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.

31,660 thoughts on “Department Store Industry”

  3. Khám phá với 33WIN – nền tảng cá cược uy tín và đa dạng, nổi bật với sự độc đáo và chất lượng dịch vụ. 33WIN là điểm đến lý tưởng cho những ai đam mê thử vận may và trải nghiệm các trò chơi hấp dẫn.

  4. In the realm of home improvement, where functionality meets style, it’s crucial to have a go-to resource for reliable reviews. That’s why I’m excited to share my website, 10thing, which is dedicated to providing in-depth reviews on various home improvement products. I personally curate and share insights on items that can enhance your living space, making it not just a house but a home tailored to your preferences.

  5. HB88 là một trong những nhà cung cấp trò chơi trực tuyến hàng đầu và có tầm ảnh hưởng nhất trong ngành giải trí trực tuyến hiện nay.

  8. Lahore, the cultural capital of Pakistan, is a vibrant and bustling city with a rich history and a diverse population. As one of the largest cities in the country, Call girl service Lahore is a hub for business, commerce, and entertainment. With such a bustling and dynamic environment, it’s no surprise that the city also has a thriving escort industry.

  9. The Business Accounting and Taxation course offered by AccountingMastery provides comprehensive training in financial management, accounting principles, and taxation regulations. Participants gain practical skills in bookkeeping, financial analysis, and tax planning, enabling them to navigate complex financial landscapes with confidence. Whether for individuals seeking career advancement or businesses aiming to enhance their financial operations, this course equips learners with essential knowledge and expertise in accounting and taxation practices.
    Business Accounting and Taxation Course in Hyderabad

  10. Discover your ideal apartment rental effortlessly with Tripalink. As a leading rental agency near you, we specialize in offering top-notch student apartments designed for your comfort and convenience. Whether you’re searching for USC housing, UCI housing, or UW housing, we have a wide range of options to suit your needs. Our intuitive platform makes it simple to browse and secure your dream apartment hassle-free. Say goodbye to the complexities of apartment hunting and let Tripalink simplify your search for the perfect home away from home.

  12. Unlock the complexities of Goods and Services Tax (GST) with Accounting Mastery’s comprehensive course. From understanding the fundamentals to navigating intricate regulations, our expert-led program equips you with the knowledge and skills to confidently manage GST compliance and optimization in your business operations
    GST Course in Hyderabad

  13. Mostbet, futboldan tenise ve basketbola kadar çok çeşitli spor dallarına bahis yapmak için çok çeşitli spor etkinlikleri sunan popüler bir bahisçidir. Güvenilirliği, rahatlığı ve yüksek hizmet seviyesi, Mostbet’i çevrimiçi bahis pazarında liderlerden biri yapmaktadır. Bağlantıyı takip et ve karlı bonusu al: https://impartialdebacau.ro/

  14. Unlock the potential of Machine Learning with Brolly Ai’s comprehensive course! Delve into cutting-edge techniques and hands-on experiences to master the art of building intelligent algorithms. Elevate your skills and stay ahead in the ever-evolving world of technology with Brolly Ai’s expert-led Machine Learning course.
    Machine Learning Classes in Hydeabad

  15. كود خصم اي هيرب 50% الرمز (HAD3514) كوبون خصم iherb قوي في 2024

    تريد كود خصم اي هيرب 2024قوي لاضافته في iherb السعودية لاول طلب؟ يوفر لك موقع الكوبون القوي الرمز الترويجي اي هيرب جديد :HAD3514 لتخفيض من 30% الى 50% على طلبك من : المكملات الغذائية، الفيتامينات،عسل مانوكا، كريم يوسيرين، غسول بانوكسيل……

    لعملاء ايهيرب ا لعربي الاصلي الجدد ،بعد التسجيل ومن أجل الخصم على الطلب الأول ، يعتبر كود الخصم من powerfulcoupon.com افضل كود خصم ايهيرب قوي لاول طلب حاليا جديد وفعال ، وهو الموقع الأكثرمصداقية لمشاهدة أحدث العروض والخصومات الخاصة بمتجر اي هيرب في 2023/2024 .

