T.J. Maxx PromShop

DANIELLE BLAKE

PROFESSOR DON LEVY SENIOR CAPSTONE FASM 430

1

TAB LE CONT INTRODUCTION 5

MARKETING 9

SWOT 14

PROJECTOVERVIEW 16

E OF ENTS CUSTOMERBASE 29

INSPIRATION 35

FINANCIALS 43

CONCLUSIONS 55

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EXECUTIVE SUMMARY

For the senior capstone, I will execute a mobile pop-up shop for the off-price retailer T.J. Maxx and their subcategory The Runway. A pop-up shop would enable The Runway to provide customers with a new approach to the typical shopping experience. The pop-up shop will also create an opportunity to reach out to current and potential Gen Z customers. By focusing on the customer’s experience, my goal is to intertwine the TJX brand into the Gen Z life.

To set this pop-up shop apart from ones of the past, there will be a focus on The Runway evening attire, prom season and mobility. This idea stemmed from the need to boost the offerings, sales and profits of The Runway.

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BRIEF HISTORY

T.J. Maxx was founded in 1976 by Bernard Cammarata.

Soon after opening the discount store under the name Zayre, it was sold to Ames and renamed TJX Companies, Incorporated.

Fast forward to 2010, T.J. Maxx opened its first “The Runway� section in its stores. T.J. Maxx currently has 1,223 stores in the United States and 80 stores offer The Runway selection.

In 2017, the company was able to surpass their sales goal and boast $35 billion in sales and open its 4,00th international store. The brand has seen an 8% net sales increase for the 2018 fiscal year. The increase comes from customer traffic and exceptional values amidst outstanding branded merchandise.

With only one annual store sales decline in the last 41 years, TJX has managed to become one of the only major international off-price apparel and home retailer.

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MISSION

“To deliver great value to customers through the combination of fashion, brand, quality and price everyday.”

NET SALES

2018 2017 2016 2015 2014

$35,865 $33,184 $30,945 $29,078 $27,423 *dollars in millions

PRODUCT CATEGORIES

2018 2017 2016

52%

15%

33%

54%

15%

31%

55%

15%

30%

Home Fashions Jewelry and Accessories Clothing Including Footwear

COMPANY PROFILE

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PERCEPTUAL MAP For the current positioning, The Runway was compared to indirect and direct retailers that sell a similar product assortment. The main competitors consist of Neiman Marcus, Nordstrom, Jovani and Sherri Hill. These competitors were determined by what the retail space consists of and product offering.

Low Quality

Low Price High Price

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High Quality

Indirect Competition

First opened in 1924, Saks Fifth was the “brainchild” of Horace Saks and Bernard Gimbel. With the need to have a retail space dedicated to fashionable, gracious living Sak was the only retailer located in a primarily residential district. Setting themselves apart by offering high-end men and women’s fashions as well as exceptional customer service, Saks Fifth Avenue prides itself on their taste and elegance.

Strength- An extensive amount of merchandise for all departments. With only 39 stores in the US, they are able to take advantage of their niche market. Has the backing of a large holding company, Proffitt’s Inc.

Founded in 1907 in Dallas Texas, Neiman Marcus was founded by Herbert Marcus, Carrie Marcus Neiman, and Al Neiman. They hold the standard of being a premier luxury retailer recognized for merchandise leadership and superior customer service. The customers that shop within the franchise is wealthy high-class individuals with an advanced degree.

They are also well traveled and sophisticated individuals.

Strength- First to offer loyalty programs to customers as well as offering the official gift wrapping service in store during the holidays.

Offers a wide selection of high end and luxury apparel, shoes, accessories, jewelry, cosmetics, etc.

Founded in 1901 by John W. Nordstrom, it was started as a shoe store with his partner Carl F. Wallin. The business was sold off to John W. Nordstrom’s sons and then further passed down to their sons. They boast their commitment to providing customers with the best possible service to improve their daily life. “Fashion changes. Shopping changes.

Our commitment to happy customers does not.�

Strength- The ability to send unsold merchandise to other locations. The longevity of being in business for over a hundred years. Offers an array of products from similar designers at a more exclusive price.

