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.

45,428 thoughts on “Department Store Industry”

  4. hyy guys i am going to discuss about COINLORD is one of its Kind. India needs today on Android and iOS. This exchange is frequently adding many in app-feature. The web three evolution and encryption crypto enthusiasts from all the world’s. Block chain technology has become the only constant in an increasingly
    uncertain crypto currency market. COINLORD application platform for trading and investing purpose.
    crypto currency platform

  6. Gives you an opportunity to book both national and international call girls with our Lahore escorts agency. We do not provide call girls to people at cheap rates, only our escort agency is available for those people who want to get good call girls by spending more money. If you belong to a high profile Escorts Girls in Lahore and you like to spend more money for a good call girl then you can join our escort agency if you belong to the low class and you want to get a call girl at a cheap rate So we apologize to you because our service is for those people who are high profile and VIP business people who believe in quality more than money.

  7. This is a good subject to talk about. Generally when I come across these sort of things I like to post them on Digg. This article probably wont do well with that crowd. Ill take a look around your site though and submit something else. 축구중계

  8. From the outset, we have delivered on our promises, and everyone in the market has praised us. You may double deal escorts services Karachi meet many young, attractive, independent girls in Karachi or nearby who can welcome you to their place and have some such enjoyable moments that you can’t simply forget.

  10. Abu Dhabi airport transfer:- Make a great first impression when you arrive in Abu Dhabi with our luxury airport transfer services. Our fleet of high-end vehicles includes limousines, sedans, and SUVs, ensuring that you travel in comfort and style. Our professional drivers will meet you at the airport and take you directly to your destination, whether it’s a hotel, conference center, or private residence.

  11. Experience an amazing star line Online Matka Play Games with the full rate and timely payments, with minimum deposits. Gamble around with the best poker face platforms that gives you the best winning experiences.Online Matka Play

  13. India’s no1 Online Matka play Gaming website with 100% playing tips and tricks. Visit our website and win real cash. We also offer Satta Matka, Tara Matka, Online Matka king, Satta King and more.Online Matka Play

  15. Can I say thats a relief to uncover someone that truly knows what theyre speaking about on-line. You actually understand how to bring a worry to light and work out it crucial. The best way to must read this and can see this side of the story. I cant think youre less common because you absolutely provide the gift. 구글 상위노출

  16. My Name is Poonam Singh and I am a very attractive and sexy lady providing Laxmi Nagar Escorts services in Delhi. The clients who have consistently expressed their desire to spend time with me have always complimented my well-toned body and attractive features.

  17. For those who miss the broadcast in its entirety or specific portions of it, the NBC Sports streaming service allows the option of on-demand viewing for the fan. If you’re a cord cutter, here are ways to rugby world cup 2023 tickets.

  18. I am Emily Griffin working in a renowned organization. With quicken share screen our Quicken Help team may offer you the precise solution for the issues you are coming across. We cannot control your PC but we can just guide you to the ideal place on your screen. You can reach us through the phone number available on our website. We will be very happy to assist you.

  19. I am Emily Griffin working in a renowned organization. With quicken share screen our Quicken Help team may offer you the precise solution for the issues you are coming across. We cannot control your PC but we can just guide you to the ideal place on your screen. You can reach us through the phone number available on our website. We will be very happy to assist you.

  23. Who are enthusiastic about publishing Education Updates in the public interest with transparency. dpost is an initiative of professional writers who have banded together to provide devoted news coverage of dpost.in current events in India. Our team consists of professional writers and citizen journalists with a wide range of journalism interests.

  24. Abroadvice is a reputable company that offers professional PTE exam coaching in Noida for top results. Their experienced and certified trainers provide comprehensive training programs that cater to the individual needs of each student. With personalized guidance and support, practice tests, mock exams, and personalized feedback, Abroadvice ensures that students are fully prepared to achieve their desired scores in the PTE exam. Their coaching programs cover all four language skills tested in the PTE exam and are designed to improve language skills and boost confidence. With Abroadvice’s PTE exam coaching, students can be sure of achieving top results and fulfilling their dreams of studying abroad.
    Read More Blogs-
    IELTS Coaching Center in Noida
    Duolingo English test preparation
    abroad study in australia

  28. Maskad® hydrogel infusion face mask provides immediate cooling and relief to irritated and sensitive skin. Best Face Pack For Glowing Skin is a great option for anyone looking for a high-quality and effective face pack that can provide a wide range of benefits for all skin types. Sign up for special promotions. Get 15% off your first order & exclusive offers.