  16. “Unlock the power of Python with Brolly Ai’s comprehensive course! Dive into the world of programming with our expert-led Python course, designed for beginners and seasoned developers alike. Master the language that drives innovation in AI, data science, and web development. Elevate your skills with Brolly Ai and embark on a journey of coding excellence!”Python For AI

  17. Unlock the complexities of Goods and Services Tax (GST) with Accounting Mastery’s comprehensive course. From understanding the fundamentals to navigating intricate regulations, our expert-led program equips you with the knowledge and skills to confidently manage GST compliance and optimization in your business operations.
    GST Course in Hyderabad

  18. Unlock the power of efficient accounting with Accounting Mastery’s Tally course. Dive into comprehensive training led by industry experts to master Tally, the leading accounting software. Whether you’re a beginner or looking to enhance your skills, our course equips you with the knowledge and practical experience to streamline financial management processes effectively. Join us today and elevate your accounting expertise with Tally.
    Tally Classes in Hyderabad

  19. Brolly Ai provides a comprehensive Python course, equipping learners with essential programming skills. With a focus on practical application, the course empowers individuals to write efficient Python code. Explore Brolly Ai for a hands-on learning experience in mastering Python for various applications.Python For AI

  20. Brolly AI’s innovative course on Prompt Engineering empowers learners to master the art of crafting effective and precise instructions for AI models. By honing skills in prompt design, participants gain the ability to optimize model outputs and enhance AI performance. This comprehensive program from Brolly AI opens doors to a new frontier in AI interaction and understanding, providing invaluable insights into the nuances of shaping AI behavior through skillful prompt engineering.”Prompt Engineering Course in Hyderabad

  22. 8day được thành lập bởi các chuyên gia có nhiều năm kinh nghiệm trong lĩnh vực online. Sứ mệnh của chúng tôi là mang đến cho mọi người một sân chơi công bằng, an toàn và tiện lợi nhất.
    Nhà cái giờ đã có phạm vi hoạt động rộng rãi trải khắp các quốc gia trên thế giới. Để làm được điều này thì không thể thiếu được giấy phép hoạt động của Pagcor cũng như sự bảo hộ của chính quyền Philippines.
    8day còn có một quy tắc quan trọng đó là luôn mang đến cho khách hàng một trải nghiệm cá cược thoải mái nhất nhờ vào những giá trị cốt lõi sau:

    Tuyệt đối bảo mật thông tin cược thủ.
    Sao kê minh bạch mọi giao dịch.
    Đầy đủ khuyến mãi theo các sự kiện.
    Dịch vụ chăm sóc khách hàng tận tâm.
    Thiết kế giao diện độc đáo, đẹp mắt cùng màu sắc hài hòa.
    Luôn đảm bảo kho game được cập nhật từng ngày.

  23. 8day được thành lập bởi các chuyên gia có nhiều năm kinh nghiệm trong lĩnh vực online. Sứ mệnh của chúng tôi là mang đến cho mọi người một sân chơi công bằng, an toàn và tiện lợi nhất.
    Nhà cái giờ đã có phạm vi hoạt động rộng rãi trải khắp các quốc gia trên thế giới. Để làm được điều này thì không thể thiếu được giấy phép hoạt động của Pagcor cũng như sự bảo hộ của chính quyền Philippines.

  24. “Brolly AI’s Custom GPT course empowers individuals to harness the power of advanced language models for tailored applications. Learn to customize GPT-3.5 to meet specific business or creative needs, unlocking limitless possibilities in content generation and automation. Elevate your skills with Brolly AI’s expert-led training for a transformative learning experience.”
    Custom GPT Applications

  25. Looking to elevate your Excel skills to the next level? Look no further than AccountingMastery’s Advanced Excel course. Whether you’re a seasoned accountant or a data-driven professional, our comprehensive program will equip you with the advanced techniques and formulas needed to streamline your data analysis, automate tasks, and unlock the full potential of Excel. Enroll today and take your spreadsheet proficiency to new heights.
    Advanced Excel Course in Hyderabad

  26. Are you ready to take your Excel skills to the next level? Look no further than AccountingMastery’s Advanced Excel course. Designed for professionals seeking to streamline their data analysis, automate tasks, and unlock the full potential of Excel, this comprehensive program offers a deep dive into advanced techniques and formulas.
    Advanced Excel Course in Hyderabad

  29. Car garages in Godalming provide essential services for vehicle maintenance and repair, catering to the needs of local residents and motorists passing through the area. From routine inspections and oil changes to more complex repairs and diagnostics, these garages offer a range of automotive services to keep vehicles running smoothly. With skilled mechanics and state-of-the-art equipment, car garages in Godalming ensure that drivers can rely on their expertise to keep their vehicles roadworthy and safe.
    https://www.jordansgaragegodalming.co.uk/

  30. Alright, gather ’round, folks! I’m about to drop some truth bombs about ThesisWritingService.com https://www.thesiswritingservice.com/ and their ghostwriting prowess. So, picture this: you’re staring down the barrel of your thesis, feeling like it’s about to crush you under its weight. Been there, done that, got the stress-induced acne to prove it. But then, I stumbled upon this gem of a website, and let me tell you, it was a game-changer! Their ghostwriting services are the real deal, folks. They took my thesis from zero to hero in no time flat, and I couldn’t be happier with the results. Trust me, if you’re in need of some serious thesis help in the UK, these guys are where it’s at.

