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.

355,898 thoughts on “Department Store Industry”

  1. If you think about the most complete gacor slot games, what is going through your head is definitely the most popular, best and most profitable type of online slot game agent. The cartoon visuals of each game become more realistic like a film, thereby increasing the comfort of playing. Currently, various game recording systems on the best and most trusted online slot game sites create slot jackpots that appear in just a matter of hours. For clearer information, you can visit our website https://spm.utu.ac.id/products/arwanatoto/

  2. 123WIN là một sân chơi giải trí hàng đầu đến từ quốc gia Costa Rica và nhà cái đã khẳng định vị thế của mình như một trong những nhà cung cấp dịch vụ cá cược và giải trí tốt nhất trên thị trường hiện nay.

  3. Hi! I’m Teena Verma, and I’m all about helping schools and businesses in Delhi NCR leverage technology to their advantage. Whether you need to set up a brand new computer lab for your school or college, or you’re looking for the right accounting software solution (like Tally or MSME options) for your business, I’m here to guide you. I can also help with your IT infrastructure, including computer networking, server setup, data security and storage solutions. Even if you need temporary equipment rentals like laptops or are looking for a reliable UPS solution, I can connect you with the right resources.

  5. Someone Sometimes with visits your blog regularly and recommended it in my experience to read as well. The way of writing is excellent and also the content is top-notch. Thanks for that insight you provide the readers! law firm

  6. Thanks for a wonderful share. Your article has proved your hard work and experience you have got in this field. Brilliant .i love it reading. Seyfler

  7. Nhà cái fb88 là 1 trong những nhà cái cá cược hàng đầu tại Việt Nam hiện nay. Với nhiều năm kinh nghiệm hoạt động trong lĩnh vực cá cược trực tuyến, fb88 đã và đang thu hút được sự quan tâm của rất nhiều người chơi…#fb88

  15. Nasza pergola tarasowa to idealne rozwiązanie dla tych, którzy szukają harmonijnego połączenia stylu i funkcjonalności. Zapewniając nie tylko osłonę przed słońcem, ale również wyrafinowany wygląd, nasza pergola staje się sercem Twojego tarasu. https://sobimex.pl/category/pergola

  20. İkonyum Veteriner Kliniğinde Muayene, Teşhis, Ultrason, Anestezi Cihazı, Evde Veteriner Hekim Hizmeti, Laboratuvar, Yoğun Bakım, Röntgen, Yatılı Tedavi, Pet Kuaför, Pet Shop bölümleri ile hizmet vermektedir Veteriner Kliniği

  21. Veteriner hekimlik alanındaki akademik çalışmaları ve bilimsel araştırmaları yakından izleyerek hayvan sağlığıyla ilgili her konuda yeni bilgi ve uygulamaların gelişmesini desteklemektir Veteriner Kliniği

  24. يعد إصلاح مكيفات الهواء في الكويت أمرًا ضروريًا، خاصة خلال أشهر الصيف الحارقة عندما ترتفع درجات الحرارة إلى ما يزيد عن 40 درجة مئوية. من الضروري أن يكون لديك نظام تكييف هواء يعمل بشكل صحيح للبقاء باردًا ومريحًا في الداخل. عندما تتعطل وحدة التيار المتردد لديك، من المهم الاتصال على الفور بخدمة إصلاح متخصصة لتشخيص المشكلة وإصلاحها. قد تشمل المشاكل الشائعة في مكيفات الهواء في الكويت مشاكل تتعلق بكفاءة التبريد، أو الضوضاء الغريبة، أو التسريبات، أو الأعطال الكهربائية. سيقوم فني ماهر بتقييم المشكلة، وتقديم شرح تفصيلي لها، وتقديم حلول إصلاح فعالة لضمان تشغيل وحدة تكييف الهواء الخاصة بك بسلاسة في أي وقت من الأوقات. يوصى أيضًا بالصيانة المنتظمة لنظام تكييف الهواء الخاص بك لمنع الأعطال المستقبلية وضمان الأداء الأمثل، خاصة في مناخ متطرف مثل مناخ الكويت.https://www.repairtkef.com/

  25. Trong lĩnh vực cá cược trực tuyến, việc tìm kiếm một trang web chính thức và đáng tin cậy để tham gia là điều cực kỳ quan trọng. Hi88vip.site tự hào là đại lý chính thức của Hi88. #hi88

  26. rs8 com tự hào là điểm đến lý tưởng cho những ai tìm kiếm niềm vui và cơ hội trong thế giới cá cược trực tuyến, nơi uy tín và chất lượng luôn được đặt lên hàng đầu.#Rs8sport #Rs8sports

  27. rs8 com tự hào là điểm đến lý tưởng cho những ai tìm kiếm niềm vui và cơ hội trong thế giới cá cược trực tuyến, nơi uy tín và chất lượng luôn được đặt lên hàng đầu.#Rs8sport 

  30. Online gaming sites have become a very popular pastime all over the world. Enjoy various online games in full with the latest seamless wallet system, features and technology only from Nexusengine. Here you can enjoy all the most complete features and Gacor slot games. I really like it, and I look forward to hearing from you next. Thank you for the information regarding the most popular news today this year. For more complete information, please visit our website for further information https://maxwowin.com/

  31. Because it’s an online gaming site
    play the game according to your skills and preferences so you can get lots of prizes and bonuses, play often and collecting them can make you rich in the near future. So you can make money easily through online games. I really like it, and I look forward to hearing from you next. Thank you for the information regarding the most popular news today this year. For more detailed information, please visit our website for information https://babayo88.org/

  32. toto12 sepertinya tempat yang tepat untuk menikmati kesenangan perjudian online. Dengan opsi pembayaran yang aman dan dukungan pelanggan yang responsif, saya merasa percaya diri untuk mengambil tindakan!

