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.

229,289 thoughts on “Department Store Industry”

  1. leather recliner sofa 4 seater
    4 Seater Leather Sofas uk

    There’s a sofa to fit every design. The Devon, for instance, is a classic sofa made of distressed leather. It will only get better with time. It’s cushioned deeply with fixed back and seat cushions which are filled with pocket springs and fibre foam.

    <b

  2. click here to investigate
    Bedside Cots For Newborns

    It is designed to be a snug fit against your mattress, this bassinet features one non-mesh panel which can be removed to make it easier to access. MFM mom home test Emily was delighted that it matched with her bed frame so she didn’t have to get up in the middle of the night to

  6. 네이버 계정 구매
    오늘날 점점 더 많은 사람들이 이 디지털 시대에 온라인 ID와 계정에 의존하고 있습니다. 한국의 온라인 환경은 네이버 계정이 지배하고 있습니다. 광범위한 사용과 다재다능함을 갖춘 네이버는 커뮤니케이션에서 콘텐츠 제작에 이르기까지 다양한 온라인 활동의 주요 소스가 되었습니다. 그 중요성이 커지면서 네이버 계정 판매는 은밀하고 번성하는 지하 시장이 되었습니다. 네이버 계정은 수요가 많기 때문에 개인은 다양한 계정을 판매하여 이 시장을 공략하고 있습니다.

    의 위험

    우선 네이버 계정을 구매하면 구매자가 사기 위험에 노출됩니다. 계정은 불법적인 수단을 통해 획득되어 개인 정보를 위험

  7. gas safe buckingham
    Gas Safe Engineers in Buckingham

    Many residential or commercial property owners work with gas safe engineers to service their boilers and to supply them with a Gas Safety Certificate. This is a legal requirement for landlords.

    About are without gas after a primary broke in Winslow. Gas d

  8. bio ethanol fireplace wall
    Include a Media Wall Bioethanol Fireplace

    A media wall with a bioethanol fireplace is an exceptional way to include a focal point to your home. They are easy to set up and do not need a flue or chimney.

    Unlike an electric fire, they produce real flames and radiat

  9. ghost 2 immobiliser cost
    How Much Is a Ghost Immobiliser Worth?

    An immobiliser is an important security measure that helps to stop hotwiring which is a common type of car theft. However, thieves are constantly adapting and evolving their methods.

    Ghost immobilisers are an effective way to stop

  10. best rated robot vacuum
    How to Keep a Robot Vacuum Clean

    Robot vacuums can help keep your floors clean. Depending on the model, they can also sweep or mop stairs.

    Look for models that include clever features, such as app control and remote access. You can use apps to schedule cleaning sess

  13. dual fuel range cookers
    Silver Dual Fuel Range Cookers

    Currys Silver dual fuel range cookers combine the energy efficiency of gas stoves with the reliability of an electric oven. Be looking for features like telescopic shelves, cast-iron pan supports wok burners, self-cleaning, pyrolytic lines.

    Creative curators will appreciate the vers

  14. bioethanol fireplace wall
    Bioethanol Wall Mounted Bio Fireplaces

    Ethanol wall mounted bio fireplaces offer a sensational centrepiece for living areas. They require no chimney, very little installation and are really simple to utilize.

    Before setting up an ethanol wall fire you need to make sure that the assista

  15. please click the following web site
    The Best Bunk Bed With Trundle

    From sliding down the slide with your friends to taking their favorite toys to the park bunk beds bring a lot of fun and adventure to children’s rooms. Our top bunk bed has low-profile options that are ideal for small spaces, and flexible configurations that can accommodate the growing children.

  18. ADHD symptoms adults male
    ADHD symptoms in women adults in Adults

    The severe ADHD symptoms in adults can be difficult to spot. It’s possible to think that they’re simply your personality traits.

    But if these traits cause problems at work or home they could be a sign of ADHD. It’s crucial to ta

  20. Link Naga95
    Disini akan dijelaskan mengenai berapa besar kemenangan yang akan dikau dapatkan pada Judi Slot Terbaik, Judi Slot Unggul ini bisa sering kalian bilang untuk susah dimenangkan. Tetapi kalau anda memboyong permainan itu anda dengan mendapatkan taruhan bola anda beserta berkali-kali lipat dari bandar yang anda letakkan.

    Bisa di bilang Betting Slot Terbaik ini ialah permainan dimana kita hanya harus berbuat

  21. Customised corporate gifts
    Christmas is of which the most anticipated event for young people and elders can revelation them together with distinctive expectations. The particular December month is outlying looked forward to, as it may certainly be a 30 days committed to two necessary celebrations for example Christmas and Beginning of the year. Christmas in reality sets the stage for carousing and even commencing from the last w

  24. treatment of add
    ADHD Treatment For Adults

    ADHD symptoms can affect relationships, school and work. There are a variety of treatments available.

    The use of medications can greatly reduce the symptoms of ADHD. Long-acting stimulant medication provides once-a-day doses that boost compliance while reducing the adverse effects.
    <

  28. you can try these out
    The Best Value Dual Fuel Range Cooker

    A dual fuel range cooker to your home is an excellent option to improve the kitchen and increase the value. It’s important to know the costs so you can make a sound choice.

