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.

573,780 thoughts on “Department Store Industry”

  1. 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 Azure OpenAI HIPAA?

  5. Right here is the perfect webpage for anybody who wants to understand this topic. You realize a whole lot its almost hard to argue with you (not that I personally would want to…HaHa). You definitely put a fresh spin on a topic that has been discussed for ages. Great stuff, just excellent.카지노

  7. I was impressed by your writing. Your writing is impressive. I want to write like you.카지노게임사이트 I hope you can read my post and let me know what to modify. My writing is in I would like you to visit my blog.

  15. Jac Board model papers 2022 (mock exam papers) for class 12th students are available for free download in pdf format. Nice this comment and so i have a some information aboutBest Time To Visit Hong Kong this is a good time for shopping, as the city often has winter sales. The Chinese New Year usually falls within this period, bringing colorful celebrations.

  16. Mobile Premier League (MPL) has redefined mobile gaming. Whether it’s the classic strategy of Ludo, the cricket enthusiast’s dream in Fantasy Cricket, or the fast-paced card action in Rummy and Win Patti, MPL offers a diverse gaming experience. With top games that cater to both casual gamers and competitive souls, MPL has something for everyone. Dive in the mpl game now!

  17. 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. chatgpt business plan

  19. Are you looking for a solution to fix Hulu Error Code rununk13? Check out this article to fix Hulu Error Code rununk13 by clearing the cache for the Hulu app or uninstalling and reinstalling the app. For more information feel free to check out our website now!

  20. Aayushie is most trusted Chennai Escorts Provider. So If you are looking for Chennai escorts , then visit my website. We provide high profile Escort service in Chennai with full satisfaction.

  21. Additionally, it’s important to note that many agencies may require a deposit to be paid upfront before any bookings can take place. It’s also advisable to check out what other amenities the escort provides such as transportation arrangements, dinner reservations or even nightlife options if desired.

    escorts service in lahore

  23. In recent years, the popularity of THC vape products has skyrocketed, and it’s no surprise why. With the rise of medicinal and recreational cannabis use, people are constantly looking for new and innovative ways to consume cannabis. Enter the THC vape, a discreet and convenient method of enjoying the benefits of THC without the drawbacks of traditional smoking.

    https://thcvapescentralstore.co.uk/

  24. The crowd1 login provides partners with a range of products and services via crowd marketing for their affiliates.Crowd1 is a first innovative digital multi-level marketing company with a focus on long-term sustainability.

  25. ท้าทายตัวเองและมาสนุกกับ PG SLOT ได้เลย 99club พร้อมสัมผัสประสบการณ์การเล่นที่ไม่เหลือเชื่อที่จะทำให้คุณต้องคุ้นเคยและติดใจตลอดเวลา เล่นแล้วชนะ กับ PG SLOT ได้แล้ววันนี้!

  27. Discover ‘Technomantu’—the future of Instagram growth! This app is designed to boost your followers, engage with users, and transform your social media journey. Easily downloadable and incredibly user-friendly, technomantu
    is a must for every influencer or Instagram enthusiast out there.

  28. รู้จัก PG SLOT ไม่เพียงแค่เป็นเกมสล็อตออนไลน์ 99club มันเป็นโลกของความสนุกและความตื่นเต้นที่คุณควรสนใจ ไม่ว่าคุณจะเป็นคนที่ชื่นชอบการเสี่ยงโชคหรือเพิ่งเริ่มต้น ทุกคนมีโอกาสในการเข้าร่วมและเพลิดเพลินกับ PG SLOT

  31. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards, OpenAI Internship Program

  32. Sdmoviespoint 2020: SDMoviespoint is one of the best free movies, TV shows, and drama download SD Movies point websites across the world. SD Moviespoint is reported to have millions of monthly active SD Movies point users. SDMoviespoint website has a huge collection of Bollywood or Hollywood movies thousands of Punjabi, Malayalam, Pakistani, and Kannada movies. Sd movies point has a huge collection of all the latest HD Bollywood, Hollywood, and Tollywood movies, SDmoviespoint does have ample of adult or 18+ web series and TV shows.
    Sdmoviespoint 2020

  33. With youtube to mp3 converter, you can convert all your favorite YouTube videos into MP3. It is a user-friendly extension and the best part is it is free to use. So, from now onwards you can enjoy music not only online but offline also. Stream your best shows anytime and anywhere.

  35. Are you searching for the best youtube downloader mp4? then, don’t worry and install our browser extension and download Youtube videos in MP4 format and enjoy hassle-free content. This is the best extension and free to use that allows you to have your favorite shows in MP4 format.

  39. Keonhacaingon.com là trang website cung cấp thông tin về keonhacai5 chính xác, update tylekeonhacai, keonhacai1, keonhacai88, keonhacaidemnay, keonhacaiso5, keonhacaihomnay, keobongtoinay
    #keonhacai, #keonhacaingon, #keonhacai5, #keonhcaihomnay

  42. Keonhacaingon.com là trang website cung cấp thông tin về keonhacai5 chính xác, update tylekeonhacai, keonhacai1, keonhacai88, keonhacaidemnay, keonhacaiso5, keonhacaihomnay, keobongtoinay. #keonhacai, #keonhacaingon, #keonhacai5, #keonhcaihomnay – GG site: https://sites.google.com/view/keonhacaingon/

  43. E Rickshaws are eco-friendly vehicles, emitting zero pollution. By encouraging online E Rickshaw booking, we are not just simplifying commuting; we are contributing to a greener planet. Every ride taken online is a step toward reducing carbon footprints and creating a sustainable future.
    https://onlineerickshawbooking.in/

  44. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards, Openai story generator free

  45. Assignment Help Canada: Get professional online assignment help from experienced Canadian writers. We offer high-quality, custom-written assignments in a variety of subjects and academic levels. Guaranteed satisfaction!

    Here are some other keywords that you can use in your description:
    Canadian assignment help
    Research paper writing help
    Plagiarism-free work
    24/7 customer support

  46. Explore the world of delicious flavors with Flavorfultips.com. Discover mouthwatering recipes, cooking tips, and culinary inspiration for every palate.

  47. Check short paragraph on different topics along with 10 lines description and essays. Improve your knowledge with easy details now.

  49. Great post, thanks for sharing! It’s wonderful to see the dedication of services like yours in providing top-notch Canada assignment help. Education is vital, and your commitment to assisting students in their academic journey is truly commendable. Your expertise and support undoubtedly make a significant impact on their success. Keep up the excellent work, and may your services continue to empower and inspire students across Canada. If anyone is seeking assistance with their assignments, they should definitely consider reaching out to your team for the best guidance and support. Thank you for making a difference in the educational landscape! 👏📚🇨🇦

  50. Thank you for the sensible critique. Me & my neighbor were just preparing to do some research about this. We got a grab a book from our area library but I think I learned more from this post. I am very glad to see such magnificent information being shared freely out there. بيوت للايجار ابوظبي

Comments are closed.