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.

29,929 thoughts on “Department Store Industry”

  2. This is the first time I visit here Slot Dana. I found so much interesting stuff in your blog, especially its discussion. From the tons of comments on your articles, I guess I am not the only one having all the enjoyment here keep up the good work

  3. It is difficult to call beautiful and graceful women in Mumbai. However, with us, you will be surrounded by amazing Andheri Escorts Women from all over the world. Her milky white beauty is not exaggerated, and her sex appeal is amazing. Spend time with the most beautiful women you’ve ever seen. Our Mumbai Andheri Escorts ladies is here to cheer you up with the greatest pleasures. With their easy availability and affordable price, you can avail of the Indian escort services of these hot and attractive ladies and enjoy the best moments. The main advantage of using independent Andheri Escort Service girls is that they will provide their services to men and spend the necessary time to fulfil their needs. A Fabulous Mumbai Andheri Tour Featuring Hot Escort Girls not only provide free sexual services but can also be your companion and personal right hand in your events
    Mumbai andheri escorts,

  5. We build Black worktops from quartz in hundreds of designs that each possesses great durability. Their composition is stronger than granite, making them highly resistant to heat, impact, staining, and scratches. It only translates to having a supremely long-lasting worktop that also adds more value to your property, quite useful when renovating a house for selling.

    Black Worktops

  7. Cnforce 200 is a High-Quality medication that is mainly used for treating erectile dysfunction. It is by far the most capable version of this branded drug Viagra. In Cenforce 150 USA, the drug is sold under the brand name sildenafil tablets. It is a prescription drug; it means the drug can be taken only when prescribed by a doctor.

  8. Bitcoin wallets contain a user’s keys, not their actual bitcoin. Conceptually, a wallet is like a keychain in the sense that it holds many pairs of private and public keys. Bitcoin Wallet | These keys are used to sign transactions, allowing a user to prove they own transaction outputs on the blockchain, i.e. their bitcoin.

  13. First of all, thank you for your post.Your posts are neatly organized with the information I want, so there are plenty of resources to reference.
    I bookmark this site and will find your posts frequently in the future. Thanks again ^^

    제이나인 인터넷 카지노
    제이나인 카지노 검증
    제이나인 카지노 꽁 머니
    제이나인 카지노 룰렛
    제이나인 카지노 추천
    https://www.j9korea.com

  15. กระเป๋า 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

  20. I enjoyed to read your article as you wrote an interesting good article. We offer a range of tafe assignment help to help students with their studies, including writing and editing, proofreading, and formatting. If you’re struggling with your , or if you’re just looking for some help and advice, then thestudenthelpline is here for you. We’re here to help you make the most of your time at university, and we’ll do everything we can to help you succeed in your studies.

  21. It’s very informative and you are obviously very knowledgeable in this area. You have opened my eyes to varying views on this topic with interesting and solid content. Also Plumbing SEO service provider. It’s hard to find good quality writing like yours these days. I truly appreciate individuals like you!

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

    For all aspects of the population, from corporations to service providers, this is a city that offers great opportunities. People come to this place in search of peace and discovery that can help them feel more refreshed physically and mentally. We have top Hyderabad escorts available if that is what you are looking for.

  25. If you’re looking for an Call Girls Service in Lahore, this is the place for you. We know it can be difficult to find the right person for you in a busy city like Lahore. With this in mind, we offer free advertisements on our website so that anyone looking for escorts has a place to go where they can have their queries answered and find someone perfect with just a few clicks of the mouse. All it takes is your location, what type of person you are interested in meeting with, and then we let you know who is available nearby and sets up appointments quick as anything.

  27. The CPS Test is a free click per second (cps) test, which estimates your mouse clicking speeds in given time period. Playing the CPS test game is simple and fun simultaneously. The game is reasonable for all age groups; don’t bother if you are still in a school or doing a corporate job or running a business.

  28. Looking to edit your PDFs online but don’t want to spend any money? Look no further than A1office! We offer a free, easy-to-use online PDF editor that will let you make all the changes you need in just a few minutes. Whether you need to change text, add images, or just make some basic formatting changes, our editor can handle it all. Plus, there’s no need to download any software or create an account – just get started right away!

  29. It’s very informative and you are obviously very knowledgeable in this area. You have opened my eyes to varying views on this topic with interesting and solid content. Also SEO Companies in Jaipur service provider. It’s hard to find good quality writing like yours these days. I truly appreciate individuals like you!

  30. Moviz Land

    موفيز لاند افضل موقع عربي للافلام والمسلسلات بدون اعلانات وبه تطبيق خاص للاندرويد يسمح بربط جوالك بالتلفاز

    Give Us A Visit :
    https://Movizland.i

  31. Interesting topic for a blog. I have been searching the Internet for fun and came upon your website. Fabulous post. Thanks a ton for sharing your knowledge! It is great to see that some people still put in an effort into managing their websites. I’ll be sure to check back again real soon. Baby Toys Australia

  32. A swaddle is a blanket rolled up around your baby. The fabric is usually flannel, cotton, thin gauze, or a stretchy jersey knit. To wrap your baby, place your baby on its back, with their head and neck slightly higher than their heart. Fold down the top right corner toward the middle of the blanket, and then pull the blanket across their chest.

    おくるみ可愛い

    https://item.rakuten.co.jp/salondepetite/mos02/

  37. What a fantastic article! It’s encouraging to see the content so well structured.
    It makes you stand way out from many other writers that can not push high-quality content like you.
    Click this

    제이나인 카지노 쿠폰
    제이나인 먹튀 보증
    제이나인 꽁 머니 카지노
    제이나인 모바일 카지노
    제이나인 카지노 가입 쿠폰 3 만
    https://www.j9korea.com

  40. เดินไป 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

  42. Our Karnal Girl Service are available all time with their real profile photos and WhatsApp numbers. We have top class call girls available at our gallery page with their timings. Karnal Escort Gallery is the only and best place to find a hot and sexy girl for you. You can do several sex activities with her to satisfy your beast.

  45. That is the same thing that I am trying to find. Thanks for sharing this information with us… The application process of evisa Turkey is easy to use and straightforward, the application of Turkey evisa is easy to fill out for everyone, if you want to apply for visa check out the page.

  48. I accidentally searched and visited your site. I still saw several posts during my visit, but the text was neat and readable. I’ll quote this post and post it on my blog. Would you like to visit my blog 메이저놀이터 later? I will appreciate it, thanks

  50. For those of you looking for a more luxurious experience, you might wish to hire a model Call Girls in Lahore. These escorts are extremely stylish, but are notoriously finicky. They have their own standards and won’t engage with customers who are unable to bear their costs. They also consider the mentality of the customer to ensure they’ll be able to provide the best service.

Leave a Reply

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