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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.

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  34. تعد صيانة تكييف الهواء الخاصة بك في الرياض ضرورية ومؤثرة، خاصة خلال أشهر الصيف. تساعد على الحفاظ على الدوري العام على منع الأعطال، وإطالة عمر وحدة تكييف الهواء لديك، وتحسين جودة الهواء. ابدأ بتنظيف أو تغيير مرشحات الهواء بحيث يقوم بتدفق الهواء وتقليل الضغط على النظام. فحص ومواد المبخر والكثافة الفعالة للتبريد. فحص جاري الهواء بحثت أي قرص أو توصيل قد يقي الهواء تدفق. ومن المهم أيضًا جدول المحافظات الاحتفالية مرة واحدة على الأقل للحالة العامة وتناول أي جزء منها قبل اتفاقهم. من خلال البقاء هو باقيًا في صيانة مكيفات الهواء
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  38. تستمر صيانة مكيفات الهواء في جدة لعدة أشهر بسبب الحرارة الشديدة التي تشهدها المنطقة. لا ضمان الدورية لتشغيل وحدة التكييف، بل تعمل أيضًا على مدة الصلاحية الافتراضية. يمكن للجزيئات المتعددة والرمل الموجودة في الهواء أن تسد كبسولات وتقلل من فعالية العناصر. لذلك، قمنا بتنظيف التكييفات أو استبدالها. بالإضافة إلى ذلك، يعد معايير غاز التبريد والملفات والفحص العام للوحدة السريعة في الإصلاح. إن الاستعانة بفني متخصص في التدفئة والتهوية وتكييف الهواء في جدة كافية لتغطية تكاليفها ويمكن أن تكفيكم تصفية كافية في المستقبل ويحافظ على كل شيء باردًا وغير مؤكد خلال أشهر الصيف الحارة.
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  48. Understanding Microsoft Dynamics 365 Security
    Microsoft Dynamics 365 Security encompasses a holistic approach to safeguarding data, applications, and processes within the platform. At its core, it aims to mitigate risks associated with unauthorized access, data breaches, and compliance violations. Key components of Dynamics 365 security include:

    Role-Based Security: Dynamics 365 employs role-based security to regulate user access to various functionalities and data sets. By assigning roles and permissions based on job responsibilities, organizations can ensure that users only have access to the information necessary for their tasks, reducing the risk of unauthorized data exposure.
    Data Encryption: Encryption plays a crucial role in protecting sensitive data stored within Dynamics 365. By encrypting data both at rest and in transit, organizations can prevent unauthorized access and ensure confidentiality, integrity, and availability of their information assets.
    Authentication and Authorization: Dynamics 365 supports robust authentication mechanisms, including multi-factor authentication (MFA) and single sign-on (SSO), to verify the identities of users accessing the platform. Authorization controls further restrict access to specific records or functionalities based on user roles and permissions, enhancing overall security posture.
    Audit Logging and Monitoring: Comprehensive audit logging capabilities enable organizations to track user activities and system events within Dynamics 365. By monitoring log data for suspicious behavior and security incidents, organizations can detect and respond to threats in real-time, minimizing the impact of potential breaches.
    Best Practices for Microsoft Dynamics 365 Security
    Regular Security Assessments: Conduct regular security assessments and audits to evaluate the effectiveness of existing security controls and identify potential vulnerabilities. Engage with certified professionals to perform penetration testing and vulnerability scans, ensuring continuous improvement of your security posture.
    User Training and Awareness: Invest in comprehensive training programs to educate users about security best practices and raise awareness about common threats such as phishing attacks and social engineering. By fostering a culture of security awareness, organizations can empower employees to play an active role in protecting sensitive data.
    Data Loss Prevention (DLP): Implement data loss prevention policies within Dynamics 365 to prevent unauthorized sharing or leakage of sensitive information. Leverage built-in DLP capabilities to define rules and actions that automatically detect and block unauthorized attempts to access or transmit sensitive data.
    Regular Software Updates: Stay up-to-date with the latest security patches and updates released by Microsoft for Dynamics 365. Timely application of patches helps remediate known vulnerabilities and ensure that your Dynamics 365 environment is protected against emerging threats.
    Compliance Considerations
    Compliance with regulatory requirements and industry standards is essential for organizations leveraging Microsoft Dynamics 365. Some key considerations include:

    GDPR (General Data Protection Regulation): Ensure compliance with GDPR guidelines when processing and storing personal data within Dynamics 365. Implement measures such as data encryption, access controls, and data retention policies to protect the privacy rights of individuals.
    HIPAA (Health Insurance Portability and Accountability Act): Organizations operating in the healthcare sector must adhere to HIPAA regulations when handling protected health information (PHI) within Dynamics 365. Implement robust security measures to safeguard PHI and prevent unauthorized access or disclosure.
    SOC 2 (Service Organization Control 2): Obtain SOC 2 compliance certification to demonstrate the effectiveness of security controls and processes within Dynamics 365. Adherence to SOC 2 standards provides assurance to customers and stakeholders regarding the security, availability, and confidentiality of their data.
    Conclusion
    Microsoft Dynamics 365 security is a critical aspect of enabling digital transformation and driving business growth. By implementing robust security measures, adhering to best practices, and staying compliant with regulatory requirements, organizations can harness the full potential of Dynamics 365 while mitigating risks and protecting their valuable data assets.

    In conclusion, prioritizing Microsoft Dynamics 365 security is not only a strategic imperative but also a fundamental responsibility for organizations entrusted with sensitive data. By adopting a proactive approach to security and embracing industry best practices, businesses can navigate the evolving threat landscape with confidence and safeguard their digital future.
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