by

Department Store Industry

1: INDUSTRY OVERVIEW: DEPARTMENT STORES

Department stores are large retail outlets that contain numerous individual shops, providing a wide range of product lines. Department stores most oftentimes consist of the following product categories:

1)      Food

2)      Cosmetics

3)      Shoes and Accessories

4)      Clothing

5)      Interior Décor

6)      Restaurants

Depending on the type of department store, department stores can offer a much wider range of products, including furniture, toys, electronics, books, etc.

Department stores come in a wide range of qualities and prices. There are such things as “high-end department stores”, which would focus purely on offering high-profile brands and products, while there are more mass-market targeting department stores, which are more likely to include a wider range of products, including practical household products.

That said, department stores will oftentimes try to cater to specific types of market segments. Particularly in the case of department stores in large cities, each department store will try to position itself differently from its direct and nearby competitors: some will try to cater to younger generations, while some will try to cater to the older generations. Some will try to cater to those interested in mainstream brands, while others will focus more on boutique, independent brands.

In the US, the department store industry includes approximately 20 companies operating roughly 3,500 stores. Major department stores in the US include: Sears, JCPenney, Macy’s, and Dillard’s. The industry earns an annual revenue of around $60 billion USD, 95% of which is earned by the largest 8 companies in the industry.

Some links about the industry:

http://en.wikipedia.org/wiki/Department_store

http://vspages.com/mall-vs-department-store-5580/

http://en.wikipedia.org/wiki/Shopping_mall

http://www.hoovers.com/industry/department-stores/1529-1.html

 

SPACE

2a: Implicit or Explicit?

From the department store owner’s standpoint, I would say that space is often sold explicitly, as they would charge the tenants per the size of the lease space. On the other hand, for stalls or booths set up in more open areas of the department store, space may be considered more implicit, as these spaces may be sold with less correlation to the exact size of the space.

2b: Ways of Splitting Space

Department stores have different types of spaces within the building that cater to their customers. The most typical type is the space split by fixed walls into one unit, and can usually be shut off or closed by a door or a shutter. These spaces cannot easily be adjusted in terms of size and layout without investment of significant time and money. These fixed spaces are generally leased out to a specific brand or company, such as Zara, Coach, Burberry, etc.

 

Then there is the semi-fixed space, such as the department store areas dedicated to selling cosmetics or shoes. These are oftentimes open areas in which a specific brand or merchandising line take up certain spaces, but are not divided up by physical walls or entryways. These areas are much more flexible in terms of changing the products being handled, given that one area can easily be changed to carry one brand/line from another; however, certain fixtures used for the displays will be fixed, and hence less flexible to change from a layout perspective.

 

There is also open space, in which temporary booths or stalls are built to sell a smaller line of products or services.

Different from other uses of store space is the use of space to purely focus on selling experiential services. For department stores, the focus generally remains on selling physical products. However, there are rare instances when space is allocated to selling services—one case being when department stores are attached to movie theaters.

 

 

 

 

 

 

 

 

 

 

 

 

2c: Creating Additional Revenue

One of the most standard ways for department stores to create additional revenue is by holding major seasonal sales. Because the product life cycle of clothes tends to be fairly short, many stores have inventory left over by the time they have to replace old products with new products. Having a highly publicized sale allows for these leftover products to be sold, be it at a lower price than its retail value.

One key to making people spend more money is to convince people to stay out shopping longer. A way to do this is to provide adequate opportunity for people to take a break from shopping and rest. Many department stores provide these venues by creating food courts—or in high-end places by providing patisseries or coffee shops at which people can recharge before going back to shop some more.

I also think one of the more creative ways in which department stores have used their space to create additional revenue is through creative use of its open space. Another approach department stores can use to bring people to their stores is to provide an additional incentive to go to that location. A common approach used to achieve this in the U.S. has been to create playgrounds in the open areas of the department stores. This service often incentivizes families to go to a department store, simply because it allows an opportunity for their children to play.

 One more approach commonly used in Japanese department stores to bring more people to the site is to host certain “festivals” or special events in their open space. For example, department stores would often host weekly “mini fairs” on either the ground floor or the top floor, in which one area of the department store would be devoted to hosting jewelry/clothes/food from brands and shops that usually were not represented at the department store. The content would be changed frequently, and the department store would often be able to bring new people into the store by publicizing new, limited-time genres of offerings at their store.

2d: Potential New Ways of Splitting Space

There are several different directions department stores could potentially go in terms of splitting space differently. One direction would be to use space to create more personalized services to customers. Many of the spaces in department stores are “public”, but allocating a portion of space at high-end stores to allow for “private” space may allow for varying experiences for customers. Customers would be charged a premium for making use of these private spaces.

Another potential use may be to make the spaces more flexible. Instead of sticking with a model that leans heavily toward having “fixed” spaces, changing to a model in which it would be much simpler, cheaper, and quicker to change tenants may be an attractive approach for department stores that are pursuing a more trendy, up-to-date feel.

