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.

45,568 thoughts on “Department Store Industry”

  1. Hi88 – Siêu khủng long của giới cá cược Việt Nam lẫn quốc tế, cùng nhiều trò giải trí đỉnh cao.

  2. If you looking for a live TV channel service in the UK, I suggest you use IPTV UK, good quality, and 10/10 customer service. I’m using the best IPTV provider in the UK.

  3. I’m going to read this. I’ll be sure to come back. thanks for sharing. and also This article gives the light in which we can observe the reality. this is very nice one and gives indepth information. thanks for this nice article… situs slot online

  4. Nhà cái 789win minh bạch về tính pháp lý, có kho trò chơi đa dạng, tỷ lệ thưởng xanh chín cùng nhiều ưu đãi hấp dẫn. Hãy tham gia ngay hôm nay!!!

  5. I have a review for live TV channels and cable services UK. IPTV UK is the best IPTV service provider in the UK with more than 20,000 plus channels worldwide and many more. I have tried last year. I’m so impressed. You can also try this service.

  6. 888B là nhà cái có nguồn gốc hợp pháp với hơn 10 năm hoạt động trên thị trường, cung cấp đa dạng sản phẩm hấp dẫn, thu hút thành viên tham gia.
    #888b #nhacai888b #888bcasino #888bcommunity

  8. Airplane Service equipment helps to keep aircraft running smoothly and your passengers and employees safe. This guide will highlight the various types of aircraft servicing equipment available from Tronair, from lavatory system equipment to oxygen servicing units.

  9. Nhà cái 789win minh bạch về tính pháp lý, có kho trò chơi đa dạng, tỷ lệ thưởng xanh chín cùng nhiều ưu đãi hấp dẫn. 

  10. Rikvip là nhà cái được ủy quyền và giám sát bởi Công ty Cổ phần Giải trí và Nghỉ dưỡng First Cagayan.
    #rikvip #rikvipcasino #nhacairikvip #rikvipokvipcom
     

  13. Typhu88 là sân chơi cá cược uy tín, xứng đáng trở thành điểm đến lý tưởng cho bet thủ.
    Hashtags :#typhu88 #typhu88casino #nhacaityphu88 #typhu88okvipcom 

  14. Pediatric Dentistry is dedicated to providing comprehensive oral healthcare for children, spanning from infancy to adolescence. Emphasizing preventive strategies, timely interventions, and cultivating positive dental encounters, pediatric dentists play a crucial role in nurturing healthy smiles and instilling a lasting dedication to oral hygiene in their young patients

  15. A wedding present is a gift given to a couple to celebrate their marriage. It is typically given by family, friends, or guests attending the wedding. Wedding presents can vary greatly in size, value, and significance, ranging from traditional items like cookware and home appliances to more personal and sentimental gifts such as custom artwork or jewelry.

    結婚式　両親プレゼント　変わり種
    https://sanrentokei.com

  16. Rikvip là nhà cái được ủy quyền và giám sát bởi Công ty Cổ phần Giải trí và Nghỉ dưỡng First Cagayan.
    #rikvip #rikvipcasino #nhacairikvip #rikvipokvipcom

  19. Discover a world of possibilities with our Candle Molds and Candle Making Supplies. Craft stunning candles with premium materials and unique designs. Illuminate your space with the art of candle making! 🕯️✨

  20. Indulge in luxury with Obsesie’s S925 Sterling Silver Jewelry. Explore timeless elegance and elevate your style with our exquisite collection. Crafted for those who appreciate the finer things. Adorn yourself in brilliance! 💍✨
    Obsesie Jewelry

  22. Pediatric Dentistry caters to the oral health needs of children from infancy to adolescence. Emphasizing preventive care and early intervention, this dental specialty aims to foster positive dental experiences for young patients. Pediatric dentists play a vital role in instilling lifelong oral hygiene habits and addressing developmental dental concerns in children.

  24. Aims to combat hoaxes, extremism, and identity politics in the digital era.
    Through digital culture and critical thinking, they facilitate communication
    across ethnic, religious, racial, and interfaith lines. duta sulut aman

  31. Appian is a low-code automation platform that enables businesses to build applications quickly and with minimal coding. If you’re looking for Appian training basics, here’s a fundamental overview:

