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.

30,754 thoughts on “Department Store Industry”

  6. Vaseline Lip Therapy is a skincare miracle, not simply a lip balm. This legendary device, which offers unparalleled protection and hydration, has been a mainstay for decades. Let’s explore why having it in your cosmetic arsenal is essential.

  7. Thanks for taking the time to discuss this, I feel strongly that love and read more on this topic. If possible, such as gain knowledge, would you mind updating your blog with additional information? It is very useful for me. cheap steroids

  9. 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 Online

  11. Lamp Institute is the best React Training in Hyderabad. Our program offers a comprehensive curriculum designed to give you a solid grasp of React and its key concepts. Join us to unlock your full potential in React development! React training in Hyderabad

  13. Nhà cái sin88 Là một trong những địa chỉ cá cược trực tuyến đang thu hút sự chú ý lớn nhất hiện nay, Sin88 đã ghi điểm với người chơi bằng những trải nghiệm độc đáo và dịch vụ chất lượng cao đa dạng thể loại: Cá Độ Bóng Đá Online, Đá Gà, Thể Thao,⭐ Lô Đề Online, Bắn Cá, Nổ Hũ,… 

  14. I admire this article for the well-researched content and excellent wording. I got so involved in this material that I couldn’t stop reading. I am impressed with your work and skill. Thank you so much. Slot Online

  18. Wow, What a Excellent post. I really found this to much informatics. It is what i was searching for.I would like to suggest you that please keep sharing such type of info.Thanks Slot Online

  19. Experience the efficiency of Francesco Baittiner & Figli SRL in international logistics. Our correspondents in Genoa, Salerno, Livorno, Rome, Milan, Hong Kong, and Shanghai guarantee a well-planned distribution chain for seamless transportation and customs consultancy. pratiche importazione nave

  20. Kick Who Shoes has transcended geographical boundaries, creating a global footprint. The brand’s popularity extends beyond its country of origin, with a diverse fan base spanning continents. This global appeal is a testament to the universality of the brand’s designs and the recognition of its commitment to quality on an international scale. https://kickwhocc.com/

  21. The first phase the preparation should, theoretically, be uninfluenced by the intended intensity and duration of the sound which is subsequently produced. In fact, however, so quickly are the three phases accomplished that the pianist rarely has capacity to think, in performance, of each phase separately. 小學中文補習

  24. In a world where doubt hides around every corner, having the support of a Detective Agency that can be trusted to reveal truths is important. Apex Detective Agency can uncover any criminal history or aggressive behaviors that may risk workplace safety. We’ve solving cases since 2001.
    http://www.bestdetectiveagency.com

  25. 12Bet – một tên tuổi đã được khẳng định trong làng cá cược thể thao kể từ năm 2007. Với sự công nhận từ chuyên trang đánh giá và xếp hạng uy tín như eGaming Review Magazine, 12Bet tự hào nằm trong top 17 các đơn vị hàng đầu cung cấp giải trí trực tuyến trên toàn cầu.

  26. Thank you for your appreciation! While I don’t actively search for questions about writing coursework, I’m equipped to provide guidance and assistance on a wide range of topics, including writing, coursework, and academic-related inquiries. If you have any specific questions or need help with coursework, feel free to ask, and I’ll do my best to assist you.
    Escorts in kadugodi

  28. List of tamilrockers unblock: Here, the users have two options, that is to either use a proxy site or to use a mirror site. Mirror sites are the websites that are exactly copied like the original one and contain all the contents from the original site.

  30. Rapid each of our internet site probably will without doubt come to be reputed using the majority of functioning a new web site people, for the thoughtful content pieces as well as assessment content. MAYA WEB DESIGN

  32. Your post highlights the potential of starting a side hustle or part-time business alongside a regular job to generate additional income. It’s a way to test ideas and make money on the side. For additional insights, click here

  36. WINVN là nền tảng giải trí cá cược trực tuyến uy tín và đẳng cấp nhất châu Á, nơi cung cấp kho sản phẩm đa dạng, ngập tràn khuyến mãi giá trị khủng.
    #winvn #winvncasino #nhacaiwinvn #winvnnews

  37. Avaliações do Fitspresso
    Have you heard of FitSpresso, a supplement that has been successful in the field of Support Healthy Weight Loss issues? We have received several messages in our mailbox requesting an opinion about the product, and as a result, our team decided to thoroughly investigate FitSpresso. With our extensive experience in health products, we conducted extensive research on the supplement to determine if it truly delivers on its promises. Our analysis covered various aspects, including ingredients, origin, formulations, and effectiveness in lose weight. Additionally, we conducted a Twitter survey to gather feedback from people who have used FitSpresso, aiming to identify possible side effects and changes in their bodies and activities. In our quest for more information, we discovered that FitSpresso is produced by a company that claims to have identified a new solution for Healthy Weight Loss.
    https://www.youtube.com/

  39. ligaciputra link adalah situs slot online berbasis di Indonesia yang menggunakan server terpercaya, yaitu Ligaciputra. Kami memiliki komitmen kuat untuk memberikan pengalaman bermain slot yang luar biasa bagi para pemain. Dengan dedikasi kami dalam memberikan layanan terbaik, Ligaciputra telah menjadi salah satu situs slot paling terpercaya dan ternama di Indonesia. Kami selalu berusaha memberikan yang terbaik dalam segala hal, mulai dari kualitas permainan hingga layanan pelanggan yang ramah dan responsif.

  40. Department stores carry a broad assortment of products, often organized into specialized departments. This diversity allows customers to find a wide range of items in one location.
    Our Website : Login Jantan69 slot gacor

  41. Department stores are known for running promotions, sales, and discounts to attract customers. Seasonal sales events, holiday promotions, and clearance sales are common strategies to drive foot traffic and sales.
    Our Website : Situs Legit77 Slot Online

  42. Situs slot Ligaciputra juga menyediakan layanan customer service terbaik yang stay 24 jam nonstop serta cepat tanggap sehingga siap melayani kapanpun. Segeralah gabung dengan situs judi slot online Ligaciputra dan mainkan hokimu disini !
    Cara Menjadi Member Agen Slot Online Terpercaya LIGACIPUTRA
    website : https://certainkey.com/

  45. This particular is usually apparently essential and moreover outstanding truth along with for sure fair-minded and moreover admittedly useful My business is looking to find in advance designed for this specific useful stuffs… 해외축구중계

  47. I’m constantly searching on the internet for posts that will help me. Too much is clearly to learn about this. I believe you created good quality items in Functions also. Keep working, congrats!
    black wines

  49. ” Sp5der Hoodie
    of fabric ensures durability and a soft touch, making it a perfect companion for both relaxed days and urban adventures. The hoodie’s design seamlessly fits into the modern wardrobe, Sp5der Beanie a blend of casual elegance and street edge.”” Sp5der Hoodie
    of fabric ensures durability and a soft touch, making it a perfect companion for both relaxed days and urban adventures. The hoodie’s design seamlessly fits into the modern wardrobe, Sp5der Beanie a blend of casual elegance and street edge.”

  50. Hello I am so delighted I located your blog, I really located you by mistake, while I was watching on google for something else, Anyways I am here now and could just like to say thank for a tremendous post and a all round entertaining website. Please do keep up the great work. Slot Online Resmi

Leave a Reply

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