3: TIME

3a: Implicit or Explicit?

Department stores generally sell time implicitly: this is because the product being sold generally isn’t associated with a particular time limit. For example, it is not like a massage, where you are buying 60 minutes worth of service. The transaction is associated with a physical product unattached to time.

3c: Selling Time Explicitly

Time is currently being sold explicitly at certain department stores, although these cases are generally not a reflection of its overall business model. For example, some department stores may include shops that offer time-explicit services. Some department stores have massage shops, which are time-based service sales.

 As another example, some department stores in Japan have small football fields on their rooftops, which people can rent out on an hourly basis.

(http://www.futaba-sp.com/omiya/2010/03/post-23.html)

 

 

Some department stores also include game centers for children—some of these entertainment options include machines that run for a set period of time per game.

 

 

 

Department stores will often have restaurants on one of their floors. These restaurants can often choose to set time limits to each group of customers (ex. 2hr limit) to be able to take in more customers during peak times.

(http://www.mitokeisei.co.jp/shop/10_skygarden/11keizan.html)

 

 

 

3d: Creative Things to do with Time

There are a couple things that could be done creatively with time—some of which may already be being done to varying lengths at department stores. One might be to offer some sort of benefit if a certain amount of time is spent within the department store. For example, if a customer was to receive certain benefits if they stayed for 5 hours at a department store on an off-peak day, this could incentivize customers to spend more money during their wait time, and this could also help to improve the image of the department store by maintaining more customers.

 

Another thing they might potentially consider doing is to include shops that provide rental services. Some shops may already do tuxedo/dress rentals, which would be time-based; they could potentially take this further by doing time-based rentals of other high-end luxury clothes and accessories.

4a/b: Physical and Non-Physical Rate Fences

Below are several examples of physical rate fences (owner-tenant relationships are more likely to be involved with physical rate fences than the tenant-customer relationships)

  • (Owner-tenant POV) Depending on the size of the space being rented, owners can choose to increase or decrease the rates
  • (Owner-tenant POV) Certain areas of a department store are likely to be more popular/convenient; hence an owner can charge more depending on the location of the space within the store (http://www.ehow.com/facts_6313023_average-retail-lease_.html)
  • (Tenant-customer POV) For services such as restaurants within the department store, tenants can set rates by charging differently between open areas and private rooms

In terms of non-physical rate fences, I would say that there are many opportunities to create rate fences, depending on the type of service/product the store sells. There are also several opportunities within the owner-tenant relationship:

  • (Owner-tenant POV) Depending on the lease period, the owner can set different rates to charge the tenant
  • (Owner-tenant POV) Depending on the credibility/attractiveness of the tenant, the owner can set different rates
  • (Tenant-customer POV) Depending on the quality of the product, functionality of the product, or time/length of the service, rates can be set differently. There is an enormously wide range of examples of this in department stores. A Gap outlet, for example, may sell a tank top for $10, while a Burberry outlet would sell a similar styled tank top for $150. Similarly, a cell phone with 3G functionality may sell at a cell phone provider outlet at a certain price, while a phone with 4G functionality would sell at a much higher price.

4c: Creative Ways to Set Rate Fences

Some ways I can think of setting rate fences creatively is to perhaps offer more intangible services—rather than just the physical products. For example, an I Love Bangkok t-shirt may only cost $5 at the actual retail shop, but if the customer already knows what he/she wants, but doesn’t want to make the trip up 7 floors and 5 minutes of walking to get there, the store could potentially charge an extra $1 to have the t-shirt brought down to the concierge desk of the department store for a quick pick-up.

36,574 thoughts on “Department Store Industry”

  2. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be subscribing to your feed and I hope you post again soon. Big thanks for the useful info. https://www.andarbaharonline.com/

  4. I wanted to thank you for this great read!! I definitely enjoying every little bit of it I have you bookmarked to check out new stuff you post. NFTs games

  5. Thanks for a very interesting blog. What else may I get that kind of info written in such a perfect approach? I’ve a undertaking that I am simply now operating on, and I have been at the look out for such info. Steel alterations manchester

  6. I admit, I have not been on this web page in a long time… however it was another joy to see It is such an important topic and ignored by so many, even professionals. I thank you to help making people more aware of possible issues. login indo4d

  7. You can sit back, relax and choose the best escorts for the most glamorous and elite services in Lahore. It is easy to see that you will find many profiles of girls online while browsing our website. No wonder we also have the largest selection of beautiful girls in Lahore. All you have to do is decide what kind of girl you want. So, the choice is yours, and it will provide you with the booking rates.
    https://pakistangirls.news.blog/

  9. The law assignment support system at our law assignment writers platform is sure to assist you with accomplishing your objectives of academic excellence quite easily. The vast pool of law academic experts and researchers at your disposal make this possible by helping you deal with your course layout or all support that you require.