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Direct Competition

Founded in 2008 by Sherri Hill with the mission to empower and enhance women in fashion-forward styling and wearability.

Spending the early part of her design career making gowns for Miss USA, Miss Universe, and Miss America contestants, Sherri was able to set herself apart from most evening gown designers.

Strength- The brand has a network of over 1,00 stores that sell their gowns. Their headquarters is currently located in downtown Austin, Texas which is three hours away from the Irving stop on the “T.J. Maxx PromShop�.

Founded by Jacob Maslavi in 1980 and soon carried on by sons Saul and Abraham. They have expanded the brand to fit into every special occasion a woman could attend. The brand is able to manufacturer, wholesale and produces its own designs.

Strength- Prides itself on not being a one-time shopping experience and being able to follow through every major life experience. Available in more than 2,000 stores worldwide. Offers affordable pricing with its JVN and Maslavi lines.

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PAST MARKETING

When it comes to marketing there is more of a focus on the store as a whole versus solely The Runway. The events set to promote The Runway focuses on small instore participation. They are typically quick fashion-oriented events.

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DIGITAL

With the continuation of sales increase over the last four decades, T.J.Maxx has placed its marketing efforts into brick and mortar locations.

“With the vast majority of overall retail sales occurring in brick and mortar locations and online retailers of all sizes starting to open a physical store, we’re convinced that our four decades of experience operating stores and responding to consumer trends is a tremendous advantage.� -CEO Ernie Herrman.

This approach works well for attracting the Generation Z market primarily because research has shown that this demographic values experience and the business model of treasure hunt bargain shopping fits well into adventurous experiences.

DIRECT There is the opportunity for customers to sign up to receive emails of current promotions and new arrivals of merchandise. Although this is the only form of direct marketing that T.J. Maxx uses to interact with new and current customers, it is effective to drive the customer into stores.

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Instagram

PINTEREST

Twitter

1,821 posts 1.1m followers 3705 following customer driven/ lifestyle

7.5m monthly viewers 83k following Infrequent social media posting.

23.7k tweets 11k following 376k followers 17k likes 1 lists

SOCIAL

YouTube

Facebook

10,946 subscribers 10 videos 33,787,773 views

3,186,468 likes 17,188 visits 3,082,783 people follow

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S

The T.J.Maxx brand has a hard focus on their target customer and those customers come to the brand for the selection and price.

The main shoppers for the event are the customers who know the brand and are familiar with The Runway product assortment line.

Being able to not have a stationary brick and mortar location for an event that is niche as prom makes the event accessible to a wide target market.

Offering a minimal product assortment creates a need to buy now need for customers.

The brands large buying power will expand the quality of merchandise available and offer a variety of shoppable brands.

W

The main weakness of the “T.J. Maxx PromShop� is the competition and the other specialty stores that cater to the customer base.

Getting high-end customers to spend their dollars at an off-price retailer will be a challenge.

With minimal product assortment, there is a possibility to lose customers to larger retailers.

Pop Up shops are an underdeveloped market and awareness of mobile pop-ups are still an anomaly to the mass market.

The selling space is not comparative to an

average brick and mortar location.

O

The scarcity of mobile pop-up shops is a large opportunity that the T.J.Maxx brand could pioneer.

There’s the opportunity to expand the pop-up shop to offer different assortment.

Generation Z love to share their experiences, the pop-up is a way to create a unique shopping experience that the consumer will share with others which in turn increase profitability.

The shopping experience will be unlike the brick and mortar locations, it will be very minimal and more of a high-end boutique aesthetic.

T

The competition that would come with entering the prom/evening wear sector is a considerable threat to “T.J. Maxx PromShop”.

The newness of The Runway product assortment is the main threat that the “T.J. Maxx PromShop” will face.

The unknown possibilities of missing deadlines based on the trucks reliability.

Not reaching break even point within the first

year of implementation.

The product assortment will be a bit trend driven to appeal to the ever-changing consumer taste.

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PROJECT OVERVIEW

For this capstone, I chose to launch a pop-up shop for the off-price retailer T.J. Maxx. This pop-up shop correlates directly with the TJMaxx Runway Collection. The goal for the “T.J. Maxx PromShop� is to reach the Generation Z consumer and be pioneers for off-price retailing pop-up shops. With this, I am expanding my knowledge with consumer outreach and brand awareness.

