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.

30,442 thoughts on “Department Store Industry”

  2. Thank you for sharing excellent informations.Your site is so cool.I am impressed by the details that you’ve on this blog.for more information You can check my website. You can Get more new latest updates about my sites. So follow and click below the link.

  5. Getting accompanied in Lahore is the ideal method for dazzling your accomplice. You can track down a hot escort on a few dating sites, pick the young lady who suits your requirements, and afterward book a bundle. The bundle cost incorporates lodgings, transportation, unfamiliar exchange charges, and the administration of your escort. Escorts in Lahore are additionally accessible for exceptional events like weddings, commemoration festivities, and birthday celebrations.

  7. Construction project software provides many benefits in facilitating efficient project management for construction projects. These software solutions offer features for project planning and scheduling, resource allocation, cost tracking, and communication management. By using construction project software, project managers can plan and execute construction projects more effectively, optimize resource utilization, and reduce project costs.

  8. Website Development Australia has earned the distinction of being Best website development company in Australia, primarily due to its extensive experience and specialized expertise in the field. The company’s innovative and creative website designs are noteworthy, and their personalized solutions are tailored to meet the unique needs of each client. Furthermore, their responsive design ensures that websites are optimized for performance across all screen sizes, while their SEO-friendly approach ensures that websites rank well in search engine results pages. Additionally, the company’s competitive pricing and outstanding customer support make them an excellent choice for businesses seeking to enhance their online presence. For those seeking a website development company in Australia, Website Development Australia is an exceptional option.

  14. Do you have any joint pain that you can’t place your finger on? Schedule a consultation with Bend Joint Health Fast right away. Our Joint Health Specialists can help you alleviate your joint pain and get back to your daily activities. Contact us today to schedule an appointment.

  15. I found this blog post very informative and helpful. We pay attention to every single topic starting with a brief introduction about oneself and background, and then diving into academic achievements and goals, makes sense and can help create a clear and cohesive narrative. The idea of highlighting not only academic achievements but also personal experiences and goals is a great suggestion, as it can help make the application stand out. We are here to provide you with the best assistance on SOP for Canada. Get connected now and have one-on-one support.

  16. We provide the best content for New Adventures. Our expert writers share stories, tips, and advice on everything from extreme sports to eco-tourism. Join our community and let us inspire your next adventure today Best New Adventures in USA

  17. Delhi is a beautiful city for romance, so you want Adult experience without any fear so choose South ex escorts girls and women are independent and fulfill your erotic and sexual needs in bed girls body is just like butter cream you can never forget the night which is you spent with him Read more visit the website:-

  18. Thanks for sharing such an amazing piece of content. We work with businesses of all sizes, from start-ups to large corporations, and our goal is to help our clients succeed in an ever-evolving digital landscape. Our services include web design and development, digital marketing, branding and graphic design, software development, CRM Solutions, virtual staffing, Call Center and Telemarketing, e-commerce development, technical support services, conversion rate optimization, team augmentation services.
    At Crecentech, we believe in taking a comprehensive approach to problem-solving. This means that we start by understanding our client’s goals and objectives, and then use our expertise to create customized solutions that deliver results. Our team is made up of talented and experienced professionals who are dedicated to delivering exceptional work that exceeds our client’s expectations.

  20. If you’re an active PayPal user, you must know that signing in is the foremost step towards accessing its services. This widely used payment system permits you to transfer and receive funds securely. This guide will assist you in better understanding the PayPal login platform and how to sign up for it.
    PayPal Login

  27. Tuition management systems have many benefits for educational institutions. One of the main advantages is the ability to automate and streamline administrative tasks related to billing and payment processing. This saves time and reduces errors, allowing staff to focus on other important tasks.

  29. aplikasi stok barang gratis adalah aplikasi manajemen stok barang yang dapat digunakan oleh bisnis kecil dan menengah untuk mengelola inventaris mereka secara efisien. Aplikasi Stok Barang Gratis ini mencakup fitur-fitur dasar yang dapat membantu pengguna dalam memantau jumlah barang, melacak produk yang masuk dan keluar dari gudang, serta mengelola pesanan.

  30. इस ब्लॉग पर Punjab Kings Team 2023 पर नवीनतम स्कूप प्राप्त करें, जिसमें उनके खिलाड़ियों की सूची, फोटो, टीम, कप्तान और रिटेन किए गए खिलाड़ी शामिल हैं।

    Punjab Kings Team 2023
    LSG Team 2023
    Quick Gyan
    GT vs CSK

  32. Are you trying to give in to your desires by looking for escorts in Islamabad? I want to hire an escort in Islamabad for a Burberry model experience, a wedding, or the birthday party of my girlfriend. You can choose from our many beautiful Promenade hosts who have signed up. We are one of the escort services in Islamabad that is growing the fastest.

  34. sistem laporan keuangan adalah sebuah aplikasi yang dirancang untuk membantu pengguna dalam menghasilkan laporan keuangan yang akurat dan terstruktur. Aplikasi ini dapat digunakan oleh individu atau perusahaan dalam menghasilkan laporan keuangan seperti neraca, laporan laba rugi, dan arus kas.

  35. aplikasi pembuat laporan keuangan adalah sebuah aplikasi yang dirancang untuk membantu pengguna dalam menghasilkan laporan keuangan yang akurat dan terstruktur. Aplikasi ini dapat digunakan oleh individu atau perusahaan dalam menghasilkan laporan keuangan seperti neraca, laporan laba rugi, dan arus kas.

  36. aplikasi pembukuan usaha adalah aplikasi yang dirancang untuk membantu pengguna dalam mengelola pembukuan keuangan usaha mereka secara efisien dan efektif. Aplikasi ini dapat digunakan oleh individu atau perusahaan dalam mengelola pembukuan keuangan, seperti pencatatan pendapatan, pengeluaran, dan pelaporan keuangan.

  38. aplikasi akuntansi umkm adalah aplikasi yang dirancang khusus untuk membantu UMKM dalam mengelola keuangan mereka secara lebih efektif dan efisien. Aplikasi ini dapat membantu pengguna dalam mengelola pembukuan, pelacakan arus kas, penghasilan, dan pengeluaran.

  42. Lingerie refers to undergarments that are typically designed to be visually appealing, sensual or provocative, often worn by women. These garments include bras, panties, thongs, garters, corsets, stockings, and other similar items.

    セクシーランジェリー
    https://www.only-and-one.com

  49. Starting a business involves the process of creating a new venture or enterprise from scratch, typically with the goal of generating a profit. This process usually involves identifying a product or service that has market demand, conducting market research, developing a business plan, securing financing, registering the business and obtaining any necessary licenses and permits, hiring employees or contractors, and launching the business.

    ブランド 買取 開業
    https://royal-jp30.com/

  50. Branded products refer to goods or services that are marketed and sold under a specific brand name. A brand is a unique identifier that distinguishes one product or service from another and creates a perception of quality, reliability, and value in the minds of consumers. Branded products can be found in various industries and sectors, including consumer goods, fashion, technology, and food and beverage.

    ブランド 鑑定書
    https://brand-kanteisyo.com/

Leave a Reply

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