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.

45,926 thoughts on “Department Store Industry”

  9. Thanks for a very interesting blog. What else may I get that kind of info written in such a perfect approach? I’ve a undertaking that I am simply now operating on, and I have been at the look out for such info. aniwatch

  10. Great post! Your message is spot-on. If you’re grappling with the task of writing a persuasive essay, it’s a relief to know that there’s a reliable option like Assignment Helper Online to turn to for assistance. Crafting a persuasive essay can be demanding, and having a dedicated team at your disposal can be a game-changer. Their expertise and guidance can help students overcome the challenges of persuasive writing, ensuring they produce compelling essays. It’s always reassuring to have a trusted resource for academic support, and this recommendation can be a lifeline for those seeking help with their writing assignments. Thanks for sharing this valuable tip!

  13. Preventative Care: Using quality skin care products is often seen as a form of preventative care. Women may use these products to maintain healthy skin and prevent the onset of common skin issues.

    Wellness and Self-Care: Skincare routines are viewed as a form of self-care and an opportunity to take time for oneself. High-quality products enhance the self-care experience.

  14. Investment in Long-Term Skin Health: Many women see skincare as an investment in their long-term skin health and well-being. They are willing to invest in quality products to achieve and maintain healthy skin. acid 2 B5 serum

    Confidence Boost: Clear and healthy skin can boost self-confidence and self-esteem. Great skincare products help women feel their best and most confident.

  15. Baccarat is a popular casino card game that originated in Italy during the 15th century and has since gained widespread popularity globally. It is a game of chance where players have the option to bet on either the player hand, the banker hand, or a tie. The objective of the game is to have a hand with a value closest to nine.

    โปรโมชั่น
    https://ufabaccarat800.com/promotion/

  16. An online casino is a digital platform that allows individuals to play various casino games over the internet. It provides a virtual environment similar to traditional land-based casinos, offering a wide range of games such as slots, blackjack, roulette, poker, and more.

    World Entertainment
    https://ufabaccarat800.com/world-entertainment/

  17. An online casino is a virtual platform that allows users to play various casino games over the internet. These games include slots, poker, blackjack, roulette, and more. Players can access the casino website from their computer or mobile device and interact with the games through a user-friendly interface.

    Big Gaming
    https://ufabaccarat800.com/big-gaming/

  20. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be subscribing to your feed and I hope you post again soon. Big thanks for the useful info. roothogmusic.com

  24. Positive site, where did u come up with the information on this posting? I’m pleased I discovered it though, ill be checking back soon to find out what additional posts you include. chat ai gpt

  25. PERDANA138 merupakan situs slot gacor 2023 menyediakan permainan judi online 24jam terpercaya yang menyediakan banyak Situs Slot Gacor Resmi di Indonesia. Anda tidak harus merasa repot lagi mencari situs judi lain yang belum tentu bisa memberikan kemenangan.
    Karena hanya dengan 1 akun anda sudah bisa memainkan semua jenis permainan judi 24 online terpercaya secara lengkap. Sebab kami hanya menyediakan yang terbaik untuk siapapun yang ingin bergabung Daftar Agen Judi Slot Tergacor 2023 dengan penawaran terbaik. Oleh karena itu tentunya kami juga selalu menyediakan kemungkinan menang yang lebih besar untuk anda selama memasang taruhan online uang asli.

  26. PERDANA138 merupakan link daftar situs online Slot gacor mudah menang di Indonesia yang memberikan game judi slot gacor 2023 untuk membernya. Situs slot yang mudah menang yang sudah menjadi bandar situs khusus judi slot online di Asia dengan permainan terlengkap yang di berikan oleh website PERDANA138.

