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.

30,235 thoughts on “Department Store Industry”

  1. I’m really glad I have found this information. Today bloggers publish only about gossips and internet and this is actually frustrating. A good web site with exciting content, this is what I need. Thanks for keeping this web site, I’ll be visiting it.
    비아그라구매

  5. Pay4d Slot sebagai satu diantaranya pilihan situs slot gacor dan terpercaya di Indonesia dan menwarkan permainan tidak ada kesusahan. Player dapat meng ikutinya taruhan judi slot gacor dengan kami lewat proses dan ketentuan bermain yang gampang untuk dikenal. Di sini kami tawarkan pilihan proses transaksi usaha yang lumayan banyak dan lengkap sampai dapat ditetapkan sesuai sama kemauan. Misalkan kamu dapat lakukan proses deposit dengan memakai rekening bank lokal dan lain-lain. Dari Banyaknya pilihan deposit situs Palladium4D terdapat kami tawarkan pilihan transaksi usaha tidak ada biaya admin atau ongkos transfer deposit.

  7. Untuk new member tutorial terpenting adalah teratur latihan menggunakan akun demo slot gacor yang dipersiapkan situs slot online terkini PALLADIUM4D. Anda tidak mungkin sukses dalam hal apa pun pada eksperimen pertama, sering latihan dan dapatkan pola link slot gacor hari ini memberi hasil terbaik. Tidak ingin kehilangan uang saat penilaian? Itu kelebihan gunakan akun demo slot gacor maxwin terpercaya.

  8. Untuk new member tutorial terpenting adalah teratur latihan menggunakan akun demo slot gacor yang dipersiapkan situs slot online terkini PALLADIUM4D. Anda tidak mungkin sukses dalam hal apa pun pada eksperimen pertama, sering latihan dan dapatkan pola link slot gacor hari ini memberi hasil terbaik. Tidak ingin kehilangan uang saat penilaian? Itu kelebihan gunakan akun demo slot gacor maxwin terpercaya….

  13. This is a lovely and helpful post. In my opinion, the article provides useful information for readers. Thank you so much for sharing this, I really appreciate it. You can also play new games in retro bowl unblocked.

  14. https://sattamatkaa.co.com/panel-chart/sridevi-day-panel-chart/1
    sridevi day chart
    sridevi day
    sridevi day panel chart
    sridevi chart day
    The Sridevi Day Chart focuses on the results of the Sridevi Day market, which operates during the daytime. This chart provides an overview of past winning numbers specific to this market. By studying the Sridevi Day Chart, you can identify patterns and trends, helping you make better predictions and improve your performance in this market.

  16. Android games are video games that are specifically designed for mobile devices running on the Android operating system. These games can be downloaded and played on smartphones and tablets, allowing users to enjoy entertainment on the go.

    Apkrabi.com
    https://apkrabi.com/

  17. “Discover the Ultimate Vaping Experience! 🔥🌬️ If you’re looking to elevate your vaping journey to new heights, look no further. Our vape niche website is your one-stop destination for expert insights, trending products, and invaluable tips on all things vape. Whether you’re a seasoned vaper or just starting, our in-depth articles and reviews will guide you toward making informed choices. Join the vaping community and unlock a world of flavor, technology, and satisfaction. Explore now at https://vaperdubai.com/ and vape with confidence!”

  19. The United Airlines Aruba Office serves as a pivotal hub for travelers seeking efficient and comprehensive services related to United Airlines in the stunning Caribbean destination of Aruba. Nestled amidst the azure waters and pristine beaches of Aruba, this office symbolizes a gateway to seamless air travel, providing passengers with a direct link to one of the world’s renowned airlines.