ABSTRACT

Through evaluation of the current state of the market the decision to create a pop-up shop for an off-price retailer seemed to be the next viable step in a thriving retail environment. The proposed “T.J. Maxx PromShop� capitalizes on the tradition of prom season and its ability to connect consumers on the common goal of being a showstopper for one night only.

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DESCRIPTION The call to action is meant to drive the new generation into T.J. Maxx and make strives to gain an edge on other retailers. When taking such a large offprice retailer and having the product and message on the road, it becomes a pioneer in the department style retail space.

Prom season is the focal point of this mobile popup shop, it will tie together the use of evening attire from The Runway and the mobility of using a truck to reach the target consumers.

During this event, there will be an opportunity for a participant from each state to win a full glam experience.

This would include their choice of evening wear with accessories, hair, and makeup. The competition will require participants to upload a video on why they are a Maxxinista.

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BUSINESS MODEL

The TJX Companies Inc is the leading off-price apparel and home fashions retailer in the United States and worldwide. Our flexible off-price business model, including our opportunistic buying, inventory management, logistics and flexible store layouts, is designed to deliver our customers a compelling value proposition of fashionable, quality, brand name and designer merchandise at excellent values everyday. Our opportunistic buying strategies and flexible business model differentiate us from traditional retailers. We offer a treasure hunt shopping experience and rapid turn of inventories relative to traditional retailers. (TJX)

“T.J. Maxx PromShop” will stick to the T.J.Maxx business model to assure it fits within the brand. The product will be just for the Gen Z consumers while being relevant to their needs and wants. The range will consist of curated high-end fashion brands evening wear, accessories that fit with the brand including both men and women’s attire. For the “T.J. Maxx PromShop” we will stock more than 4,ooo products, dividing the assortment based on the region in which we travel to. The product assortment will be diverse to be able to deliver “extraordinary value on amazing brands.”

GROWTH PLAN Expansion of our business through the addition of new stores continues to be an important part of our global growth strategy. The fiscal 2017 year we had 1,186 stores at an average of 28,000 square feet and 1,223 stores at the end of the fiscal 2018 year. We estimate by the end of the fiscal 2019 year we will have 1,260 stores, that is a potential long-term store growth of 37 new stores. (TJX) The “T.J. Maxx PromShop� has the potential to increase brand exposure, which will drive up stores that carry The Runway selection. There is also the potential to start opening retail space dedicated to The Runway.

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Failure to execute our opportunistic buying strategy and inventory management could adversely affect our results. We depend upon strong cash flows from our operations to supply capital to fund our operations, growth, stock repurchases and dividends and interest and debt repayment. Failure to protect our inventory or other assets from loss and theft may impact out financial results. Our real estate leases generally obligate us for long periods, which subject us to financial risks. As our business is subject to seasonal influences, a decrease in sales or margins, a severe disruption or other significant event that impacts our business during the second half of the year could have a disproportionately adverse effect on our operating results.(TJX)

RISK FACTORS

Tax matters could adversely affect our results of operations and financial condition. Our results may be materially adversely affected by the outcomes of litigation, legal proceedings and other legal or regulatory matters. If we engage in mergers or acquisitions or investments in new businesses, or divest, close or consolidate any of our current businesses, our business will be subject to additional risk. Quality, safety or other issues with merchandise we sell could damage our reputation, sales and financial results. Adverse or unseasonable weather in the markets in which our stores operate or along our supply chain could adversely affect our operating results.

(TJX)

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VISION

The vision for the “T.J. Maxx PromShop� is to offer our loyal fashionistas a one-stop-shop for all their prom essentials. Our long term goal is to be apart of the most significant events for the next generations, so as they evolve we are the place they come for all their needs.

LOCATION

HOURS

MacArthur Park Shopping Center 7735 N. Macarthur Blvd.

