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.

31,152 thoughts on “Department Store Industry”

  1. Thank you a bunch for sharing this with all of us you actually realize what you are talking about! Bookmarked. Please also seek advice from my site =). We could have a hyperlink change contract between us! This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information.. Wow, What an exceptional pronounce. i found this too much informatics. it’s miles what i used to be searching for for. i’d as soon as to area you that absorb keep sharing such kind of data.If realistic, thank you. 먹튀검역소

  2. Hello my friend! I wish to say that this post is awesome, great written and include almost all vital infos. I would like to look extra posts like this. it’s extremely cool blog. Connecting is exceptionally valuable thing.you have truly made a difference. Youre so cool! I dont suppose Ive read anything like that just before. So nice to seek out somebody by incorporating original applying for grants this subject. realy we appreciate you starting this up. this fabulous website can be something that is required on the net, someone after some originality. helpful purpose of bringing interesting things to the web . Thanks for taking the time to discuss this, I feel strongly about it and adore learning more on this topic. 검증나라

  3. Take one of our gorgeous Delhi Escorts with you and become the center of attraction of the party! You can also enjoy a bold and no-strings-attached relationship with one of our sexy escorts in Delhi.

  4. I discovered your website internet site online and check a couple of your early posts. Always keep inside the excellent operate. I just additional your Rss to my MSN News Reader. Seeking forward to reading far more from you finding out down the road!… Dude.. I am not much into reading, but somehow I got to read many articles on your blog. Its amazing how interesting it is for me to stop by you pretty often. just looking around some blogs, seems a pretty nice platform you are using and the theme as well. I’m currently using WordPress for a few of my sites but looking to change one of them over to a platform similar to yours as a trial run. Anything in particular you would recommend about it? 온카맨검증커뮤니티

  5. Awesome dispatch! I am indeed getting apt to over this info, is truly neighborly my buddy. Likewise fantastic blog here among many of the costly info you acquire. Reserve up the beneficial process you are doing here. 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.This is truly an practical and pleasant information for all. Thanks for sharing this to us and more power 카지노프렌즈

  7. Good to become visiting your weblog again, it has been months for me. Nicely this article that i’ve been waited for so long. I will need this post to total my assignment in the college, and it has exact same topic together with your write-up. Thanks, good share . I’ve proper selected to build a blog, which I hold been deficient to do for a during. Acknowledges for this inform, it’s really serviceable . Im grateful for the blog post.Really looking forward to read more. Keep writing. 토토매거진 검증업체

  11. Hello I am so delighted I located your blog, I really located you by mistake, while I was watching on google for something else, Anyways I am here now and could just like to say thank for a tremendous post and a all round entertaining website. Please do keep up the great work. COCO Sneakers

  12. Oral care is an important aspect of overall health and wellbeing for dogs. Poor oral hygiene can lead to a variety of health issues such as bad breath, tooth decay, gum disease, and even systemic infections.

    犬 歯磨き
    https://www.greenkitchen.co.jp/

  13. A private tutor is an individual who provides personalized and one-on-one educational assistance to students outside of a formal classroom setting. Private tutors can offer help in a variety of subjects such as mathematics, science, language, and test preparation.

    家庭教師 個人契約
    https://sense8.jp

  14. PG SLOT สล็อตออนไลน์ เว็บตรง ฝาก50รับ100ถอนไม่อั้น ถอนได้จริง ไม่เสียค่าธรรมเนียมใดๆ สล็อตออนไลน์เล่นสนุก ภาพสวยคมชัด
    พีจีสล็อต ฝาก ถอน ไม่มีขั้นต่ำ เกมเยอะเลือกเล่นได้ ไม่มีซ้ำ แจ๊คพอตแตกง่าย รัวๆ ทุกเกม.

  15. Cosplay, or costume play, is a hobby where people dress up in costumes to represent a character from a movie, TV show, comic book, or video game. Cosplayers often attend conventions or events where they showcase their costumes and interact with others who share their interests.

    セクシーコスプレ
    https://www.only-and-one.com/view/category/cosplay

  16. Excellent .. Amazing .. I’ll bookmark your blog and take the feeds also…I’m happy to find so many useful info here in the post, we need work out more techniques in this regard, thanks for sharing. 
    The Judicial overhaul in Israel

  18. สล็อตเป็นเกมคาสิโนที่มีความนิยมอย่างมากในวงการเดิมพันออนไลน์ เพราะเป็นเกมที่เล่นง่าย มีโอกาสได้รับเงินรางวัลสูง สล็อตpg และมีหลากหลายรูปแบบให้เลือกเล่นตามความต้องการของผู้เล่น

    Slot PG เป็นหนึ่งในผู้ให้บริการเกมสล็อตออนไลน์ที่ได้รับความนิยมอย่างมากในไทย ด้วยเกมที่มีความสวยงามและเสียงเพลงที่น่าสนใจ รวมถึงโอกาสได้รับเงินรางวัลที่สูงมาก

  19. Commercial modeling is a type of modeling where models are hired to promote products or services in various advertising campaigns, including print advertisements, TV commercials, billboards, and other marketing materials. Commercial models are chosen based on their ability to effectively convey the brand’s message and sell the product to consumers. Lovekesh Aneja is a renowned commercial model who has worked with various global brands. you can connect for brand promotion.


