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.

35,327 thoughts on “Department Store Industry”

  5. Just wish to say your article is as amazing. The clearness in your post is simply nice and i can assume you’re an expert on this subject. Well with your permission let me to grab your feed to keep updated with forthcoming post. Thanks a million and please continue the enjoyable work. um curso em milagres

  7. What your declaring is entirely genuine. I know that everyone need to say the exact same factor, but I just believe that you put it in a way that all of us can comprehend. I also enjoy the photographs you set in right here. They in shape so well with what youre trying to say. Im sure youll achieve so numerous men and women with what youve got to say. um curso em milagres

  8. Wow! This can be one particular of the most useful blogs We have ever arrive across on this subject. Actually Magnificent. I’m also a specialist in this topic therefore I can understand your hard work. um curso em milagres

  13. Whats up very nice website!! Man .. Beautiful .. Wonderful .. I will bookmark your site and take the feeds additionally…I’m glad to find a lot of helpful info right here in the post, we need work out extra techniques in this regard, thank you for sharing. um curso em milagres

  14. What i don’t realize is in reality how you are no longer actually a lot more neatly-preferred than you may be right now. You are so intelligent. You understand thus considerably with regards to this subject, produced me in my view believe it from so many various angles. Its like women and men aren’t fascinated except it’s one thing to accomplish with Girl gaga! Your individual stuffs great. Always maintain it up! um curso em milagres

  16. Hi, Neat post. There is a problem with your site in internet explorer, would test this… IE still is the market leader and a huge portion of people will miss your magnificent writing because of this problem. um curso em milagres

  17. CEO 789Bet – Nguyễn Vy thành công tạo dựng nhà cái cá cược số 1 Châu Á. Để đạt được những thành tựu như hiện tại, không thể phủ nhận khả năng hoạch định chiến lược và tiềm năng lãnh đạo của nữ CEO  #789Bet
     

  18. Xổ số 789bet không chỉ là một trò chơi may rủi thông thường, mà còn là một phần của cả một văn hóa giải trí, một thói quen, và đôi khi là một cách kiếm sống của nhiều người dân tại Việt Nam. Từ những ngày xưa, việc chờ đợi kết quả xổ số và cảm giác hồi hộp khi các con số được công bố đã trở thành một phần không thể thiếu của cuộc sống hàng ngày của đông đảo người dân.

  21. Tải và trải nghiệm ứng dụng 789BET trên điện thoại di động ngay hôm nay để tham gia vào thế giới cá cược trực tuyến mọi lúc, mọi nơi. Truy cập trang web chính thức, tải app 789bet và cài đặt một cách nhanh chóng. Đừng bỏ lỡ cơ hội nhận các ưu đãi đặc biệt từ 789BET! #789Bet

  23. Nhà cái Bsports hiện sở hữu hơn 400 giải đấu bóng đá đa dạng và nhiều trò chơi đổi thưởng hấp dẫn. Đồng thời, Bsports cung cấp tính năng livestream trực tiếp, mang đến trải nghiệm thể thao sống động và kịch tính cho hội viên, kèm theo cơ hội tham gia kèo cược với tỷ lệ thưởng cực khủng.
    Tham gia ngay tại website: https://bsports.guru/

  25. Tin tức 789bet chính là điểm đến lý tưởng cho những người chơi đam mê cá cược, nơi họ không chỉ tìm thấy niềm vui và sự hồi hộp trong các trò chơi may rủi mà còn có cơ hội tiếp cận với những thông tin cực kỳ hữu ích và bổ ích.#789bet

  26. Life coaching services are aimed at helping individuals identify and achieve their personal and professional goals. A life coach provides support, guidance, and motivation to help clients create positive changes in their lives. Through one-on-one sessions, a life coach helps clients gain clarity, develop action plans, and overcome obstacles in order to reach their full potential. Life coaching can cover various aspects of life such as career, relationships, health, and personal development, ultimately empowering individuals to lead a more fulfilling and purposeful life.

    mindfulness coach
    https://www.valeriemason-john.com/professional-training/

  30. This blog delves into the intricacies of revenue management within the department store industry, offering valuable insights for professionals. Implementing ISO Certification in Iraq could enhance operational efficiency and quality standards in department store management, aligning practices with global benchmarks.