Irving, TX 75063

March 21-24, 2018 Thursday-Sunday 9am-6pm 2525

OBJECTIVES

T.J. Maxx is an off-price luxury retailer that strives to cater to the treasure hunt shopper. This pop-up would take most of the hunt away and bring forth the treasure. Brand exposure is the biggest take away for this pop-up shop. This is a creative risk that will generate a large buzz and will be used to introduce new consumers, Generation Z’s, to the off-price luxury market. The exposure will drive new customers to a subcategory of the brand while sticking to its off price. Create a retail space that gives customers the opportunity to experience the retailer in a new environment.

The potential of expanding the event to a wider range of product assortment as well as making “T.J. Maxx PromShop” a yearly event. The success depends overall on the response from the target market. The largest long term goal is gaining a more extensive foothold on the Generation Z market. Increasing the overall brand awareness and offerings will contribute to the long term sales of The Runway section. “T.J. Maxx PromShop” like most events has the potential to not breakeven primarily because of the first round of cost.

SALES IMPACT

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CUST OMER BASE West California

South Texas

Northeast New York

Midwest Missouri

Dividing the country into four large sections will help with customizing the selection to the consumer’s needs and wants.

For this project the focus will be on the Southern region of the country, more specifically Irving Texas.

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Tustin,Ca Age 16 VALS Thinker Sophomore Enjoys cooking with her little sister, photography, martial arts, thrifting for vintage pieces Income 100k-140k Buying motivation- first time attending prom Artist Panic! At The Disco, Billie Eilish, Queen

LEE

92782 Tustin,Ca Median age 37.4 Population 15% of population is 10-19 Race

38% white, 36% asian, 19% hispanic, 5% two+, 1% black, 1% native Income

$106,125 median household income Education 94.6% high school or higher

51% married with children 15 and under

Irving,TX Age 17 Junior VALS Innovator Loves horseback riding, attending concerts and shopping with friends, going on family camping trips, has a pet pig named Hamlet Income 75k-125k Artist- Dua Lipa, Cardi B, Doja Cat, and Kehlani

BELLE

75063 Irving, Texas Population 232,013 Median age 33.6 Race 25% white

14% black

47% Asian

10% Hispanic Income

$85,165 median household income Education 97.4% high school grad or higher 53% married with kids 15 yrs or older

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Greenvale, New York Age 17 Senior VALS Experiencer Loves fashion trends, curating his instagram to follow his monthly mood, dreams of working at GQ Income 120k-200k Artist- J. Cole, Khalid, Anime, Bad Bunny

NEYMAR

11548 Greenvale, New York Population 2,987 Median age 42.5 54% are married with Kids 15& up Females- white 56%

Black 7%

Asian 23%

Hispanic 11%

Two+ 4% Income

$123,056 median household Education 96.1% high school grad or higher

Des Peres, Missouri Age 18 Income 90k-160k VALS Achiever Senior Practices yoga and meditation, health enthusiasts, enjoys reading romance novels in her free time, has a dog German Shepherd named Nova Artist-Lady Gaga and Bradley Cooper, Ariana Grande

EVA

63131 Des Peres, Missouri Population 17,458 Median Age 48.3 Race- White 90%

Black 2%

Asian 5%

Hispanic 2% Income

$144,159 median household Education 98.8% high school or higher

37% married with kids 15 & older

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The potential of expanding the event to a wider range of product assortment as well as making “T.J. Maxx PromShop” a yearly event. The success depends overall on the response from the target market. The largest long term goal is gaining a more extensive foothold on the Generation Z market. Increasing the overall brand awareness and offerings will contribute to the long term sales of The Runway section. “T.J. Maxx PromShop” like most events has the potential to not breakeven primarily because of the first round of cost.

I N S P I R A T I O N 35

AMBIANCE

Staying consistent with The Runway color palette, the “T.J. Maxx PromShop� would carry the purple hues accentuated by whites and blacks. The palette is merged with clean lines, wide windows to give a light twist to the traditional dress boutique atmosphere.

The tractor-trailer will be completely modified to transform it showcase the ambiance and mood of the event. It will be a 40ft long container, that will be easily hooked and unhooked. For extra storage, there will be a smaller truck that has additional product.

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LEARNING EXPECTATIONS

The key learning expectations for the “T.J. Maxx PromShop” lays within the popularity of the product assortment and how we choose to market the “T.J. Maxx PromShop” to our Generation Z consumers.

