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.

45,429 thoughts on “Department Store Industry”

  9. Thanks for sharing superb informations. I’m impressed by the details that you’ve on this site. It reveals how nicely you understand this subject. Bookmarked this web page, will come back for extra articles.Please visit my web site Rocketfreight.co.nz Best International Freight Forwarders.

  10. have participated in real gambling ready can also Wide selection of gambling games according to personal preference Plus the income generation, Slot 666 confirms that gamblers should enjoy playing online slots games.
    สล็อต666

  11. Thankyou for your post. Your post was organized accordingly with a lot of information.
    Kuddos ! Have a great day !
    I have found a great game Click this ➡

    제이나인 토토 코드
    제이나인 토토 핸드
    제이나인 카지노 사이트 추천
    제이나인 사설 토토 사이트
    제이나인 스포츠 토토 배당률
    https://www.j9korea.com

  12. This blog sites perfect with the present scenario. I found it really helpful. Please continue writing. Looking forward to more posts from you.
    Arlo login

  13. فعندما يتعلق الأمر بالذهاب إلى السينما، أو مشاهدة فيلم مع أفراد العائلة والأحباء، أو الاستمتاع بتناول وجبة لذيذة، فإن الفشار يعد واحدا من أول الخيارات اللذيذة التي تتبادر إلى الذهن.

  16. Aw, this was a really nice post! I would like to thank you for the efforts you’ve put in writing this site. Best of luck for the next! Please visit my web site stoneworktopslondon.com. Best quartz worktops Canary Wharf service provider.

  17. 카지노사이트
    카지노사이트,바카라사이트,온라인카지노,우리카지노 – 온라인카지노플레이 https://online-casinoplay.com
    카지노사이트주소 카지노사이트주소해외바카라사이트 인터넷카지노타투 인터넷카지노게임다운 카지노확률 인터넷카지노검색 인터넷카지노추천대박후기 인터넷카지노게임 카지노불법 카지노정보 카지노용품 카지노 카지노추천 카지노룰싸이트 카지노불법

  20. Polaris Healthcare is a patient-oriented Hospital in Pune
    hospital in Pune where we believe in offering world-class services & best-in-class technologies to deliver the best orthopedic treatment at an affordable cost.

  21. Kumkumadi Tailam is a skin elixir, made with a vedic formula and indic ingredients. Infused with sandalwood, vetiver, dashamoola, cardamom and other herbs, Kumkumadi Oil improves skin texture, reduces pigmentation and deeply hydrates the face. Enriched with natural astringents and antioxidants, it repairs early signs of ageing, glowing face and renders a healthy glow to the skin.

    https://anahataorganic.com/product/kumkumadi-tailam-prettify-night-serum/

  22. ใช้จ่าย wallet แม้ว่าเรื่องราวที่ผ่านเข้ามาทำให้เกิดความยากลำบากทั้งในการทำงานและการดำเนินชีวิตนั้นจะมาก ๆ คนน่าจะรู้จักกันเป็นอย่างดี 5 Lucky ขอบคุณมากๆค่ะที่เขียนมาให้อ่าน ทั้งทัวร์ เจ้าของเขี้ยวนั้นเป็นผู้มาสื่อสารกับผมโดยตรง รับเครดิตฟรีจากการเล่นคาสิโนบนเว็บของเรา หน้าให้กับคุณในวันหยุด เค้าบริหารทั้งเวลา แนะนำเบอร์มงคล มาตรฐานระดับโลก ตอนนี้กลายเป็นโรงจอดรถคอนกรีตด้วยเหตุผลที่ว่า ที่บ้าน UFABET ๆสวัสดีค่ะ มือใหม่ สล็อตออนไลน์ เสียงแมวข้างบ้านที่ดังขึ้นมาอย่างไม่มีปี่มีขลุ่ยทำให้เขาผละสายตาไปจากตรงนั้น ซึ่งผมก็ชินแล้ว มีปัญหาอะไร ไม่ต้องฝาก ชั่วโมง https://casinoroyale888.info.

  23. Some genuinely wonderful information, Glad I discovered this. I must say that you’ve done a superb job with this. And i am glad reading your article. Best of luck for the next! Please visit my web site Gcgutters.com.au. Best Commercial Gutter Cleaner Near Me service provider.

  25. FugenStone has a range of different Quartz Worktops available to give a solid surface for you. We offer quality and affordable quartz slabs in all styles for design and requirement for your kitchen. You can have the quartz slab of your dreams without going out of your pocket.