    ISO Certification in Iraq

  32. THABET là nhà cái uy tín nhất thị trường cá cược Châu Á nói chung và Việt Nam nói riêng. Tại Thabet, bạn có thể biết được cá cược xanh chín là gì..#thabet #thabetcasino #nhacaithabet #thabettvnet

  41. MetaMask Chrome is a fantastic extension that allows users to seamlessly interact with the Ethereum blockchain. With its user-friendly interface and robust features, it has made decentralized applications more accessible to everyday users. Not only does MetaMask Chrome provide a secure and convenient way to manage cryptocurrencies and interact with decentralized exchanges, but it also serves as a gateway to the exciting world of decentralized finance. Whether you are a beginner exploring the world of blockchain or a seasoned crypto enthusiast, MetaMask Chrome is a must-have tool that simplifies the experience of interacting with decentralized applications on the web. So, go ahead and install MetaMask Chrome to dive into the world of decentralized finance with ease! MetaMask Chrome |

  42. Mindfulness in addiction recovery involves utilizing various meditation and mindfulness techniques to help individuals overcome addictive behaviors and develop healthier coping mechanisms. By practicing mindfulness, individuals can increase self-awareness, regulate emotions, and better manage cravings and triggers associated with addiction. Mindfulness also promotes acceptance and non-judgmental awareness of thoughts and feelings, aiding in the process of breaking free from addictive patterns and creating a foundation for lasting recovery.

    mindfulness addiction recovery
    https://www.valeriemason-john.com/mindfulness-based-addiction-recovery/

  43. I9BET – Nhà cái trực tuyến uy tín nhất 2024, với hàng ngàn trò chơi trực tuyến như game bài, nổ hủ, bắn cá. Tại i9bet luôn đề cao sự trải nghiệm cá cược bảo mật, công bằng và đầy hấp dẫn..#i9bet #i9betcasino #nhacaii9bet #i9betreviews

  45. Multiwood has become my go-to destination for office furniture in Dubai, and for good reason! Their extensive collection of office furniture near me encompasses everything from classic to contemporary designs, ensuring there’s something to suit every taste and requirement. What sets Multiwood apart is not just the quality of their products, but also the exceptional level of service they provide. The staff is knowledgeable, friendly, and always willing to go the extra mile to ensure customer satisfaction. Thanks to Multiwood, furnishing my office has been a seamless and enjoyable experience. I highly recommend them to anyone looking for top-notch office furniture and unparalleled service.
    For More Details: https://medium.com/@faizanbabarq9/things-need-to-know-before-buying-office-furniture-in-dubai-bfe19f9d3e5e

  48. عندما يتعلق الأمر بالحالات الطارئة المتعلقة بالسباكة، فإن الوقت هو الجوهر. يمكن أن يتحول المشترك إلى المنفجر أو الصرف المسدود بسرعة إلى كابوس مكلف، مما يترك فقط في المدينة الأساسية هدفًا تجاريًا وعائلتك دون الوصول إلى وسائل النقل الرائعة. ولهذا السبب من الضروري أن يكون لديك خبرة كافية في المدينة المنورة للاتصال السريع. بفضل خبرتهم وأحدث المعدات، يمكنها تشخيص المشكلة البسيطة بسرعة، مما يحدد الضرر والتعطيل في حياتك اليومية. من إصلاح الحنفيات المتسربة إلى تركيب تدفئة مياه جديدة، يمكن للسباك بالمدينة تقديم مجموعة من الخدمات الشاملة على نظام الإضاءة والكهرباء الخاص بك. سواء كنت كثيفة مع حالة طوارئ أو تحتاج ببساطة إلى صيانة العامة، فإن سباك المدينة المنورة الشهير به على بعد مكالمة هاتفية فقط، مما يوفر راحة البال والاستجابة السريعة لنظام السبا الخاص بك وتشغيله في لمحة البصر.
    https://www.sbakmdina.com/

  49. عندما يتعلق الأمر بحالات الطوارئ المتعلقة بالسباكة في المدينة المنورة، أوهايو، فمن الضروري أن يكون لديك سباك موثوق به ثم على الاتصال السريع. سباك المدينة المنورة ليس فقط عامل ماهر، ولكن هناك ماهر تمكن من تشخيص المشكلات الأكثر شيوعًا بسرعة، وفيروس من الحنفيات المتسربة إلى الأنابيب المنفجرة. وهي بوجودهم بقوانين وأنظمة السباكة المحلية، يمكنها تقديم حلول من الدرجة الأولى لتلبية الاحتياجات المحددة للسكان بالمدينة المنورة. سواء كانت حالة طوارئ منتصف الليل لفحص أو صيانة البلدية، فإن سباك المدينة المنورة مخصص لتقديم خدمة سريعة واحترافية مضمونة، مما يضمن أن نظام السباكة في كل شيء يعمل بشكل فعال. اختر سباك بالمدينة المنورة، يمكنك أن تطمئن إلى أن حلول السباكة الخاصة بك ستحلها بسرعة مناسبة، مما يوفر راحة البال لك بالتركيز على الأشياء الأكثر أهمية في حياتك.

    https://www.sbakmdina.com/

  50. 엄선된 카지노사이트, 안전한 게임 환경, 그리고 매혹적인 보너스로 카지노게임의 세계를 즐겨보세요. 저희는 여러분에게 카지노사이트 관련 정보를 자세히 알려드리고 있습니다.
    슬롯사이트

Leave a Reply

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