2015 TJX recorded net sales for the year in the amount of $30.94 billion, up slightly on the $29.08 billion recorded by the Company in 2014. The Company’s largest revenue generator is its Marmaxx segment, which alone accounted for annual net sales of $19.95 billion. The Company’s HomeGoods, TJX Canada, and TJX Europe segments recorded relatively even sales of $3.92 billion, $2.85 billion, and $4.23 billion respectively.