Another expectation is discovering how incorporating mobile pop-up shop will affect sales and perception of the T.J. Maxx The Runway brand as a whole.

COMPETITIVE ADVANTAGE

The pop-up retail space has become quite popular in the most recent years, although there is still a lot to learn about the true implications involved.

Off-price retailers don’t typically hold pop-up shop events and not one of this magnitude, with that in mind the “T.J. Maxx PromShop” would have a vast amount of competitive advantage over the market. The brand is able to become pioneers and early adopter in offering pop-up shop events that cater to a niche market.

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PROJECTIONS The prom season typically starts at the end of April and will continue the end of May. Teens tend to go out and look for evening wear anywhere between a month and three months before their dance. With that in mind the “T.J. Maxx PromShop� will make its way around the country starting in February. That will give ample time prior to the start of the season to get consumers excited.

FINANCIAL In the financial section, the product assortment is split into units, general expenses, and potential profit. The overall units are broken down for the event as a whole, spanning over the three month period.

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Classification Trumpet Mermaid Empire Waist Two Piece Tuxedo Jacket Tuxedo Pants Silk Button Downs Ball Gowns Column Tea Length Mini

% Total 6% 1% 5% 11% 14% 11% 7% 14% 14% 11% 6% 100%

$ Purchases $1,800) $300) $1,500) $3,300) $4,200) $3,300) $2,100) $4,200) $4,200) $3,300) $1,800) $30,000)

Unit Purchases 315 250 290 335 465 425 375 380 480 355 330 4000

Avg. Retail $567,000) $94,500) $472,500) $1,039,500) $1,323,000) $1,039,500) $661,500) $1,323,000) $1,323,000) $1,039,500) $567,000) $9,450,000)

Sizes 0 2 4 6 8 10 12 14

% Total 5% 9% 15% 18% 18% 15% 10% 10% 100%

$ Unit Purchases Purchases $1,500) 3 $2,700) 5.4 $4,500) 9 $5,400) 10.8 $5,400) 10.8 $4,500) 9 $3,000 6 $3,000 6 $30,000) 60

LOCATION FOOT TRAFFIC PER DAY PERCENTAGE OF CONVERSION TRAFFIC/FALL Footfall Conv. % Avg Basket*

100,00 x.005=500 use .05-.10 conv %

(MKUP 60%) PRODUCT Trumpet Mermaid Empire Waist Two Piece Tuxedo Jacket Tuxedo Pants Silk Button Down Ball Gowns Column Tea Length Mini TOTAL

% 6% 1% 5% 11% 14% 11% 7% 14% 14% 11% 6% 100%

Sales volume COGS

SALES FORECAST

Day 1 Day 2 Day 3 Day 4 ( 70,000) ( 90,000) ( 100,000) ( 70,000) 0.005 0.008 0.005 0.005 Day 1 Day 2 Day 3 Day 4 4 Day Total 350 720 500 350 1920 0.05 0.05 0.07 0.07 $500.00 $500.00 $500.00 $500.00 TOT.REV TOT.REV TOT.REV TOT.REV $8,750.00 $18,000.00 $17,500.00 $12,250.00 $56,500.00 $3,500.00 $7,200.00 $7,000.00 $4,900.00 $22,600.00 Day 1 Day 2 Day 3 Day 4 $525.00 $1,080.00 $1,050.00 $735.00 $87.50 $180.00 $175.00 $122.50 $437.50 $900.00 $875.00 $612.50 $962.50 $1,980.00 $1,925.00 $1,347.50 $1,225.00 $2,520.00 $2,450.00 $1,715.00 $962.50 $1,980.00 $1,925.00 $1,347.50 $612.50 $1,260.00 $1,225.00 $857.50 $1,225.00 $2,520.00 $2,450.00 $1,715.00 $1,225.00 $2,520.00 $2,450.00 $1,715.00 $962.50 $1,980.00 $1,925.00 $1,347.50 $525.00 $1,080.00 $1,050.00 $735.00 $8,750.00 $18,000.00 $17,500.00 $12,250.00

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SALES/REVENUE RETURNS % NET SALES COST OF GOODS GROSS MARGIN INITIAL MARGIN SELLING EXPENSE SELLING PROFIT