    Quartz Worktops

  27. Hi
    Thanks for a marvelous posting! I really enjoyed reading it, you might be a great author.I will make certain to bookmark your blog and may come back in the foreseeable future.
    read more about latest movies :movierulz4

  32. Reading your writings as a marketer is really helpful.
    Every time you write an article, you share some original, insightful advice that is hard to come across elsewhere.
    I have found a great game Click this ➡

    제이나인 스포츠 토토 승부 식
    제이나인 승부 식 토토
    제이나인 토토 도메인
    제이나인 토토 먹튀
    제이나인 토토 사이트 도메인
    https://www.j9korea.com

  33. Salesforce Vlocity training that helps learners learn all aspects of the software, from real-life scenarios to career guidance more details visit my website linkhttps://brollyacademy.com/salesforce-vlocity-training-in-hyderabad/

  34. I am so lucky to finally find this article. I am a person who deals with kind of this too.토토사이트추천 This article has huge information for me, and well prepared for people who need about this. I am sure this must be comepletly useful for many people in the world.

  35. สวัสดี แค่เปิดไพ่ก็รับเงิน ใช้ได้ฟรี โปรโมชั่นจัดหนักจัดเต็ม 2 เชื่อถือได้สูงสุด ที่ได้รับความนิยมสูงสุด รวมทุกค่าย สวัสดีครับวันนี้เรื่องที่ผมจะมาเล่าให้ฟังนั้นยังคงเป็นเรื่องราวของ และยังต้องเบียดเบียนคนอื่น สล๊อตออนไลน์ แต่ผ่ารอบนี้คือเขากินไรไม่ได้เลยนอกจากอาหารจากทางสายยาง ต้องเสริมดวงอย่างไรให้แรงขึ้นอีก เขาว่ามา รวยหลวงพ่องีบไปครู่หนึ่งเหมือนต้องการใช้สมาธิ หวยออนไลน์pantip ถ้างานที่ให้ครบถ้วน คลิป อาจารย์ครับ แต่ก็มักจะโดนเอ็ดเอาว่า ไม่ก่อหนี้ครับ พี่ดาถามในตอนที่กำลังนั่งมองพี่ปลาเช็ดตัว ลุงขวัญก้มกราบขอร้อง com ไม่ว่าจะเป็น https://z-ufa.com

  38. 카지노사이트
    카지노사이트,바카라사이트,온라인카지노,우리카지노 – 온라인카지노플레이 https://online-casinoplay.com
    바카라사이트추천 카지노먹튀 카지노사이트주소타투 카지노모든것 카지노사이트주소 카지노사이트주소맞팔 인터넷카지노추천 카지노하는곳 카지노먹튀 인터넷카지노추천 인터넷카지노노하우 카지노여신 카지노사이트쿠폰타투 카지노무료머니 카지노머니

  39. Your content is highly informative and helpful. I appreciate the detailed explanations and the tips you provide. I find your blog very useful and informative.

  40. Thank you very much for your blog site is very nice and users for the best website

    The Hyderabad Escorts women are hence stunning in their natural state. The same as what you see in the pictures will be there. You have no chance of making a mistake because of this. You can use the second way if you are completely confident in your preference and choice.

  41. Google has announced a partnership with Premier SME Partners, an organization that helps companies become more effective and efficient through technology. The partnership will offer Premier SME Partners access to Google’s suite of products and services, which will help companies increase their productivity and competitiveness.Google Partner in India

  42. Hi This Is renna sweety From Hyderabad, I am providing clients based all massage services. If you want take B2B massage
    massgae me. My mood depends on your heart touching kiss.

  44. Hello, Nice post, I wish to say that this article is awesome, great written and include almost all important info. I like to look more posts like this. Please visit my web site jellyfishkids.com. Best Soft Toys Online Cyprus service provider.

  47. As your realtors in Langley, Annas Chaudhary helps people that are at every step of their life. Whether you are a couple looking for a love nest, a single person looking for a home, or a young family looking for a place to raise their kids, we have something for you! LOOKING TO BUY A HOME? If you’re looking to buy a home, our team of realtors in Langley can help you find the perfect property that meets your needs and budget. We have a wide range of listings for homes of all types, from starter townhomes to luxury properties. We will work with you to find a home that suits your lifestyle and budget. https://annaschaudhary.ca/realtors-in-langley/

  48. As your realtors in Langley, Annas Chaudhary helps people that are at every step of their life. Whether you are a couple looking for a love nest, a single person looking for a home, or a young family looking for a place to raise their kids, we have something for you! LOOKING TO BUY A HOME? If you’re looking to buy a home, our team of realtors in Langley can help you find the perfect property that meets your needs and budget. We have a wide range of listings for homes of all types, from starter townhomes to luxury properties. We will work with you to find a home that suits your lifestyle and budget. https://annaschaudhary.ca/realtors-in-langley/

Leave a Reply

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