    This dual fuel range cook has both a gas stove and an electric oven. It offers yo

  29. https://plumbers-clerkenwell.co.uk
    Best 5 Boiler Repair Companies locally: A THOROUGH Review 1. Fast and Dependable Heating system Solutions When it comes to finding the greatest boiler repair company in your area, Fast and Reliable Heating Solutions stands mind and shoulder blades above the competition. With their group of highly competent technicians and commitment to top-quality assistance, they have earned the trust of countless happy custome

  32. 4 seat leather reclining sofa
    4 Seater Black Leather Sofa

    There’s a lot to consider when shopping for a 4 seater leather sofa in black. You’ll need to choose one that is stylish and comfortable as well as has an enduring frame.

    This West Elm couch is a great value and is extremely versatile. It is stylish and is inc

  35. additional resources
    French Bulldog Puppies

    Frenchies are a playful breed that makes great companions. However, they are susceptible to many health conditions that can be expensive to treat. Pet insurance is recommended to help with the expenses that are associated with these conditions.

    Frenchies require moderate exercise and don’t require a lot of

  36. Recommended Website
    Pallet Wood For Sale

    Stores that bring in large-sized items often ship their items on wooden pallets. If you know where to look, they may offer you some of the wood for no cost or at a set price.

    Small-scale businesses, on the other hand, typically do not have a method to dispos

  37. Sacabambaspis Gift
    They point out it relaxes and soothes while sleeping, providing the present of sleep and tranquility that’s priceless for any mother or father. Some say it’s nice even for adults to listen to. At CustomPlushMaker, we provide a pleasant vary of cute and high-quality plush toys. Specializing in crafting premium plush toys, plush animals, and cloth child toys, our cor

  39. ethanol fireplace wall
    Wall Hung Bioethanol Fires

    Wall hung bioethanol fires offer the chance to take pleasure in real flames and warmth with little or no building and construction or setup involved. They are also easy to operate.

    Ethanol wall fireplaces can be recessed into walls, nevertheless the product in which

  40. COOPERL ARC ATLANTIC
    If you’re looking to buy premium-grade pork in large quantities from an experienced manufacturer, Cooperl Arc Atlantique is your top choice. As one of France’s most respected pork suppliers, Cooperl offers a comprehensive range of cuts for wholesale purchase, including pork leg, back ribs, ham, and more to meet the demands of businesses worldwide.

    Why Choose ?

    For over

  41. https://nagano-tonic-reviews.shop/
    ✔️Nagano Tonic Official Website: 🔥 🔥

    In a society by having a top feeling of health today, many individuals want to have fat that is perfect healthy systems.Facing a wide range of weight-loss items, Nagano Tonic, being an revolutionary option, quickly became a common item inside the hearts of customers along side its unique formula and excellent impacts.

  42. bedside crib co sleeper
    Bedside Crib and Cot

    A bedside crib or cot may be easily accessed for night feedings and soothing. The majority of cribs can be adjusted in height, and a firm mattress that is smooth and breathable. This will allow your baby to sleep safely and soundly.

  43. giấy dán tường xavia Hàn Quốc
    Tuy nhiên nhằm tạo tạo điểm vượt trội quý khách cần kết hợp hài hòa và hợp lý với các nội thất cũng như với màu sắc của chúng. Sản phẩm Giấy Dán Tường Xavia là thành quả của vượt trình phát triển trên Hàn Quốc, nơi nổi giờ với chất lượng và sự tinh xảo vào thiết kế đồ đạc trong nhà. Việc đảm bảo nguyên đai nguyên khiếu nại mang lại sản phẩm hóa h

  44. https://cooperlarcatlantique.com
    For buyers across Europe in search of superior frozen pork products, Cooperl Arc Atlantique is a name you can trust. COOPERL, a leading pork producer based in France, offers top-tier pork cuts sourced from carefully raised pigs. Whether you are looking for pasture-raised pork, hormone-free pork, or farm-raised, sustainable pork products, we provide a selection that fits every culinary need.

  47. treatment of add
    ADHD Goes Undiagnosed and Untreated in Adults

    For adults who are not treated, ADHD can lead to various issues. These include chronic lateness, trouble staying organized and impulsive behaviors. It can also cause poor relationships and job instabilities.

    Fortunately, there are ways to address the

  49. bedside travel crib
    Choosing Between a Baby Bedside Co Sleeper and a Bassinet

    New parents have a variety of options when it comes to baby sleep. Some consider co-sleeping (which the AAP advises against due to suffocation risks) Others prefer the convenience of having their infant at arm’s reach for middle-of-the-night diaper changes

  50. SEOHERO
    For example, if your company aims to attract a new, sustainability-driven target audience, that might prove too expensive if ad copy about business sustainability has a low conversion rate. Customer acquisition cost (CAC) is a marketing KPI that calculates the total expense incurred to acquire a new customer. You calculate it by dividing the sum of all marketing and sales

Leave a Reply

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