  20. At Joker, we offer a wide range of exciting products, from slot, roulette, table and card games for you to enjoy and discover countless fun and rewarding moments. Joker Online is known over the world for its user-friendly interface and stylish games, as well as customer service which surely will satisfy your needs and great promotions you’ll enjoy. Our games are designed to meet the customers’ diverse gaming habits and constantly updating ourselves to satisfy the cultural needs of our growing global membership.
    joker gaming slot

  21. Sports betting refers to the act of predicting sports outcomes and placing a wager on the result. It is a popular form of gambling where individuals can bet on various sporting events, such as football, basketball, soccer, cricket, and more. Betting can be done through various methods, including online platforms, bookmakers, or in-person at sportsbooks.

    ทางเข้า betway
    https://betway365th.com/คาสิโนเว็บตรงbetway

  22. Research and produce key components of SEO deliverables: keyword research and mapping, link research and acquisition, technical analyses, competitive analyses, content analysis, taxonomy analysis, auditing and pointing 301 redirects and backlinks, reporting and insights. Meer SEO

  24. Herbal Treatment for Polycystic Kidney Disease controls the root of the problem that lead to the kidney damage. Polycystic Kidney Disease Herbal Treatment which can put a control over the symptoms. Herbal Care Products offers “POLCICAL” an herbal product which can treat the disease successfully without causing any possible side effects. Herbal product for Polycystic Kidney Disease which is prepared by 100% natural ingredients. It is completely saved to use and free from any kind of harmful chemicals.

  25. A logging company is a business that is engaged in the harvesting and processing of timber from forests. They typically specialize in cutting down trees, transporting them to a milling facility, and then converting the logs into various wood products.

    伐採 沖縄
    https://nahazoen.com/

  28. In the event that you are searching for a call girls in lahore
    who is very much associated and knows whoever might be seem appropriate, then, at that point, you will need to search for a socialite.

  33. In the fast-paced world of e-commerce and online shopping, the phrase “out for delivery” holds immense significance. It’s the moment when your eagerly anticipated package transitions from the warehouse shelves to your doorstep. But beyond the excitement, what does “out for delivery meaning in hindi” really mean? Let’s dive into the details and uncover the journey your parcel embarks upon before it reaches your hands.

  36. Keuntungan menjadi prioritas utama dalam perjudian slot online untuk semua penggemar UGSLOT di Indonesia. Jadi, pemain bisa dengan mudah mendapatkan keuntungan dari permainan slot dengan berbagai cara salah satunya dengan mendaftar pada agen judi slot online resmi dan terpercaya pada tahun ini. Mendaftar pada agen judi pragmatis online terpercaya adalah pilihan yang tepat. Membicarakan hal ini karena tidak hanya pemain yang bisa dengan mudah merasakan kepuasan bermain slot, namun mereka juga mendapatkan banyak keuntungan lain yang biasanya sulit didapatkan dengan mendaftar ke agen judi lainnya.

  37. “Explore the depths of the human mind and behavior through a collection of psychology books in Hindi. These literary treasures open up a world of understanding, offering insights into emotions, cognition, relationships, and more. Whether you’re a psychology enthusiast or a student seeking knowledge, these books provide a valuable resource to delve into psychological theories, therapies, and case studies, all in the rich and accessible medium of the Hindi language. Discover the works of renowned psychologists, unravel the mysteries of the psyche, and gain a profound awareness of what makes us human – all through the pages of psychology books in Hindi.”

  39. Keuntungan menjadi prioritas utama dalam perjudian slot online untuk semua penggemar UGSLOT di Indonesia. Jadi, pemain bisa dengan mudah mendapatkan keuntungan dari permainan slot dengan berbagai cara salah satunya dengan mendaftar pada agen judi slot online resmi dan terpercaya pada tahun ini. Mendaftar pada agen judi pragmatis online terpercaya adalah pilihan yang tepat. Membicarakan hal ini karena tidak hanya pemain yang bisa dengan mudah merasakan kepuasan bermain slot, namun mereka juga mendapatkan banyak keuntungan lain yang biasanya sulit didapatkan dengan mendaftar ke agen judi lainnya….

  40. Jangan lewatkan kesempatan untuk memenangkan jackpot besar dengan bermain slot!

Leave a Reply

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