  33. VN88 là sân chơi uy tín đa dạng sản phẩm chất lượng, tạo nên trải nghiệm giải trí hiệu quả và cam kết tính minh bạch cho từng cá nhân.
    #vn88 #vn88casino #nhacaivn88 #vn88style 

  35. Siap untuk menghadapi permainan poker yang seru dan mendebarkan? Ayo, bergabunglah dengan kami di situs dewa poker dan rasakan kegembiraan bermain poker online yang tak terlupakan! Temukan meja hijau virtual yang penuh aksi, lawan pemain-pemain handal, dan rebut kemenangan besar dengan strategi cerdikmu.

  36. Dengan fitur interaktif, turnamen bergengsi, dan hadiah-hadiah menggiurkan. Jadi, jangan lewatkan kesempatan ini! Daftar sekarang di poker 88 dan buktikan bahwa kamu adalah pemain poker yang tak bisa dihentikan!

  37. Dengan fitur interaktif, turnamen bergengsi, dan hadiah-hadiah menggiurkan. Jadi, jangan lewatkan kesempatan ini! Daftar sekarang di poker 88 dan buktikan bahwa kamu adalah pemain poker yang tak bisa dihentikan!

  39. KK Holidays offers comprehensive Golden Triangle Tour Packages that take you on a journey through time, showcasing the rich cultural heritage of India. The Golden Triangle tour is ideal for those who want to experience India’s rich history, culture, and heritage. The tour takes you on a journey through time, showcasing the best of what India has to offer. From the bustling streets of Delhi to the serene lakes of Pushkar, the tour offers something for everyone.

  40. RTP LIVE Bocoran RTP Slot Gacor Pragmatic & PG Tertinggi
    Selain menyediakan informasi RTP Slot gacor terbaru hari ini, situs kami dipercaya dan direkomendasikan oleh para slotter untuk meraih kemenangan jacpot terbesar hari ini.
    https://bit.ly/3SxO2Or

  41. Welcome to the thriving city of Saharanpur, where beauty meets excellence! If you’re on the lookout for the ultimate grooming experience, look no further than the Salon in Saharanpur. Our salon is dedicated to bringing out the best in you, offering a range of services that cater to your every beauty need.

  42. Nhắc đến cổng game uy tín hàng đầu trên thị trường, B52 chắc chắn không còn là cái tên quá xa lạ với người chơi. Thương hiệu dù còn khá non trẻ nhưng có thể đáp ứng mọi tiêu chí của một thiên đường giải trí hấp dẫn và đẳng cấp. Đây cũng là một trong số ít nhà cái được tổ chức nổi tiếng PAGCOR cấp phép kinh doanh hợp pháp.  

  44. The Machine Learning course at Brolly AI is exceptional, providing a comprehensive and hands-on learning experience. The instructors are highly knowledgeable, and the curriculum is well-structured, making it a top choice for anyone looking to delve into the world of machine learning. I highly recommend Brolly AI for aspiring data scientists and AI enthusiasts.
    Machine Learning Classes in Hydeabad

  45. Teeth whitening is a cosmetic dental procedure aimed at improving the appearance of stained or discolored teeth. It involves removing stains and discoloration from the surface of the teeth to achieve a whiter and brighter smile.

    札幌市 ホワイトニング
    https://moyuksaiwaidental.jp/

  46. I am impressed. I don’t think Ive met anyone who knows as much about this subject as you do. You are truly well informed and very intelligent. You wrote something that people could understand and made the subject intriguing for everyone. Really, great blog you have got here. Slot Bonus

  48. I just couldn’t leave your website before telling you that I truly enjoyed the top quality info you present to your visitors? Will be back again frequently to check up on new posts. game 8us

  50. Lamp Institute’s Snowflake training program course Syllbus covers a wide range of topics, from basic concepts to advanced features, ensuring Students gain a thorough understanding of the Snowflake platform.
    Snowflake

Leave a Reply

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