  27. PERDANA138 memberikan Slot maxwin jackpot tergacor sesuai dengan tipe permainan. Semua games yang tersedia dalam 1 user ID ini memiliki promo bonus yang bisa anda pilih dan klaim. Promo yang kami sediakan untuk para member merupakan promo yang tidak banyak basa-basi. Syarat yang sangat mudah untuk dicapai oleh para player. Promo yang tersedia adalah promo REAL alias ASLI untuk semua member yang bermain. Kecepatan sistem kami dalam memproses promo ini sangatlah cepat, jadi para member judi slot online pun tidak akan merasa resah dan menunggu lama untuk mengklaim promo ini.

  28. Games Slot dana tanpa potongan 2023 adalah jenis game slot minimal deposit 25 Rb via dana yang di peruntukan bagi kamu yang ingin bermain judi slot online tanpa rekening. Melalui sistem qq slot deposit via dana 25 Rb, kini semua orang bisa dengan mudah bermain di situs judi slot online terpercaya rekomendasi PERDANA138 2023. Tidak perlu khawatir lagi untuk bermain judi khusus slot online apabila saldo di rekening bank kamu sedang kosong. Hanya dengan gunakan Aplikasi Dana untuk transfer uang ke situs slot online deposit dana 25 Rb, sangat terjangkau bagi semua kalangan penjudi Indonesia.

  30. Please let me know if you’re looking for a article writer for your site. You have some really great posts and I feel I would be a good asset. If you ever want to take some of the load off, I’d absolutely love to write some material for your blog in exchange for a link back to mine. Please send me an email if interested. Thank you 공식안전놀이터 I couldn’t think of this, but it’s amazing! I wrote several posts similar to this one, but please come and see!!

  32. It’s too bad to check your article late. I wonder what it would be if we met a little faster. I want to exchange a little more, but please visit my site casinosite and leave a message!!

  34. Pondicherry is a coastal gem, and the best time to visit Pondicherry is during the winter months, from November to February. The cool and pleasant weather makes it perfect for exploring the French Quarter and enjoying the serene beaches.

  35. Coorg’s Lush Greenery: The best time to visit Coorg is during the monsoon season, between June and September. During this period, Coorg comes alive with vibrant colors, as the rain refreshes its lush coffee plantations, earning it the nickname “Scotland of India.”

  36. From some point on, I am preparing to build my site while browsing various sites. It is now somewhat completed. If you are interested, please come to play with slotsite !!

  37. ALEXISTOGEL is known as an official and trusted Totomacau site with a minimum deposit of 100 silver.ALEXISTOGEL Here The Best Online Games dengan berbagai layanan lengkap dan winrate tertinggi mendukung Anda To Be A Winner. Go register and login for exclusive account in ALEXISTOGEL.Visit Website: https://directorymathsed.net/

  43. I came to this site with the introduction of a friend around me and I was very impressed when I found your writing. I’ll come back often after bookmarking! baccaratcommunity

  45. An online slot casino is a virtual platform that offers a wide variety of slot machine games for players to enjoy from the comfort of their own homes. These online casinos provide an extensive range of slot games with various themes, graphics, and bonus features to cater to every player’s preference.

    Mpo888 login
    https://heylink.me/agenmpo888/

  47. Cheap VPS hosting USA refers to a low-cost virtual private server hosting solution located in the United States. These VPS servers offer an affordable option for individuals and businesses seeking reliable hosting services within the USA. Despite the lower price, cheap VPS hosting USA provides adequate resources, performance, and connectivity for hosting websites, applications, or services with low-latency connections within the country.

  48. Assignment helper are professionals who offer support to students in completing academic tasks. They provide assistance with research, writing, and editing to ensure high-quality assignments. These experts are often well-versed in various subjects and can help students meet deadlines while improving their understanding of course material. Assignment helpers can be a valuable resource for students seeking to excel in their studies.

  49. “Your blog is a continuous source of encouragement and enlightenment, guiding us towards a path of positivity and thankfulness. I’m deeply grateful for the profound impact it has had on my life.”مازدا 6 2023

  50. “Your blog is a light in the digital world, and I’m truly appreciative of the uplifting content you consistently provide. It has brought a positive change to my life that I’m thankful for.”النترا 2023

Leave a Reply

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