HomeGoods stops selling online to focus on brick and mortar stores

In an unusual move for a major retailer in 2023, HomeGoods last week stopped selling online to focus exclusively on its traditional business.

“We’ve made the decision to focus our resources on our more than 900 brick-and-mortar stores across the United States, where we invite our passionate HomeGoods.com customers to continue shopping for home fashion and décor,” the company said in a statement.

The off-price furniture and home retailer launched its online store just two years ago, with top executives expressing excitement at being able to offer customers more ways to shop.

“We are thrilled to bring a second way for our passionate shoppers to discover and shop an assortment they know and love,” company president John Ricciuti said at the time.

But the online store failed to gain traction with consumers.

“Our HomeGoods e-commerce site, homegoods.com, represented less than 1% of HomeGoods net sales for fiscal 2023 and fiscal 2022, and did not have a significant impact on year-over-year segment margin comparisons,” the company said in a Form 10-K it filed with the SEC in March.

Marcel Hollerbach, chief innovation officer and co-founder of e-commerce platform Productsup, told Retail Brew that “in an effort to save resources and consolidate efforts, many retailers are prioritizing their top performing channels,” but he added that the most successful brands are those that are able to pull off a more balanced omnichannel approach.

It’s worth noting that HomeGoods’s off-price competitors Ross and Burlington Stores also lack e-commerce sites. Burlington, for example, shut down its digital store in March 2020. CEO Michael O’Sullivan told investors at the time that there were “very significant constraints on recreating the off-price Treasure Hunt in an online environment.”

In other words, the joys of bargain hunting at the discount chain were lost on online shoppers.

While online sales had yet to make up a meaningful portion of revenue at HomeGoods, it’s unclear if the decision to close up shop online will hurt its competitive position long-term.

In the SEC filing, HomeGoods parent TJX Companies identified the expansion of e-commerce as a risk factor for its brick and mortar-based retailers.

“More generally, consumer e-commerce spending may continue to increase, as it has in recent years, while our business is primarily in brick and mortar stores,” it said. “If we fail to compete effectively, our sales and results of operations could be adversely affected.”