- Nordstrom is increasingly leaning on its off-price concept, Nordstrom Rack , for growth.
- These discount stores now exceed its full-price locations. Nordstrom operates 239 Rack stores in the US and 122 full-line stores.
- TJ Maxx, meanwhile, has reported strong same-store sales numbers for several years, using a similar discount model.
- We compared the shopping experience at Nordstrom Rack and 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’ largest off-price chain has reported strong same-store sales number for several years while department stores look on enviously, reporting weaker sales and being forced to close stores.
Rather than lose out to the off-price channel, some department stores are working on creating their own version, like Macy’s, which is doubling down on its Backstage concept.
Nordstrom’s off-price offshoot, Nordstrom Rack, predates TJ Maxx, however. It was launched in 1973, three years before TJ Maxx, in the basement of one of its full-price stores in Seattle, and it sold clearance clothing from the main store. In recent years, it has become one of the biggest areas of growth for the company, and these stores now outnumber Nordstrom’s full-price locations.
In its most recent quarter, same-store sales at Nordstrom Rack cooled slightly, up by 0.4% versus a 3.7% increase the previous quarter. However, the trend for the past three years has been that these stores are outgrowing their full-price sister 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 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 jewelry hung from racks, and more expensive pieces were locked in a cabinet.
All beauty products were self-service.
However, the brands were high-end.
While the premise is the same as TJ Maxx, it felt like a more upscale version.
These Tumi suitcases were nearly $400.
The store was mostly split out by individual brands, 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, which are less likely to be found in a TJ Maxx store.
However, there was definitely some cross-over between the brands that were stocked in both stores.