  12. Wise care 365 crack program is clean and tidy and allows you to answer all the options. Purpose through tabs and visible cues; The utility is integrated using drag-and-drop, and it is easier to manage system programs than Windows Task Manager Wise Care 365 Pro Crack.

  15. Although there are many options for sex in Lahore, street escorts are not as common as in western cities. If you’d like to have sex with a Chinese girl, you may want to check out the free services offered in Asian countries. In Pakistan, however, homosexual acts are against the law. A Lesbian escort in Lahore can be a safe and efficient companion for any trip to Lahore. Call Girls in lahore

  18. When it comes to nighttime booking, choosing the best escort agency is essential. Personality Lahore Escorts are the top-rated escort agency in Lahore for night booking. The agency’s escorts are fully sanitary and vetted by doctors to ensure your safety. You can be confident that you’ll have the time of your life with your escort. call girls in lahore

  21. บาคาร่ายอดฮิตจากแหล่งรวมเกมบาคาร่าออนไลน์ ส่งตรงจาก Luca-asia ฝาก-ถอน รวดเร็วทันใจ มั่นคงปลอดภัยได้มาตรฐานระดับเอเชีย บาคาร่า

  22. We often love to learn several languages. Are you one among them? Then you must have some idea about linguistic research. You can find facts on its categories, fields of research and much more. Just follow the link and you will be happy with all the information.

  28. AT&T Yahoo is a user-friendly mailing platform that is preferred by millions of users across the globe. Yahoo email inside ATT mail Login has many features but sometimes, users may face issues. To rectify the situation, you can contact professionals to fix the issues. You can reach us immediately for top solutions via the AT&T Yahoo email customer service number.

  33. PremierTimes is a news platform that caters to professionals. We will only give you with interesting stuff that you will find to be quite appealing. We’re committed to bringing you the most up-to-date Automobile news Including Latest Cars,Motorcycles,Vehicle Insurance,Accessories.
    Visit Premiertimes For More

  36. After study several of the blogs with your website now, i truly much like your strategy for blogging. I bookmarked it to my bookmark web site list and will be checking back soon. Pls look at my internet site at the same time and make me aware if you agree.안전토토사이트

  39. Looking at this article, I miss the time when I didn’t wear a mask. baccaratcommunity Hopefully this corona will end soon. My blog is a blog that mainly posts pictures of daily life before Corona and landscapes at that time. If you want to remember that time again, please visit us.

  40. If you’re looking for a sexy escort for your special event, you’ve come to the right place. This article will help you find a model, a street escort, or even a local Aunty to get you where you need to be. Whatever you need, we have a sexy Lahore escort waiting for you. Escorts in Lahore

  41. When it comes to calling high-level call girls in Lahore, you may be wondering how to distinguish between female pimps and schoolgirls. Lahore is the safest city in the world, yet you may not feel completely safe. Nonetheless, this city is full of amazing energy and will allow you to share it with amazing people.

  42. Escorts services in Lahore are a perfect option for naughty night outs. There are plenty of places to enjoy yourself in the city, from cinemas to shopping malls to pubs and bars. In addition to schoolgirls, you can also find beautiful escorts in Lahore who can make your night out unforgettable.

  44. After-sales support services usually result in thousands of unhappy customers. buyers can buy the printer and scanner, however, it is essential that they are aware of the features of the specific HP scanner or printer model that they plan to purchase. On-hand technical support is necessary for users. The HP Technical Support team walk you through the steps of manual installation and the basic problem to solve. There are a number of issues that make the scanner cannot function effectively. Because of the absence or lack of an HP scan driver, or support for HP. Every second we receive calls from scanners seeking assistance, we provide the best customer support in support of the HP scanner. If you have encountered issues with your HP scanner issues, just dial the number get HP Scanner Customer Support (817) 442-6643

  46. To find horney escorts in Lahore, try to register with an online recruitment agency. They keep track of a large database of escorts and can provide you with a wide range of choices. Make sure you interview several escorts so you can find the right one for you. Online recruitment agencies such as Perfect Choice and Backend Services can help you find a suitable horney escorts in Lahore.Hire escorts in Lahore from girlsinlahore.com and enjoy the best Lahore Escorts Services. Call now 03204494414.

  48. Superb, you have written such a beautiful post, this post is worthy of praise, the more this post will be appreciated, the less it will be. please continue this. – powertrac 439

  49. It’s too bad to check your article late. I wonder what it would be if we met a little faster. I want to exchange a little more, but please visit my site bitcoincasino and leave a message!!

  50. Phantom Wallet is a popular Solana blockchain wallet and you can get started with this wallet by setting up your profile with the help of the quick steps that are given in the next section

Leave a Reply

Your email address will not be published. Required fields are marked *