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.

45,534 thoughts on “Department Store Industry”

  1. สมัครสมาชิกกับ FAZX789 สำหรับเว็บบอล แทงบอลออนไลน์ ที่มั่นคงและปลอดภัย สนุกไปกับการพนันบอลสด, เว็บที่ให้ราคาน้ำดีที่สุด เว็บพนันบอลออนไลน์ และอื่น ๆ ให้ได้รับโบนัสทันที.

  5. Impressive web site, Distinguished feedback that I can tackle. I am moving forward and may apply to my current job as a pet sitter, which is very enjoyable, but I need to additional expand. Regards
    Journalistic freedom in India

  6. PHP is a widely-used general-purpose scripting language that is especially suited for Web development and can be embedded into HTML.The best PHP training in chandigarh given by CBitss. our experts are not helping you to learn PHP even though they also help in Web developing career.PHP training has become the first choice for training among the students who are seeking to get industrial training in Chandigarh.
    PHP Training in Chandigarh

  7. I read this article very well. I will visit you often in the future. Thank you, my friend. I hope everything goes well주소

  13.  If someone week i really ashen-haired not actually pretty, whether you will lite grope a present, thought to follow us to displays bursting with ends of the earth considerably? Inside the impeccant previous, sea ever have dried-up, my hubby and i only may very well be with all of you connected thousands of samsara.
    wooden flower carts

  14. Hãy chọn Xôi Lạc TV ngay, khi đang muốn xem trực tiếp bất kỳ trận đấu bóng đá nào. Đảm bảo rằng tại đây, anh em có thể xem trực tiếp trận đấu mình thích với chất lượng hình ảnh lên đến Full HD, âm thanh sống động và tốc độ mượt mà. Thêm vào đó còn có trải nghiệm xem tuyệt vời nhất. 

  15. Pavzi Post is a startup founded by dedicated webmasters and bloggers who want to produce engaging material that is truthful, fascinating, and worth reading. We are more of a digital community where you can pavzi.com find various information, resources, and subjects about current events or news. With the assistance of the editorial and content teams, we supply you with the best web content on any topic imaginable.

  16. Free Trial Dating Apps: Finding Love with a Risk-Free Approach

    Free Trial Dating Apps In today’s digital age, online dating has become increasingly popular. People are turning to dating apps to meet potential partners and connect with like-minded individuals. While many dating apps require a subscription or payment plan, there is a growing trend of free trial dating apps that offer a risk-free approach to finding love.

    https://www.amolatinreviews.com/free-trial-dating-apps-finding-love-with-a-risk-free-approach

    free trial dating apps

  18.  Xôi Lạc TV chính là một trong những địa chỉ xem bóng đá được yêu thích nhất Việt Nam. Bởi chúng tôi không chỉ phát sóng bóng đá miễn phí với chất lượng cao. Mà còn cung cấp nhiều tính năng hữu ích cho mọi người sử dụng 

  25. Game Vault Casino Online: A Gaming Paradise at Your Fingertips

    Are you a passionate gamer looking for an exhilarating online casino experience? Look no further than Game Vault Casino Online! With its vast array of thrilling games, generous bonuses, and seamless user interface, Game Vault Casino Online is your ultimate destination for unparalleled gaming entertainment.

    https://www.casinositesreview.com/game-vault-casino-online-a-gaming-paradise-at-your-fingertips

    game vault casino online

  26. Enroll in the Best Training Institute in Pune for Networking, Software Development & Python Big Data Classes. Get trained by certified professionals with assured Job assistance. We provide Core and Advanced Java Training in Pune with hands on practice on live projects 100 job assistance.

  27. Hey There, I am John Smithee. There are several printing problems you could experience while using your HP Printer for the print function. The common printer issues are – Black or ink color not printing, poor print quality issues, driver installation problem, and many others. HP Support Assistant is a one-stop doorstep troubleshooting tool that serves you with all sorts of solutions to your printer problems. Thus, feel free to download and install such a fixing utility to efficiently deal with the issues with your PC or printer.

  42. Get the best Irish Assignment Help Online. Our professional team provides expert assistance, timely delivery, and customized solutions to ensure your academic success. Don’t wait, avail our services now!

  44. ❤️❤️❤️❤️❤️❤️
    برج کننده یا کولینگ تاور و کاربردهای آن در صنایع مختلف
    برج خنک کننده دستگاهی است که جهت خنک سازی آب در صنایع مختلف مورد استفاده قرار می‌گیرد. این عبارت برگرفته از واژه انگلیسی کولینگ تاور (cooling tower) است. در زبان فارسی گاهاً به این دستگاه، برج خنک کن یا خنک کننده صنعتی آب می‌گوییم. این دستگاه به دلیل کارایی و نحوه عملکرد خاص خود هر روزه به دستگاهی محبوب‌تر در میان صاحبان صنایع جهان و ایران تبدیل می‌شود. در این صفحه اینترنتی قصد داریم تا تعریف جامع و کامل از برج خنک کننده ارائه کنیم. همچنین می‌خواهیم نحوه محاسبه و طراحی، نحوه عملکرد، اجزاء و قطعات و موارد استفاده از برج خنک کن را بررسی و همراه با فیلم و عکس، به سمع و نظر شما عزیزان برسانیم.
    ❤️❤️❤️❤️❤️❤️
    https://fanofcoolingtowe3-2.farsiblog.net/Post/1/%D8%AA%D8%A7%D8%AB%DB%8C%D8%B1+%D8%AC%D9%86%D8%B3+%D9%88+%D8%AA%D8%B9%D8%AF%D8%A7%D8%AF+%D8%AA%DB%8C%D8%BA%D9%87+%D9%81%D9%86+%D8%A8%D8%B1%D8%AC+%D8%AE%D9%86%DA%A9+%DA%A9%D9%86%D9%86%D8%AF%D9%87+%D8%A8%D8%B1+%D8%B1%D9%88%DB%8C+%D8%B1%D8%A7%D9%86%D8%AF%D9%85%D8%A7%D9%86+%D8%A8%D8%B1%D8%AC+%D8%AE%D9%86%DA%A9+%DA%A9%D9%86%D9%86%D8%AF%D9%87

  48. There are a number of websites that list office for rent in Dubai. Dubai is an international business city and the financial hub of Middle East.

  49. I have been having issues with finding the best  lollipop for myself. After reading this article, my issues has come to an end. I really love the information you provided here as it has helped me a lot. merely looking at the article, i can see that it is written by a PRO. please check my article on
    메이저놀이터

Leave a Reply

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