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.

29,722 thoughts on “Department Store Industry”

  1. A soft loan is a type of loan that offers more flexible terms and lower interest rates compared to traditional loans. It is often offered by government agencies or non-profit organizations to support small businesses or individuals in need of financial assistance.

    ソフト闇金
    https://marukin.co/

  6. It’s crucial to keep in mind that a call girl from Lahore is a professional and need to be treated as such when you first meet her. As a result, you can count on her to be tidy, on time, and discreet. She’ll probably be willing to hearing about your requirements and preferences as well in order to make sure you enjoy the event.
    https://escortslahore.website

  8. แอปพลิเคชัน pgslot ถือได้ว่าเป็นศูนย์รวมเกมเดิมพัน คาสิโนออนไลน์ สล็อตpgฟรี ยุคใหม่ที่มีความน่าสนใจมาก เพราะมี ทางเข้าเล่นที่หลากหลาย รวมเกมจากหลายค่ายผู้สร้าง ที่เรียกได้ว่ามาครบจัดเต็ม และสไตล์ของเกมยังโดดเด่นเป็นเอกลักษณ์ที่ชวนให้ผู้เล่นหลงใหล จนกลายเป็นความชื่นชอบโดยเฉพาะไปเลย เราจะมาอธิบายเกี่ยวกับตัวเกมนี้ให้ทราบกันว่า มีความพิเศษและมีจุดเด่นอะไรบ้าง

  9. construction business software offers significant benefits to construction companies, ranging from operational efficiency to increased productivity. With this software, companies can manage projects, control budgets, track inventory, manage teams, and monitor and report project progress in real-time. In the long term, construction business software can also help increase profits and strengthen a company’s reputation through operational efficiency and transparency.

  10. Math will always be an important part of human life in a number of ways that are useful and clear when trying to understand the scientific and operational principles that make up the whole world. When it comes to math, different areas like algebra, statistics, and calculus require correct knowledge. If you don’t get good training, the results you get won’t be valid. Math assignments require a lot of knowledge about the subject, but with the right help with statistics assignments, it is possible to get the results you want. To finish your my homework done , you will need to review the main topic’s prerequisites to find the right answers. Statistics is a straightforward subject that can be easily solved regardless of the stream being studied.

  11. Contractor management software provides numerous benefits in managing contractor relationships and improving the overall efficiency of a project. With contractor management software, users can track contractor performance, monitor compliance with safety regulations and project requirements, and easily manage contracts and documentation.

  12. Ankita Sharma is a Bhopal-based call girl known for her seductiveness and passion in the bedroom. Providing intimate companionship to those who seek it, she is highly sought after and renowned for her exceptional service. Call Girls Low Rate

  15. Balancer (BAL) is an Ethereum token that powers the Balancer protocol, an automated market maker that lets anyone create or add liquidity to trading.
    Balancer

  17. Civil Engineers are the backbone of modern society. They help in designing, planning, and constructing the mammoth urban structures we see around us. From the roads to the public restrooms, you can see the touch of civil engineering everywhere. This makes civil engineering an in-demand subject for the careerist youth of the country. The high demand for Taxation Assignment Help also proves this fact. So let’s find out how civil engineering affects our daily life –

  19. Are you looking for high-profile call girls in Delhi NCR area? Search no more, because we provide the best services available 24/7. With us, you are guaranteed to find the independent call girls you desire! Call Girls Phone Number

  20. Terima kasih untuk informasi yang sangat baik. Menurut EVA-HR, Program Rekrutmen adalah proses yang dilakukan oleh suatu organisasi atau perusahaan untuk mencari, mengidentifikasi, dan memilih calon karyawan yang potensial untuk mengisi posisi yang tersedia dalam perusahaan tersebut.

  21. CTMOT offer reliable and discreet services 24/7! Our high profile call girls specialize in providing ultimate pleasure for anyone looking for a good temporary companion. Reach out to us anytime for the perfect call girl of your dreams! Call Girls WhatsApp Number

  22. Comprar Alprazolam. Todos nuestros productos son 100% de alta calidad, puros y genuinos. El envío es 100% seguro, rápido y confiable en todo el mundo. compre alprazolam en línea, alprazolam a la venta, compre alprazolam en línea legalmente . Alprazolam For Sleep

  24. StreetGirls69 high profile Escort Service Low Rate specialize in providing ultimate pleasure for anyone looking for a good temporary companion. Reach out to us anytime for the perfect call girl of your dreams!