  29. To resolvemy hp printer is offline set your default printer in Windows 10. First, in Windows’ list of devices, select Printers & Scanners. Uncheck the box next to Let Windows manage my default printer if it is already checked. Additionally, select Manage after selecting the printer from the list with the same name as your printer. If there are several printer names listed, pick the one that is running or not. Lastly, select Set as default from the Manage your device menu.

  30. Searching for commercial & personal insurance at the best price in Edmonton? Then, you’re at the right place. Contact us to get insured today. We deal in all types of insurance like personal, commercial, business, vehicle, property, travel, health & life. Call now on +780-423-0909!

  31. Sports betting is a form of gambling that involves predicting the outcome of sporting events and placing wagers on the predicted results. It has been practiced for centuries and has evolved into a popular and widespread activity around the world.

    บาร์เซโลน่า คืนนี้
    https://volleyballlive99.com

  32. The popularity of sports betting can be attributed to several factors. First and foremost, it adds an extra level of excitement and engagement to watching sports, as bettors have a personal stake in the outcome of the events they wager on. Additionally, sports betting provides an opportunity for individuals to test their sports knowledge and analytical skills while potentially earning monetary rewards.

    นักเตะมาดริด
    https://nbascore55.com

  33. Overall, he said, Biden has instructed the military and intelligence community to better understand “unidentified atmospheric phenomena,” which have been referred to in common parlance for decades as “unidentified flying objects,” or UFOs. How to Get After Effects on Chromebook

  34. Terra hill floor plan is a freehold new condo launch by Hoi Hup Realty & Sunway Developments. The District 5 condo is located at Yew Siang Road, just 350 metres from Pasir Panjang MRT. The condo will comprise of 270 units and is near the Greater Southern Waterfront. To get Direct Developer Price and Discounts, visit our website or call +65 6100- 0721 for more info.

  35. In sports betting, individuals, known as bettors or punters, place bets on various aspects of a sporting event, such as the final outcome, scores, individual player performances, or specific occurrences within the game. The wagers can be made through bookmakers, online platforms, or at physical betting establishments.

    แมนเชสเตอร์ยูไนเต็ด
    https://livescorevolleyball.com

  36. Sports betting is the activity of predicting the outcome of a sports event and placing a wager on that prediction. This can be done through various means, including online platforms, bookmakers, or casinos.

    พรีเมียร์ลีก อังกฤษ
    https://doball123.com

  37. Your post has those facts which are not accessible from anywhere else. It’s my humble request to u please keep writing such remarkable articles
    메이저사이트

  38. Queen Arwa University is a Yemeni private university founded in 1996 in Yemen in the name of Queen Arwa bint Ahmed Al-Sulayhi. The university has many different academic fields and various specialized studies, including humanities and social sciences, commercial sciences and management, engineering, computer, medical sciences such as dentistry, laboratories, pharmacy, art and law It is also accredited by all standards from the Ministry of Higher Education and Scientific Research and is considered one of the most important Yemeni private universities.
    Queen Arwa University Yemen private university

  43. Sports betting has been popular for centuries and has become increasingly accessible with the rise of online betting. It is commonly done on popular sports such as football, basketball, horse racing, and boxing.

    เรอัลมาดริด
    https://thscore888.com

  45. ¡Buen artículo! Es una publicación muy informativa y útil. Gracias por la información, en este sentido me gustaría recomendar sitios relacionados con el reclutamiento, espero chicas escort Tucuman que sean de utilidad.

  47. Software development is the process of creating, designing, and maintaining computer programs and applications. It involves a series of steps, including planning, coding, testing, and deployment, with the goal of producing reliable and functional software solutions.

    Hire Dedicated Developers
    https://dexoc.com

  48. Software development is the process of creating, designing, and maintaining computer programs and applications. It involves a series of steps, including planning, coding, testing, and deployment, with the goal of producing reliable and functional software solutions.

    Custom Software Development India
    https://dexoc.com

Leave a Reply

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