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.

30,299 thoughts on “Department Store Industry”

  2. It is not easy to find the right Bangalore call girls. There are many girl who are ready to help you fulfill your personal desires and help you live a life of pleasure. The best way to find an escort girl in Bangalore is through online services. However, these sources can be very expensive and time-consuming as well. It is better to choose an independent Call girls who will be able to provide you with the best service at affordable prices.
    Website: https://www.bangalorecallgirls.net/

  7. Desk booking system of Veris supports a level of hierarchy for desk bookings approval as well as overwriting of booking. There is also a provision of supporting multiple smart rules in our hot desk booking software .You can book dedicated desks for teams even at executive levels. Booking rules can be edited at a later time. Log on to getveris.com, to know more about hi tech desk booking software commonly known as Veris Desks.

  8. You can hire our Call Girl Chennai anytime and any place because we provide them with the best facilities. We do not allow our girls to work without proper security, so that you can be assured about their safety. These girls are experienced and talented, and they will know how to please you. They will make sure that you have a great time, and they will do everything they can to make sure that you are happy. Website: https://www.callgirlschennai.net/

  11. I love your blog.. very nice colors & theme. Did you create this website yourself or did you hire someone to do it for you? Plz reply as I’m looking to create my own blog and would like to find out where u got this from. 카지노사이트

  27. Definitely, you can use your research proposal in your dissertation as long as it is not a plagiarised content. One can use of the material again and again in the dissertation if it is not considered as a plagiarised content. However, in the my assignment help project, one needs to do more enriching research work for the completion of the topic in depth. Also, it is to be made sure that the research proposal was not published

  32. Complete guide about lesco bill online check ( lesco duplicate bill copy) – PITC Lesco e bill:
    Each month the Lescobill distributor delivers the bill to your doorsteps. however, there’s a possibility that you may not get your lesco electricity bill (bijli bill lesco consumer duplicate bill online). you may receive the bill on the last date.

    Lesco customers from rural areas face this problem. it is difficult for them to arrange money on the spot and pay the bill instantly. So they pay lescobill with late payment charges.

    Benefits of having lesco duplicate bill ontime:
    Because in the current era of inflation some middle class consumers need time to arrange money for bill payment. And also there may be a crowd of people at banks. We provide the solution of above said problems so LESCO consumers can check lesco bill or get a lesco duplicate bill online copy.

    Few years before, if the electricity bill ( bijli bill) of consumers was lost, there was no other option to get lesco duplicate bill but now in the modern era everything is on the way of transforming them and every one is using technology for ease of everyday routine.

    Now people are leaving the traditional ways of performing tasks and tend to adopt the new technology. Lahore Electricity Supply company has also introduced the services of lesco e bill and now you can easily check your lesco bill online, take duplicate lesco bill copy or save for your record.

    Here is a step by step guide to lesco bill check online 2021 (wapda bill online check).

    Follow these steps to lesco bill check online 2021 (wapda bill online check):
    First of all you need a lesco reference number or customer ID to check lesco wapda bill. You can find a reference number or customer ID from your old bill. It is located on the Top left corner of your old lesco bill. Please note that you need one of them either the reference number or customer ID not both.

    After you noted your reference number or customer ID you need to follow these simple steps.

    Click The button given below “check Lesco bill now”.
    Enter Your reference number in the Reference Number input box or
    Enter your Customer ID in the Customer ID input box.
    Click on the view/download button.
    Take print lesco bill or
    Save as pdf or download lesco online bill
    If you are using Internet Explorer instead of chrome or firefox then you need to perform these additional steps:

    Run Internet Explorer and click on the FILE menu.
    Click on the PAGE SETUP from the file menu.
    Select Paper size as “A4” or according to your page size.
    Remove any values written in Header and Footer.
    Now select page ORIENTATION as Portrait.
    Write values in MARGINS as “0.25”.
    Hit the OK button.
    Again go to the FILE menu click PRINT.
    Choose your printer from the drop-down menu and click the PRINT button.
    That all.Your bill will be in your hands.

  33. As a company that offers Web Design in Vancouver, we pride in our design and the quality of our work. If you are planning to build a website for regular business and corporate needs or to events e.g. wedding venues, contest websites our team just one call away. if you design a website for your Vancouver business, One of the key features will be the user interface. We suggest you to build a very simple, uncomplicated website with detailed information about your business objective.

    The reason for this is that the user interface & learning curve is very high for a website. Most of the time, the reason people visited your site is because they found a particular tool, image, video, or something else they see on your site. If your site is difficult to use or cannot answer their questions they will leave. https://webdesignvancouver.net/

  35. Thanks for sharing. I found plenty of attention-grabbing info here. an extremely sensible post, terribly appreciative and hopeful that you simply can write more posts like this websites! 슬롯

  42. SushiSwap is an open source exchange that manages yield farming and token swaps by using the use of an Automated Market Maker (AMM) smart contract. 

  43. The Infinox brokerage offers a variety of account types and features for traders of all levels. It accepts debit/credit cards, Skrill, Neteller, and bank transfers. The accounts offer a variety of trading features and are optimized for performance. Infinox also offers a number of payment options, including instant execution and flexible leverage. After you’ve opened an account, you can manage your trading account through the Infinox Client Portal.

    https://forextoplist.vn/san-infinox-lua-dao-khong/

  45. Quickbook Support Net is equipped with the experienced technical support teams who are expertise in their respective fields. Our team of experts is available round the clock to help you in averting all your QuickBooks related issues.

    Read this blog Quickbooks Error Code 80070057

  47. Smarana is a Past Life Regression & Hypnotherapy Services and healing centre in Delhi-NCR. We have created this place with the blessings and messages of our spiritual masters that we received during our many years of journey that we have spent exploring all the aspects of inner mysteries and possibilities that can help us to deal with our many life problems that are beyond the capability of the human mind Past life regression.

  48. thanks for sharing a good article here for providing a great knowledge Luxykitchens and Millwork is a family owned business based in Miami, we offer meticulously designed kitchens, Millwork and Custom woodworks, which integrates high technology that serves as the center of the home.

Leave a Reply

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