  25. Looking for call girls in the Bangalore area? Look no further – with us, you can get access to high-profile independent call girls who are available 24/7 at affordable rates. We guarantee to provide the best services! Bangalore Call Girls Low Rate

  26. A personal loan is a type of unsecured loan, which means that it is not backed by any collateral. It is usually taken out by individuals to meet their personal expenses, such as paying for home renovations, medical bills, or consolidating credit card debts.

    優良 ソフト闇金
    https://balloon-sy.com/

  29. ekhan is a initiative of professional writers who have come together for dedicated news coverage of latest happenings around the country (India). Our team comprises of professional writers & citizen journalists https://ekhan.in/ with diverse range of interest in Journalism who are passionate about publishing the Education Updates with transparency in general public interest.

  30. Thanks for the great post you posted. I like the way you describe the unique content. The points you raise are valid and reasonable. I am a tech support expert telling you about.

  31. A personal loan is an unsecured loan that can be used for a variety of personal financial needs, such as consolidating debt, paying for a large expense like a wedding or home improvement project, or covering unexpected expenses.

    ソフト闇金 老舗
    https://sokujitu-cash.com/

  32. The assignment submission period was over and I was nervous, casinocommunity and I am very happy to see your post just in time and it was a great help. Thank you ! Leave your blog address below. Please visit me anytime.

  35. Beverly Golf Avenue boasts a luxury
    Residential Property In Mohali established in the lap of green nature. It comprises 4 bhk, 3 bhk flats for sale in Mohali. These luxury flats in Chandigarh set a perfect example of what luxury is all about. Beverly Golf Avenue idesigned by Hafeez Contractor, a Padma Bhushan awardee, the chief architect who has left no stone unturned to provide you with the best apartment for sale in Chandigarh and offer a comfortable and luxury-rich lifestyle. Explore 3 BHK, 4 BHK luxury flats in Mohali for sale at Beverly Golf Avenue and find your perfect home for freedom, comfort, and a rich lifestyle.
    Contact for more details: +91 90277 90277

  36. Daksha Digitas is the best Digital Marketing Company in Chandigarh. We treat the businesses of our customers as our own. Customer happiness is extremely important to us, therefore we’ll do everything in our power to make sure your business operates to the best of its abilities. We are here to provide the top spot, something that would take years to do with traditional marketing. We are committed to assisting your company in succeeding since we think your company deserves it.

  38. Comprar Alprazolam. Todos nuestros productos son 100% de alta calidad, puros y genuinos. El envío es 100% seguro, rápido y confiable en todo el mundo. compre alprazolam en línea, alprazolam a la venta, compre alprazolam en línea legalmente
    Alprazolam para dormir

  39. Positive site, where did u come up with the information on this posting?I have read a few of the articles on your website now, and I really like your style. Thanks a million and please keep up the effective work. cheapo flights tickets.com

  40. สล็อตเว็บตรง มีความหมายคือ เว็บสล็อตออนไลน์ที่เชื่อมต่อกับผู้ให้บริการเกมสล็อตโดยตรงที่ไม่ผ่านคนกลางหรือเอเย่นต์นั่นเอง

  41. Great information! If you are planning a trip to Europe or France then, shop for the best travel eSIM Europe by visiting the official website of Holiday eSIM. Here, you can find the best deals and offers on travel eSIMs that will help you stay connected to your loved ones throughout your visit to a foreign country without any hassle.

  42. Its a great pleasure reading your post.Its full of information I am looking for and I love to post a comment that “The content of your post is awesome” Great work. Shavuot 2023

  47. Dark circles, scars, and other flaws can be concealed with concealer. Your makeup can be set with powder to keep it appearing flawless all day. Your cheeks can get a color boost from blush, and your eyes can get a definition boost from mascara.

    primer makeup products

  48. In a business area, airline offices are typically found, and the Qatar Airways Warsaw office is probably situated in a place that is simple for clients to get to. It’s possible that the office will be furnished with welcoming reception spaces and a modern, professional style.

  49. To get the Coinbase login error fixed, you may need to reset your mobile device. If this does not help you get it fixed, then you should try changing security settings in your Coinbase.com login account. There are no Coinbase limits for Instant Card Cashouts, but your card may have limits. Check with your card provider if you don’t know how much you can instantly cash out to your debit card. Card data is securely transferred and hosted off-site by payment vendors.

Leave a Reply

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