Facts:
1. The average item is only $10, and 98% of the stuff in its store is under $30.
2. No e-commerce, no digital shop
Arguments:
3. Opportunistic purchase
4. fashion and markdown risks
5. reacting to what customers want
6. the high costs of online shipping and frequent return rates
7. an off-pricer
Ross, which doesn't have a digital shop, relies on a flexible purchasing strategy to offer top brands at bargain prices, enticing shoppers to head to stores to find clothes they can't buy online.
1. The average item is only $10, and 98% of the stuff in its store is under $30.
2. No e-commerce, no digital shop
Arguments:
3. Opportunistic purchase
4. fashion and markdown risks
5. reacting to what customers want
6. the high costs of online shipping and frequent return rates
7. an off-pricer
Ross, which doesn't have a digital shop, relies on a flexible purchasing strategy to offer top brands at bargain prices, enticing shoppers to head to stores to find clothes they can't buy online.
The average item is only $10, and 98% of the stuff in its store is under $30.
"The place that Ross and TJX occupy is a place that's tough to do online," said Simeon Siegel, a retail analyst at Nomura Group. "I believe Ross is winning because it doesn't have e-commerce, not in spite of it."
Ross calls them "opportunistic purchases." It can either quickly ship the product to shelves to meet in-season looks or pack the products away in warehouses to sell later. Both methods help the company constantly rotate through a wide assortment of styles and fashions.
"They can be more nimble reacting to what customers want," said Moody's senior retail analyst Christina Boni. The business model "reduces fashion and markdown risks that other apparel retailers face."
Despite a healthy economy and a recovery in many Americans' discretionary income since the 2008 recession, widening inequality has created a base of Ross' low and middle-income core shoppers, said John Mercer, a senior analyst at Coresight.
Ross calls them "opportunistic purchases." It can either quickly ship the product to shelves to meet in-season looks or pack the products away in warehouses to sell later. Both methods help the company constantly rotate through a wide assortment of styles and fashions.
"They can be more nimble reacting to what customers want," said Moody's senior retail analyst Christina Boni. The business model "reduces fashion and markdown risks that other apparel retailers face."
Despite a healthy economy and a recovery in many Americans' discretionary income since the 2008 recession, widening inequality has created a base of Ross' low and middle-income core shoppers, said John Mercer, a senior analyst at Coresight.
Ross has argued that the high costs of online shipping and frequent return rates mean it doesn't make sense for Amazon to attack heavy-discount apparel sellers.
"The economics just don't work," Ross' president and chief operating officer, Michael O'Sullivan, told Goldman Sachs analysts last year. "If I was Amazon, I don't think I'd be looking at the off-price space as my big opportunity."
Amazon may have reached a similar conclusion. Analysts see the company operating in clothing as more of a traditional department store rather than an off-pricer.
"Amazon looks to be shifting its focus away from cut-price, third-party-branded offerings with the launch of many more private labels and stronger relationships with brands," Coresight's Mercer said.
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