TJ Maxx Gets Attention Selling Cheap iPads

Discussion
Nov 23, 2010

By George Anderson

Apparently, TJ Maxx doesn’t have that many cheap iPads to
sell, but the attention the chain has generated by selling the 16 GB WiFi versions
for $399 ($100 below regular retail) is probably worth any money the discounter
has lost buying the units.

Last week, Engadget posted a story with photos
showing a TJ Maxx in Vernon, NY selling iPads on the cheap. Calls made by the
site found units on sale in stores in New Jersey and Ohio.

The move, according
to TJX spokesperson Sherry Lang, was in keeping with the chain’s standard
operating practice.

"As an off-price retailer, our business provides an ever-changing selection
of great finds of famous maker apparel and non-apparel categories at excellent
values. In other words, our mission is to offer a treasure hunt of great values,
every day," Ms. Lang said in an email statement to CNBC.

Apple’s
only statement on TJ Maxx’s sales of iPads was that it was not an authorized
reseller of its products.

Ms. Lang said the iPads "were sourced from a retailer" and
quantities were "very limited."

Andrew Murphy, an analyst at Piper
Jaffray, told CNBC that TJ Maxx had
sold about 80 iPads at a loss.

Discussion Questions: What do you think of TJ Maxx’s sale of $399 iPads?
Do you expect others to follow its "unauthorized" lead?

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11 Comments on "TJ Maxx Gets Attention Selling Cheap iPads"


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Bob Phibbs
Guest
10 years 5 months ago

Some consumer groups might call this bait and switch.

Max Goldberg
Guest
10 years 5 months ago

This is a classic example of a promotion going viral, only to disappoint far more people than it satisfied. Did it draw more people into TJ Maxx stores? Yes. I was one of them. Did almost all of us leave disappointed and frustrated? Yes.

The customer service manager of my local store was not aware of the promotion, insisting that TJ Maxx never sold iPads. Finally another employee told her that he read something about it online and that it only applied to one store in NYC. I left without looking at any other merchandise.

Will I return to TJ Maxx anytime in the near future? No.

David Biernbaum
Guest
10 years 5 months ago

I’m not a fan of this type of promotion. I think it’s wrong on all levels.

Carol Spieckerman
Guest
10 years 5 months ago

In retail, “treasure hunt” might as well be a euphemism for “busted!” Being called out for gray-market gaffs is practically a rite of passage for opportunistic retailers (just ask Sam’s, Costco and Ross Stores). TJ Maxx is setting a new standard though by using iPads as a loss leader (not for the faint of heart)!

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
10 years 5 months ago

A limited quantity means unhappy customers. It would have been far better for TJ Maxx to offer the iPads at full retail giving their customers a chance to obtain an iPad if their local Apple store was sold out. Selling far below retail to build store traffic when you only have a few in stock (if any at some locations) is never a good idea. A disappointed customer is hard to win back.

Ed Rosenbaum
Guest
10 years 5 months ago

Ahh, the pleasure of getting free advertising, viral in this case, vs. the pain of disappointed customers walking out angry and without any purchases. Seems like a good idea going sour quickly. Let’s wait to hear how TJ Maxx will put a spin on this.

Kai Clarke
Guest
10 years 5 months ago

Loss leaders have been a part of retail for years. Limited availability and selection is a part of retail, especially as a loss leader. This is just smart marketing and PR by TJ Maxx. Very smart….

Craig Sundstrom
Guest
10 years 5 months ago

Let’s review: it sold 80 units, at a loss, and “generated attention” from an obscure web-site…tell me again why this is even a story?

Anne Bieler
Guest
Anne Bieler
10 years 5 months ago

Will be interesting to see how this plays out. Fundamentally the premise and promise of “cheap” iPads as a door buster is short term attention getter. Most retailers work on the premise that the store experience, i.e. what keeps customers coming back. Disappointed shoppers spread the word, and it travels fast. Long term impact is unknown in today’s retail landscape, and deep discount shoppers are a pretty resilient bunch, but difficult to see how this would be considered a good strategy in the competitive climate of 2010.

Tim Henderson
Guest
Tim Henderson
10 years 5 months ago

Savvy marketing move by TJMaxx. As the retailer noted, it’s in line with the off-price brand’s thrill-of-the-find, get-it-before-it’s-gone shopping experience. As for whether techies seeking cheap iPads leave disappointed, I think TJMaxx will weather that just fine – they’re not the core TJMaxx shopper anyway. It’s similar to shoppers who leave other stores disappointed because they missed out on a great Black Friday deal. That disappointment should be temporary and tempered the clear knowledge that Black Friday deals are only for a limited time and on limited quantities.

It remains to be seen whether other merchants will opt to take the same “unauthorized” path. That said, we’ll definitely continue to see creative marketing as brands try to ensure their messages break through the season’s marketing clutter so they can capture holiday dollars in a difficult economy.

Odonna Mathews
Guest
Odonna Mathews
10 years 5 months ago

Loss leaders or bait and switch products don’t satisfy consumers and can result in lost sales.

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