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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    BACKGROUND Thrombosis increase the acute and long-term morbidity and mortality in malignancy patients. We analyzed venous thromboembolism (VTE) in patients with Hodgkin lymphoma, the impact of VTE on survival, predisposing factors for VTE, and predicting value of Khorana and ThroLy score models. PATIENTS AND METHODS We included 150 adult patients with Hodgkin lymphoma between January 2010 and 2018 at ou

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    Bên cạnh đó, với các tour du lịch đi qua các khu vực như Quảng Bình với động Phong Nha, Quảng Ninh với vịnh Hạ Long, Việt Du mang đến cho du khách những chuyến đi khám phá vẻ đẹp thiên nhiên hùng vĩ và kỳ vĩ của Việt Nam. Những địa điểm này đều được UNESCO công nhận là di sản thiên nhiên thế giới, tạo nên một bức tranh thiên nhiên tuyệt đẹp và đầy ấn tượng.

    Các điểm đến trong các tour

  45. CMC-Na
    Among the unstabilized enolates used as nucleophiles in iridium-catalyzed asymmetric allylic alkylation reactions, amide enolates are the least explored. Vinyl azides are now employed as amide enolate surrogates in Ir-catalyzed asymmetric allylic alkylation with branched allylic alcohols as the allylic electrophile. Competing reaction pathways are suppressed through the systematic tuning of the steric and electronic propertie

  46. 시알리스 가격
    시알리스는 남성의 성기능 향상을 위한 인기 있는 의약품으로, 많은 사람들이 이를 통해 삶의 질을 높이고 있습니다. 하지만 시알리스를 구매할 때는 여러 가지 고려해야 할 요소들이 있습니다. 치료 목적에 맞는 제품을 선택하는 것뿐만 아니라, 가격, 구매 방법, 정품 확인과 같은 사항들도 중요합니다. 이번 글에서는 시알리스 구매에 대한 가이드를 제공하겠습니다.

    이 글에서는 시알리스의 가격 정보를 살펴보고, 직구를 통한 구매 팁을 공유하겠습니다. 또한, 안전하게 시알리스를 구입할 수 있는 방법에 대해서도 알아보도록 하겠습니다. 올바른 정보와 신뢰할 수 있는 방법을 통해 여러분이 최고의 선택을 할 수 있도록 돕겠습니다.

  47. Công Ty du lịch
    Các tour này không chỉ chú trọng đến sự hoàn hảo trong dịch vụ mà còn tạo ra những hoạt động gắn kết các thành viên trong đoàn, giúp mọi người tận hưởng thời gian bên nhau một cách trọn vẹn. Chắc chắn, những tour du lịch đặc biệt này sẽ là sự lựa chọn hoàn hảo cho những ai muốn có những trải nghiệm khác biệt.

    Công Ty Du Lịch Việt Du nổi bật với chất lượng dịch vụ chuyên nghiệp và tận tâm. Từ việc tư vấn ch

  48. 메이저사이트
    다양한 브랜드의 카지노 제휴 사이트

    한국에서는 단순히 우리의 계열사라고 부르는 카지노 사이트 그룹이 일반적으로 온라인 게임 시장에서 가장 큰 점유율을 차지하는 것으로 간주됩니다. 총 7개의 온라인 카지노가 당사의 카지노 계열 브랜드와 제휴하고 있으며, Merritt 카지노를 비롯한 샌즈 카지노, 킹 카지노, 존 카지노, 코인 카지노, 첫 번째 카지노, 및 007 카지노, 이 모든 카지노와 바카라 사이트는 우리 카지노로 함께 그룹화됩니다. 우리 카지노와 제휴한 여러 카지노 사이트의 이름은 서비스를 계속 제공함에 따라 수년에 걸쳐 변경되었습니다. 각 계열사의 바카라 사이트는 목차 순으로 검토됩니다.

    메리트 카지노

    샌즈 카지노

    <

  49. Kem dưỡng Bihaku
    Trong thế giới của các sản phẩm chăm sóc da, kem chống nắng là một bước không thể thiếu để bảo vệ làn da khỏi tác hại của tia cực tím (UV). Giữa hàng loạt thương hiệu trên thị trường, kem chống nắng Bihaku nổi lên như một lựa chọn hàng đầu được phái đẹp yêu thích. Sản phẩm này không chỉ bảo vệ da hiệu quả mà còn mang lại những lợi ích vượt trội, đáp ứng nhu cầu chăm sóc da toàn diện. Vậy tại sao Bihaku lại được ưu ái

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