    1. Introduction to Appian:
    Understand the core concepts of Appian as a low-code development platform.
    Learn about the benefits of using Appian for business process automation.
    2. Installation and Setup:
    Install the Appian environment on your local machine for practice.
    Explore the Appian Designer interface and understand the various components.
    3. Data Types and Objects:
    Learn about the different data types and objects used in Appian, such as records, data types, and constants.
    Understand how to create and manage data objects for your applications.
    4. Designing Forms:
    Explore the process of creating forms using Appian.
    Understand form controls, layouts, and styling options.
    Learn how to connect forms with data objects.
    5. Process Modeling:
    Dive into process modeling, which involves defining and automating business processes.
    Understand the concept of process models, activities, and gateways.
    Explore how to use Appian to design workflows that meet business requirements.
    6. Business Rules:
    Learn about creating business rules to encapsulate decision logic.
    Understand how to integrate business rules into your Appian applications.
    7. Interfaces and Reports:
    Explore building interfaces for end-users using Appian.
    Learn how to design reports and dashboards to present data effectively.
    8. Security and Permissions:
    Understand the security features in Appian, including user authentication and authorization.
    Learn how to manage access permissions for different user roles.
    9. Integration:
    Explore how to integrate Appian with external systems and services.
    Learn about connectors and integration plugins available in Appian.
    10. Testing and Debugging:
    Learn testing strategies for Appian applications.
    Understand how to debug and troubleshoot common issues.
    11. Deployment:
    Explore the process of deploying Appian applications to different environments.
    Understand best practices for version control and deployment strategies.
    12. Best Practices:
    Learn best practices for designing efficient and scalable Appian applications.
    Understand considerations for performance optimization.
    13. Advanced Topics (Optional):
    Depending on your needs, explore advanced topics such as Appian RPA (Robotic Process Automation), Appian Sites, and Mobile App Development.
    Additional Resources:
    Take advantage of online documentation, forums, and community resources provided by Appian.
    Consider participating in Appian community events and training programs.
    Remember that Appian’s low-code approach makes it accessible to a wide audience, and continuous learning and exploration of its features will enhance your proficiency in building robust business applications.

    https://codingpromasters.com/appian-training-in-hyderabad/

  33. Order online and get FLOWERS
    from Proflowers. Shop our wide range of flower arrangements for same day delivery. 7-day freshness guarantee.

  34. Custom Faucet Manufacturer | Wholesale Supplier From China

    NICEMOCO has been a China-based faucet supplier since 2005. We supply top-quality water faucets to both commercial and residential customers around the world.

    Choose from traditional chrome-plated faucets, contemporary brushed nickel designs, or elegant gold-finished models. Our products are made with the latest technology and undergo rigorous testing to ensure they meet our high standards.

    We can custom faucets that cater to your specific needs, whether you need a commercial or residential water mixer. In the last 17 years, we severed many brand companies, like Walmart, RONA, TOTO, SODIMAC, and MAXEDA. If you want to wholesale faucet from China, Nicemoco is your good partner. “Faucet manufacturer”

    Faucet supplier, Faucet manufacturer, Faucet wholesale

  36. Dedicated to the oral well-being of children from infancy to adolescence. Pediatric Dentistry involves specialized practitioners who undergo extensive training to cater to the distinctive requirements of young patients. With a focus on preventive care, these professionals advise parents on optimal oral hygiene practices and closely monitor dental development, ensuring early intervention for a lifetime of smiles and enhanced overall well-being.

  37. includes popular tools such as Word, Excel, hotmail, Outlook, and OneNote, as well as other applications like Teams, SharePoint, and OneDrive.One of the key benefits of Office 365 is that it is accessible from anywhere, at any time, as long as you have an internet connection. This makes it ideal for remote working, as users can access their files and collaborate with colleagues from different locations.

  38. Sky88 được nhiều game thủ đánh giá là sự lựa chọn chân ái khi tìm địa chỉ cá cược trực tuyến. Sân chơi luôn đầu tư mạnh về kho game và dịch vụ liên quan.
    #sky88 #sky88casino #nhacaisky88 #sky889vip

  42. Pediatric Dentistryfocuses on oral health care for children, addressing their unique dental needs and promoting lifelong habits. Specialized practitioners provide preventive and therapeutic services in a child-friendly environment.

  45. Struggling to launch your brand?
    Techzy Studio is a leading digital marketing agency based in Surat , Gujarat. Our proven social media strategies and SEO strategies have shown the insightfull results in recent time.

    We also work with international clients from various countries including U.S.A , Canada , U.K , Japan , etc.

  46. Kể từ khi ra mắt vào năm 2015, Sky88 đã nhanh chóng trở thành một cái tên đáng chú ý trong lĩnh vực cá cược trực tuyến. Được biết đến với sự cam kết về chất lượng và dịch vụ, Sky88 không chỉ cung cấp trải nghiệm giải trí hấp dẫn mà còn đảm bảo một môi trường cá cược an toàn và công bằng.

  48. I’ve been browsing online for more than three hours today, yet I haven’t come across any engaging article like yours. It is delightful and appreciated by me. Now, if all website owners and bloggers produced excellent content like you did, the internet could be even more valuable than ever before. Check out briansclub for more.

  49. Thanks for sharing amazing post. Is your refrigerator giving you the cold shoulder? Don’t let a malfunctioning fridge spoil your day – trust the professionals at Refrigerator Repair Overland Park Ks to bring the chill back into your kitchen!

    Don’t let a malfunctioning refrigerator spoil your groceries or disrupt your daily routine. Call Overland Park Appliance Repair today for fast, reliable, and professional refrigerator repair services in Overland Park, KS.

  50. An online slot casino is a virtual gambling platform that offers a wide variety of slot machine games for players to enjoy. Players can access these casinos from anywhere with an internet connection and can play their favorite slot games from the comfort of their own homes.

    Pasarbola
    https://pasarbola.asia

Leave a Reply

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