($ ($ ($ ($ ($ ($

450,000) 10% 449,999.90) 30,000) 420,000) 93% 358,712) 61,288)

P&L EXPENSES 18 Wheeler Gas

COST $260,000 $920

Driver

$20,000

Merchandise

$30,000

Liability Insurance

$10,000

Employees

$25,000

Permits

$2,000

Maintence

$792

Marketing

$10,000

Total Expenses

$358,712

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STAFF SALES ASSOCIATE A SALES ASSOCIATE B SALES ASSOCIATE C MANAGER A MANAGER B

March 21

March 22

March 23

March 24

The “T.J. Maxx PromShop� is a time sensitive event, with that in mind the sales associates and managers will split the nine-hour day. During peak hours, typically midday, there will be three sales representatives on the sales floor to help alleviate the stress of high foot traffic. Each associate and manager will be fully trained in handling high-end merchandise and evening attire.

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MARKETING

For marketing the “T.J. Maxx PromShop�, I will continue to use the same platforms previously established by T.J.Maxx, which include Facebook, Instagram, Twitter, and YouTube. These marketing materials will be sent out two weeks before the first event. The launch will beginning Instagram materials during the first half of the two weeks, and then lead the second half of the week with a Facebook blast. The only exception to the overall marketing strategy is the addition of subway marketing for the New York location. The other three locations will have billboards as their forms of outdoor marketing.

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CONCLUSION

In closing, the success of the “T.J. Maxx PromShop� will contribute to the expansion of The Runway store and online product assortment.

There is room for expansion by adding more states to the pop-up destination list. With the industry being customer-centric driven this pop-up will standout among other contenders. While making a profit would be an added benefit, the goal was to breakeven and accumulate a strong customer base in the Generation Z market.

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REFERENCES https://www.jovani.com/jovani-about-us https://www.sherrihill.com/the-brand/ https://www.thebalancesmb.com/neiman-marcus-group-facts-2892139 https://shop.nordstrom.com/content/about-us?cm_sp=Left+Navigation-_-About+Us&origin=leftnav https://craft.co/nordstrom/competitors https://www.facebook.com/TJMaxx https://twitter.com/tjmaxx https://www.pinterest.com/tjmaxx/ https://www.instagram.com/tjmaxx/ https://www.youtube.com/tjmaxx https://digiday.com/retail/tj-maxx-focusing-growth-plans-physical-stores/ https://www.retaildive.com/ex/mobilecommercedaily/t-j-maxx-relies-on-targeted-mobile-ads-to-drive-in-storesales https://digitalmarketingdawgs.com/2018/02/19/t-j-maxx-and-their-online-presence/ https://money.cnn.com/2018/07/30/news/companies/ross-stores-tj-maxx-burlington-off-price-discount-retail/ index.html https://www.rgj.com/story/life/2018/04/26/photos-take-look-best-prom-america/555040002/ https://www.teenvogue.com/story/prom-survey-most-popular-style-us https://www.engadget.com/2017/11/23/tesla-semi-electric-truck-price/

https://www.truckinginfo.com/152861/how-to-improve-fuel-efficiency-on-the-road https://itstillruns.com/18wheel-tractortrailer-specifications-7272818.html https://www.popularmechanics.com/cars/trucks/g116/10-things-you-didnt-know-about-semi-trucks/ http://www.alltrucking.com/faq/per-mile-trucking-salary/ https://www.areavibes.com/tustin-ca/demographics/ https://censusreporter.org/profiles/86000US92782-92782/ https://www.thetruckersreport.com/facts-about-trucks/ https://censusreporter.org/profiles/86000US11548-11548/ https://www.areavibes.com/greenvale-ny/demographics/ https://www.areavibes.com/st.+louis-mo/demographics/ https://tjmaxx.tjx.com/store/jump/topic/social-responsibility/6800031p https://censusreporter.org/profiles/86000US63131-63131/ https://www.areavibes.com/irving-tx/demographics/ https://censusreporter.org/profiles/86000US75063-75063/ https://www.cityofirving.org/391/Traffic-Count-Summaries http://www.tjx.com/responsibility/reporting/ http://www.tjx.com/responsibility/index

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B