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.

282,238 thoughts on “Department Store Industry”

  2. Do you require assistance with your assignment? Yes, our company provides Assignment Help with an unlimited number of free revisions, which will assist you in a variety of ways. You can have your paper revised by your professors’ instructions. And do you know what the finest part is? These modifications are provided at no cost. Yes, there are no fees if you request that the company change your papers.

  3. Thanks for sharing nice information with us. i like your post and all you share with us is uptodate and quite informative, i would like to bookmark the page so i can come here again to read you, as you have done a wonderful job. How to Use Chat OpenAI

  10. I’ve been using WordPress on a number of websites for about a year and am worried about switching to another platform. I have heard good things about 먹튀검증사이트. Is there a way I can transfer all my wordpress content into it? Any help would be really appreciated!

  13. Craxy Ninja is a professional digital marketing agency. We develop state-of-the-art and effective digital marketing strategies to get you more business.

    Redefine digital marketing with Craxy Ninja. Unleash the power. Dominate with precision!

    https://www.craxyninja.com/

  14. Experience a seamless journey with your Linksys Velop Whole Home Mesh Wi-Fi system through Assist for Linksys Velop Linksys Velop AX4200 Setup . Whether it’s initial setup, resolving issues, or fine-tuning your network, our dedicated team of experts is readily available to offer you tailored solutions and step-by-step guidance. Our commitment to customer satisfaction means we’re here to empower all users, regardless of their tech expertise, to unlock the full potential of their mesh Wi-Fi network, resulting in a more reliable, faster, and smoother home network experience.

  16. What are you doing, brother? I can’t believe how much wonderful information you’ve shared, and I’ve read it three times. As a professional writer, I also offer humanities assignment help, so please visit my website in the meantime.

  17. Assist for Linksys Velop is a user-friendly support service dedicated to enhancing your Linksys Velop Linksys Velop AC6600 Setup Whole Home Mesh Wi-Fi system experience. Whether you’re setting up, troubleshooting, or optimizing your network, our expert team is here to provide step-by-step guidance and personalized solutions. With a focus on customer satisfaction, we aim to empower users, whether tech-savvy or not, to maximize their mesh Wi-Fi network’s performance, ensuring a smoother, faster, and more reliable home network experience.

  18. A shredding machine is a device used to cut paper or other materials into small pieces or strips. It is primarily used for disposing of sensitive or confidential documents in a secure manner, ensuring that the information cannot be easily accessed or reconstructed.

    自走式　移動式　中古
    https://kenkikan.net/

  20. ankara diş hekimi , Türkiye’nin başkenti olarak sağlık sektöründe önemli bir merkezdir ve diş sağlığı alanında da birçok deneyimli diş hekimi bulunmaktadır. Ankara’da diş hekimleri, modern teknolojileri ve güncel tedavi yöntemlerini kullanarak hastalarının ağız ve diş sağlığını korumak için çaba harcarlar. Diş sağlığına verilen önem, Ankara’daki diş hekimlerinin profesyonellikleri ve hasta memnuniyetine odaklanmalarıyla birleşerek, şehirdeki diş tedavisi hizmetlerini yüksek bir standarta taşır.

  25. I discovered your blog site on google and check just a few of your early posts. Proceed to maintain up the excellent operate. I just extra up your RSS feed to my MSN Information Reader. Seeking forward to reading more from you in a while!… escort girls

  27. Hi, i think that i noticed you visited my web site thus i came to °ßgo back the favor°®.I am attempting to to find things to improve my site!I suppose its adequate to use a few of your ideas!! sex dating

  28. restoratif diş tedavisi , Restoratif diş tedavisi, dişlerin hasar gördüğü veya kaybedildiği durumlarda kullanılan bir tedavi yöntemidir. Bu tedavi, çürük, kırık, aşındırma veya diş eksikliği gibi sorunları düzeltmek ve ağız içinde estetik ve fonksiyonel bir denge sağlamak için kullanılır. Restoratif diş tedavisi, dolgular, kaplamalar, köprüler ve implantlar gibi çeşitli yöntemleri içerir. Bu tedavi sayesinde hastalar, doğal diş görünümünü ve fonksiyonunu yeniden kazanabilirler. Restoratif diş tedavisi, diş hekimlerinin hastalarının ağız sağlığını yeniden inşa etmelerine ve gülümsemelerini iyileştirmelerine yardımcı olur.