  33. Online games themselves are currently viral in the world. Almost all people in the world, especially Indonesia, choose this game compared to other online games. Easy rules, cheap minimum bet requirements, and multiple payouts are one of the reasons why this game is so popular. For clearer information, you can visit our website https://modalperak.com

  34. 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… 상품권 현금화

  35. SportsX9 is your ultimate destination for all things sports and betting apps. From the latest news and updates to in-depth analysis, scores, and highlights across various sports leagues worldwide, we strive to keep fans informed and entertained. Whether you’re a passionate follower of football, basketball, baseball, or any other sport, our dedicated team works tirelessly to deliver comprehensive coverage and insights. Explore the best betting apps in India and join us in celebrating the thrill of sports while staying connected to your favorite teams and athletes with SportsX9.

  36. how to reset brother printer to factory settings, locate the ‘Settings’ or ‘Menu’ button on the printer’s control panel. Navigate to ‘Initial Setup’ or ‘Reset’ option. Confirm the action and follow on-screen prompts. Ensure all custom settings are backed up as this process erases all personalized configurations, restoring the printer to its original state.

  38. Either the main online game bookie site link or alternative link has been provided very easily and easily. We provide complete alternative link options to make it easier for online game players to access using one account and one user ID on several devices, both desktop and mobile. Online slot games are a game option that attracts many online game players. Not only does it share happiness and enjoyment, this game can also share income and increase promising income. For clearer information, you can visit our website https://sumpitbatu.com

  39. rs8sports, điểm đến giải trí trực tuyến uy tín hàng đầu dành cho người chơi từ Việt Nam đến Châu Á, mang lại sự đa dạng trong lựa chọn trò chơi từ cá cược thể thao, slotgame, đến đá gà, bắn cá và lô đề.#Rs8sport

  40. Alwarpet escorts is one of the most popular companions in Alwarpet. With a wide variety of services, they offer the perfect solution to any situation. From romantic nights out to business meetings and events, they are always ready to provide a quality experience. For those seeking a discreet and high class escort, Alwarpet call girls is the perfect choice. They are experienced, professional, and discreet in order to make sure that your experience is positive and enjoyable. https://in.curbess.com/call-girls/chennai/alwarpet/

  41. 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. xgxbet

  42. 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. nawin99

  43. If you think about the most complete gacor slot games, what is going through your head is definitely the most popular, best and most profitable type of online slot game agent. The cartoon visuals of each game become more realistic like a film, thereby increasing the comfort of playing. Currently, various game recording systems on the best and most trusted online slot game sites create slot jackpots that appear in just a matter of hours. For clearer information, you can visit our website https://braderjp.org/

  44. The Netgear EX3700 is a dual-band WiFi range extender that amplifies existing WiFi coverage, eliminating dead zones. It’s easy to set up and boosts signal strength for improved connectivity throughout your home.
    netgear ex3700

  46. Is your hp printer not printing colors correctly? Experience frustration-free printing with our troubleshooting guide. From recalibrating print heads to ensuring proper ink levels, we’ll help you diagnose and resolve color printing issues swiftly. Say goodbye to faded hues and hello to vibrant, high-quality prints with ease.

  47. Monetization made simple with GiveMeBoost! Our real watch hours from real viewers can help you achieve your goals faster. Affordable pricing starting at $9 for 100 watch hours – try it now! buy watch hours on youtube

  48. Online gaming sites provide quality professional customer service which is an important point. Trusted online agents and sites provide responsive customer support, providing fast assistance and effective solutions to any questions or problems that arise. I really like it, and I look forward to hearing from you next. Thank you for the information regarding the most popular news today this year. For more complete information, please visit our website for further information. For clearer information, you can visit our website https://gacorini.com

  49. عند التفكير في شراء مكيف هواء مستعمل في جدة، هناك عدة عوامل يجب وضعها في الاعتبار لاتخاذ قرار ذكي. أولاً، تأكد من أن مكيف الهواء في حالة عمل جيدة من خلال فحصه بدقة بحثًا عن أي علامات تلف أو تآكل. تحقق من قدرة التبريد وتصنيف كفاءة الطاقة للتأكد من أنها تلبي احتياجاتك وفعالة من حيث التكلفة على المدى الطويل. بالإضافة إلى ذلك، استفسر عن عمر الوحدة وتاريخ صيانتها لقياس عمرها الافتراضي وأدائها المحتمل. يمكن أن يوفر الشراء من البائعين أو المنصات ذات السمعة الطيبة مثل الإعلانات المبوبة ضمانًا أكبر لجودة مكيف الهواء. وأخيرًا، تفاوض على ا
    https://www.shramkyfat.com/

Leave a Reply

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