  21. MPOCASH merupakan website judi slot online dapat dipercaya dan biro judi slot online terunggul di Indonesia yang udah jadi biro judi slot online paling besar di Asia dengan permainan terkomplet yang diberikan oleh website judi online slot88 MPOCASH.

  22. Whenever a business comes up with a new game or an app, Facebook promotes them to potential customers. Once a customer finds about your business, they can get engaged with your other products as well.

  25. slot838

    Situs judi slot online terpercaya dan terbaik di Indonesia dengan kualitas nomor satu di berbagai game slot gacor hanya deposit 10 ribu rupiah bisa menikmati semua permainan taruhan serta berpeluang meraih kemenangan jackpot maxwin hanya di slot828 online.

  26. One of the Outer Banks’ most well-known tourist destinations, Nags Head is popular with visitors for its wide variety of restaurants, 정캣방
    natural and historical attractions, and magnificent ocean views.

  27. Nags Head beaches are pet-friendly, and water lovers will find outlets for many of their favorite sports, including kayaking,온라인카지노
    windsurfing and kiteboarding. The historic Jennette’s Pier offers exceptional “in-shore” fishing and is home to a small museum and educational research center.

  28. For those seeking more adventure, 카지노사이트
    the Bodie Island Lighthouse gives visitors a spectacular ocean view from the top of the 156-foot tower during the summer months.

  29. “Rehoboth has it all,” says 10Best contributor Marla Cimini, including “awesome beaches, a fun boardwalk, many excellent restaurants and an array of things to do.” 먹킬러
    This coastal town on the Atlantic is also home to the Penny Lane Mall, Clear Space Theater Company, a summertime waterpark and Rehoboth Toy & Kite Company (both a big hit with families), and a number of breweries for kicking back.

  30. Big cities on the water have their perks, but these 10 small towns – all recipients of USA TODAY 10Best Readers’ Choice Awards – offer a tranquility 먹튀검증
    and charm that’s hard to find in more densely populated areas. Here are the 10 best coastal small towns in the U.S. for 2023.

  31. One of the Outer Banks’ most well-known tourist destinations, Nags Head is popular with visitors for its wide variety of restaurants,먹튀사이트
    natural and historical attractions, and magnificent ocean views.

  32. “Rehoboth has it all,” says 10Best contributor Marla Cimini, including “awesome beaches, a fun boardwalk, many excellent restaurants and an array of things to do.” 카지노커뮤니티
    This coastal town on the Atlantic is also home to the Penny Lane Mall, Clear Space Theater Company, a summertime waterpark and Rehoboth Toy & Kite Company (both a big hit with families), and a number of breweries for kicking back.

  33. Not far from Fort Myers and Cape Coral is Sanibel Island, a Gulf Coast getaway known for top-notch resorts, 카지노사이트
    white sand beaches and a laid-back vibe. In between beach days, locals and tourists alike enjoy golfing, perusing the local farmer’s market, dining and plenty of time at one of the nearby spas.

  35. I have to say this post was certainly informationrmative and contains useful content for enthusiastic visitors.
    I will definitely bookmark this website for future.
    Sherry Pc

  37. After reading this article, I think it’s a good article that has a lot of meaning, and it’s a great word that really makes your head and chest realize a lot of things토토사이트

  43. PluralEyes Crack is a software that automatically synchronizes the audio of two systems with the video, increasing the speed up to 20x. It is compatible with both Mac and Windows platforms. The software brings your footage to its own timeline and automatically synchronizes the video from one or more cameras to the audio recorded at the same time.

  44. Thanks for this valuable Blog. i am also blogger and Here in this read, we are going to discuss the process to add the metamask extension to your browser. Make sure to provide the correct details while setting up or accessing the MetaMask Wallet to avoid issues.

  45. The illustrations are a crucial element in children’s books as they can help young readers understand and engage with the story. Children book illustration style
    Children’s book illustrators use a variety of techniques and styles, from traditional hand-drawn and painted illustrations to digital illustrations using software programs.

  48. There is a good reason why professional academic writers don’t charge much. Paying for an expensive task service can be difficult for students who do not have a steady source of income. As a result, some companies that offer Assignment help UK work hard to give sound guidance without breaking the bank. It’s more likely that a low-priced, low-quality academic writing service will thrive than a high-priced, high-quality service.

  50. Want to turn up the heat on your Connaught Place experience? Look no further than Connaught Place Escorts! Our gorgeous and engaging escorts know all the hottest spots in town and are eager to take you on a wild journey. From sexy rendezvous to posh bars, we guarantee a night you won’t forget anytime soon. So why wait? Book a Connaught Place Escort now and experience the best of Delhi’s nightlife!
    https://www.lustdelhi.com/connaught-place-escorts/

Leave a Reply

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