  30. high quality designer replica handbags of various brands Despite the fact that louis vuitton has manufactured a lot of duffle bags throughout the years, this one stands out. It first appeared in the Pre-Fall 2020 collection and has since become one of louis vuitton multi pochette most popular handbag launches! If you appreciate dependability, durability, and good aesthetics, you will fall in love with this bag right away. lv bags outlet!

  31. A car seat cover is a protective covering that is placed over the seats of a vehicle. It is designed to help protect the original upholstery from everyday wear and tear, spills, stains, dirt, and other elements that can cause damage or deterioration.

    車 シートカバー
    https://myst-shop.jp

  32. Many people struggle with saving money, despite being intelligent. This issue results from a failure to see the value of learning money-saving strategies and finding the greatest deals. Additionally, we are fully informed with the question, Has Lily Tomlin Had Plastic Surgery? perhaps a fitness-related update like whether the infinity hoop is effective? You can get everything in one place. teledoc promo code!

  33. One of the top cloud-based ERP Systems, Microsoft Dynamics Business Central, is implemented by our team of Microsoft Dynamics 365 Business Central partners. We also have experience moving your currently installed Microsoft Dynamics ERP System, such as GP, NAV, or AXE, to the cloud. Our team of specialists has experience with the lift and shift migration technique. microsoft dynamics ax partner in uae!

  34. A luxuriously pricey designer handbag is not something that every woman can afford. If you can’t afford to purchase authentic designer handbags, why not choose for reasonably priced imitation bags that seem exactly like their original product? Replica bags provide several benefits for people who like the finer things in life but do not have large budgets. Replica designer bags are imitations of practically every designer brand that closely resemble designer handbags but are made from less expensive materials, thus their lower cost. oh my handbags!

  35. A luxuriously pricey designer handbag is not something that every woman can afford. If you can’t afford to purchase authentic designer handbags, why not choose for reasonably priced imitation bags that seem exactly like their original product? Replica bags provide several benefits for people who like the finer things in life but do not have large budgets. Replica designer bags are imitations of practically every designer brand that closely resemble designer handbags but are made from less expensive materials, thus their lower cost. oh my handbags!

  36. A luxuriously pricey designer handbag is not something that every woman can afford. If you can’t afford to purchase authentic designer handbags, why not choose for reasonably priced imitation bags that seem exactly like their original product? Replica bags provide several benefits for people who like the finer things in life but do not have large budgets. Replica designer bags are imitations of practically every designer brand that closely resemble designer handbags but are made from less expensive materials, thus their lower cost.

  37. A luxuriously pricey designer handbag is not something that every woman can afford. If you can’t afford to purchase authentic designer handbags, why not choose for reasonably priced imitation bags that seem exactly like their original product? Replica bags provide several benefits for people who like the finer things in life but do not have large budgets. Replica designer bags are imitations of practically every designer brand that closely resemble designer handbags but are made from less expensive materials, thus their lower cost. oh my handbags!

  38. Not every lady has the means to purchase an extravagantly expensive designer handbag. Why not choose for reasonably cost replica designer handbags that seem just like the real thing if you can’t afford to buy legitimate ones? People who enjoy the finest things in life but do not have vast budgets might profit from replica bags in a number of ways. The term “replica designer bags” refers to imitations of nearly all designer brands that closely resemble designer handbags but are constructed from less expensive materials, resulting in a lower price. ohmyhandbags!

  39. Car accessories are additional components or features that can be added to a vehicle to enhance its functionality, appearance, or convenience. These accessories come in various types, including interior, exterior, electronic, and performance accessories.

    optioncar.ir
    https://optioncar.ir

  40. Thanks for sharing nice information with us. i like your post and all you share with us is uptodate and quite informative, i would like to bookmark the page so i can come here again to read you, as you have done a wonderful job. join the OpenAI Community Forum

Leave a Reply

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