Is Tuesday Morning Mourning Internet Sales?
The other day a brief item on retailing crossed my desk. What caught my attention was the note that a major retailer had decided to cease e-commerce operations and had already quietly dropped the shopping cart from its website. The retailer in question was of course, Tuesday Morning.
In this day and age, the news that any retailer would actually dismiss any opportunity to sell through the web comes as an immediate surprise. These days there are seemingly more and more headlines about how Amazon has all the advantages over brick and mortars and how the larger chains are fighting back. At this point, the term showrooming generally comes up with a story about Target’s frustrations as it sees customers reading competitor’s prices on their mobile devices while walking Target’s aisles. There are currently many stories on how Walmart is seeking efficiencies in delivering items bought from its website both in terms of turnaround times and cost to the consumer.
A significant part of Best Buy’s problems last year came from its lack of ability to compete, not only with Amazon, but also with those of strong regional and independent brick and mortar websites. A considerable part of Best Buy’s problems were also coming from its inconsistencies with its stores matching prices with its own website. With all of these increasing concerns over the quality and value of websites when it comes to competing in retail, why would a company with an established site abandon the shopping cart?
Before reading on I quickly wondered if it had to do with Tuesday Morning’s merchandising platform. Tuesday Morning sells home furnishings mostly through the purchase of closeouts and odd-lots. Retailers featuring this type of merchandising often offer limited supplies of a particular product. These limitations can work to the retailer’s advantage as regular customers become aware that prices should be attractive and thus a well-priced item is likely not to remain on the shelves for very long. Thus knowledgeable customers must adopt the policy of buy now or assume the item will not be available later.
This policy also often creates the atmosphere of a treasure hunt. This is where, as stock on most items is limited and likely to be gone at any time, replacements must be found to keep the shelves full. This is interpreted by many customers as a need to visit a store regularly so as not to essentially miss out on the unknown. On reading the article announcing Tuesday Morning’s dismissal of direct sales on its website, I wondered if the reason for this sea change had to do with the limited quantities the retailer normally purchases and how Internet sales affect store stocking issues.
It turns out that was Tuesday Morning’s basic claim. In fact, many other brick and mortar retailers which merchandise stores based on odd-lot and closeout purchases do not offer websites from which consumers can purchase items directly through a shopping cart and a credit card. Big Lots, TJ Maxx and Ross stores are prime examples here but are not nearly unique. While the latter two primarily sell apparel, they do offer significant sections of home décor which if anything are growing in size and popularity.
That said a number of professionals have questioned Tuesday Morning’s latest merchandising tactic, wondering if the company just couldn’t manage the proper effort needed to compete for the Internet dollar at a time when most retailers are aggressively seeking greater rewards from Internet revenues. For its part, Tuesday Morning claims the move will allow it to focus on its stores and their treasure hunt advantages. The retailer also notes that Internet sales were just 1% of annual sales.
Thus I decided to visit a local Tuesday Morning store. I thought I had seen one recently in passing and decide to check on the exact location with a knowledgeable colleague. She informed me that the nearest location is considerably further than I had thought. We then checked the Chain Store Guide locations database and discovered that I had been correct. My colleague was stunned as she often shops nearby, lives in the community and is an avid reader of the neighborhood press and was unaware of there being a Tuesday Morning in a large, oval-shaped strip mall. I thought the location to be fairly new, which if true surprised her as she thought she would have heard of its opening.
In fact, I was told on my visit that the store had opened late last year. My aforementioned colleague was not the only person in my office not to know of this location. That these are bright professionals who have a greater awareness of retailing than most people raises questions as to the effectiveness Tuesday Morning employs in its most basic of promotions-new store openings.
If Tuesday Morning management is sincere and is at least in part dropping e-commerce to focus on improving the performance of its brick and mortar operations, there is no time to waste, at least by my observations. First of course is the pervasive lack of knowledge that a location exists relatively near the office of a bright crew which delights in most aspects of retailing, including shopping.
Even walking nearby, the store is easy to miss, save the signage above the entrance. The store engenders invisibility in part because it runs narrow and deep. Thus it has the typical floor space a customer might expect but relatively little in the way of windows which might feature products, displays, signage or inviting promotions from a national chain..
The window space that is available is treated almost like the back wall of a store. It displays four low racks each with a clearance sign offering pieces of décor at fifty percent off. Normally retailers offer clearance areas away from the front of their stores. After all, clearance typically conveys goods that were unable to sell at their initial prices and so are marked down. Essentially this is part of the treasure hunt concept and is likely better kept in an area which invites customers to walk much of the floor. Again, the art of the treasure hunt is a part of Tuesday Morning’s rational for abandoning direct sales on the Internet.
Once inside I felt the location almost had the feel of a warehouse, not in terms of size but more in a sense of style or lack thereof. When I visit homes which are maintained by people with an interest in style, it shows through the décor and its inviting arrangement. This Tuesday Morning location does not offer any such sense of temptation. Many selections seemed cluttered and overly populated. Others indicated no particular order at all. Prices can be a bit hard to find. The overall lighting seemed drab and as uninviting as the arrangements of product groupings. It seems to me that a store offering home décor should be as inviting as the homes they expect to fill.
Perhaps here the expectation of low prices negates the expectation of an inviting interior design. Many stores featuring extremely low priced goods exude in a distressed look. I do not believe however, that that is what a chain that once featured Lauren Bacall as a spokesperson is looking for. Then, from the sampling I saw, I am not at all sure that many current prices are a particularly great draw.
As to abandoning direct web sales, published newspaper reports revealed that a number of loyal online customers have responded to the move with disappointment and displeasure. It seems that due to demanding work and personal schedules, they enjoyed taking advantage of this retailer’s offered opportunities through the time saving comfort that online shopping affords. They mentioned having ordered big ticket items, which any closeout retailer would hate to lose.
As of now a visit to the Tuesday Morning website leads with a prominent note titled, here’s the deal (all lower case). The piece goes on to explain that due to the nature of the company’s closeout business, Tuesday Morning will no longer be selling merchandise online. It goes on to discuss the company’s increased focus on in-store assortments and the concept of the treasure hunt.
In addition to questions regarding the retailer’s Internet and brick and mortar savvy, Tuesday Morning has recently been plagued by crises concerning its front office operations as well as its financial performance. Just over a year ago the company fired CEO Kathleen Mason, due to criticism that the company was performing poorly under her direction.
In March 2013, the company named former Michaels Stores CEO, Michael Rouleau as the company’s interim CEO. In May of this year Mason sued Tuesday Morning for discrimination, claiming her termination occurred as a result of her breast cancer diagnosis.
Just after the announcement of the company dropping e-commerce, the interim part of the CEO title was dropped. Rouleau will also continue to serve on the company’s board of directors, which he joined November 2012. Predictably Rouleau sees the departure from e-commerce as a wonderful opportunity to focus on traditional store operations. From this vantage point, that effort is much needed with or without the burden of an Internet shopping cart.
To many the move to drop direct sales from any website is a bold if not a dangerous move. Web sales are expected to continue growing annually, incrementally. With the explosion of mobile devices expected to continue for some time, it is likely that active internet sites will only gain in importance. With the corporate management chain finally in place, company executives can concentrate on building for the future. It looks like Tuesday Morning’s shareholders and shoppers are in for an interesting ride.