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.

81,442 thoughts on “Department Store Industry”

  5. Canon drivers fully support and assists for all compatible products for all Window versions. We offer the required data to configure, utilize and install your Canon products on your Windows PC.canon is completely safe and secure. ij.start.canon

  6. I’ve a well-maintained figure that could arouse your hot intimacy and make you relish astonishing. Hire me once and I ensure to arouse your esteem physical desires. I’m a 24-year-old girl and I love to date different men. It gives me ultimate pleasure to work as one of the erotic Independent escorts in Mumbai and satisfy the intimacy of my lovers. I maintain my good fitness by doing exercises in gym and stay fit and healthy. My good fitness helps me a lot draw the attention of guys and offer them incredible sexual services.

  7. The COPE token project is a blockchain-based token built on Solana. The goal is to create an ecosystem where users are rewarded for good trading. In its first round, COPE won the Solana x Serum Defi Hackathon, winning the Community Choice Prize. The token is currently in early development, but Cyrii is confident it can launch successfully. The community will be one of the most important factors in the success of this project. Check more information here https://goosefx.io/

  8. Haryana HBSE 10th Class Model Questions Papers Download Haryana Class X First Semester / Second Semester Questions Papers Download Here Haryana HBSE Design Open School Class X Model Questions Papers HBSE Matric Model Paper 2023 Download get Complete Information Like Syllabus and 2023 Exam Patter Old and new Questions Topic wise etc., From Here Details is Below

  13. .Canon IJ Printer Utility you can alter your printer’s ink cartridge settings according to your requirements. If any ink cartridges get empty, you can continue to print with other available cartridges after changing the settings.

  14. To get your IJ Network tool to work, you first need to check your printer’s connectivity via LAN connection. Next, check your LAN cable carefully.
    Canon IJ Network Tool you to watch out for the points mentioned below considerably:
    If you want a LAN setup for your printer, you should have the required connectivity equipment such as Network Access Point (Router/ Modem), LAN Cable etc.

  15. Visit ij.start canon and find out the best way to download Canon printer drivers. Canon printers are ideal for every situation wherever you need a document, paper, or photo print or even if you wish to scan, fax, and do more.

  16. All-in-one Canon Inkjet printers are suitable for home, business, school, and others to improve productivity. You can easily set up your Canon printer through drivers from canon.come/ijsetup , wireless connection, USB, and a few components.

  17. I was just browsing through the internet looking for some information and came across your blog. I am impressed by the information that you have on this blog. Keep sharing a lot more relating to this. We would like to see more from you and more regularly.
    mlops tutorial

  18. Departmental Store is operated large scale and many facilities are provided to the customers, it increases overheads of the store considerably. In addition to it, a Departmental store stresses upon advertisement, sales promotion, proper display, and decoration, etc

    Along with this , department stores are doing customer satisfaction survey to improve the product and services at the store level.

  19. A Departmental Store purchases the goods in bulk quantity. It increases the bargaining power of the store. Manufacturers allow heavy discount to the Departmental Stores.

    Similar to kohl’s feedback survey many department stores are doing customer satisfaction survey and providing the rewards to participate in the customer survey so that more customer can be attracted to the departments stores and they can improve the customer shopping experience.

  20. I am glad after reading post and thanks you very much for this post and i doubt how can a person think like that its great brain i can not etha news explain it

  23. Iím amazed, I must say. Rarely do I encounter a blog thatís equally educative and entertaining, and let me tell you, you have hit the nail on the head. The problem is something which not enough people are speaking intelligently about. I am very happy I came across this in my search for something concerning this..The author is known by the naming of Thad and they totally digs that mention. Administering databases has been his normal work for a short time. I am really fond of climbing and I’ll be starting another thing along making use of. California is where he’s always been living. You can always find her website here: 안전놀이터모음

  24. You made some decent points there. I did a search on the issue and found most individuals will agree with your website.This particular blog is obviously educating and factual. I have picked up a bunch of useful advices out of this amazing blog. I ad love to return again soon. Thanks a lot! 메이저놀이터추천

  25. You have a good point here!I totally agree with what you have said!!Thanks for sharing your views…hope more people will read this article!!!//You have a good point here!I totally agree with what you have said!!Thanks for sharing your views…hope more people will read this article!!! NIX카지노

  26. Interesting blog I must say, the facts and information written here are accurate. black leather motorcycle jacket..This was really an interesting topic and I kinda agree with what you have mentioned here..Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming 메이저놀이터

  27. While these ladies aren’t as attractive as some of their competitors, they are a terrific method to meet new people. Call Girls in Islamabad best escorts agency provider in Islamabad Book your night partner now and don’t feel shy Book your Dream escorts girl.
    call girls in Islamabad are renowned for providing top-notch quality service. For more details contact on this number 03001191915.

    Call Girls in Islamabad

  28. I curious more interest in some of them hope you will give more information on this topics in your next article..That appears to be excellent however i am still not too sure that I like it. At any rate will look far more into it and decide personally! ..I like reading through a post that will make people think. Also, many thanks for allowing me to comment! If you want to know about Best Drawing Tablet. With a mind-boggling number of drawing tablet options out there, it becomes a nuisance to compare the features of the different models. 메이저사이트

  29. I gotta favorite this website it seems very helpful ..You have a good point here!I totally agree with what you have said!!Thanks for sharing your views…hope more people will read this article!!..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. TOP3 토토

  30. Really impressed! ed for so long. I will need this post to total my assignment in the college, and it has exact same topic together with your write-up. Thanks, good share 카지노사이트

  31. I gotta favorite this website it seems very helpful ..You have a good point here!I totally agree with what you have said!!Thanks for sharing your views…hope more people will read this article!!..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. 메이저놀이터

  32. All the candidates who have appeared for the CBSE 10th Examinations would like to know when the CBSE Board 10th Blueprint 2023 will be issued. It is to be noted that, candidates will get their CBSE 10th CBSE 10th Blueprint 2023 Blueprint online their official website. That means the UP Board Blueprint will be out either at the end of April or first week of June 2023. Meanwhile the of all the codes will be released. Candidates can check of the respective board.

  33. One of the popular crypto exchanges-Uphold allows crypto and digital asset traders to buy and sell multi assets on this platform. Anyone who has the Uphold username and password details can trade cryptos and traditional assets quickly by accessing their accounts.
    Uphold login |

  34. I read this paragraph fully about the comparison of latest and previous technologies,..it’s awesome article..Quality posts is the important to be a focus for the users to pay a quick visit the site, that’s what this web page is providing. 먹튀폴리스

  36. Hi there! This post couldn?t be written much better! Reading through this article..reminds me of my previous roommate! He constantly kept talking about this…I’ll send this information to him. Pretty sure he will have a great read…Thanks for sharing! 제왕카지노

  37. Normally I do not read post on blogs, however I wish.to say that this write-up very compelled me to check.out and do so! Your writing style has been amazed me..Thanks, very nice article.Two foot fetish guys, one of which wanted me to smear peanut butter on my feet. 먹튀신고

  38. I just found this blog and have high hopes for it to continue. Keep up the great work, its hard to find good ones. I have added to my favorites. Thank You. I would like to say that this blog really convinced me to do it! Thanks, very good post . What a really awesome post this is. Truly, one of the best posts I’ve ever witnessed to see in my whole life. Wow, just keep it up. 토토사이트

  41. I am sure this article has touched all the internet people, its really really nice paragraph on building up new blog…These are really fantastic ideas in on the topic of blogging. You have touched some fastidious things here. Any way keep up wrinting. 메이저공원

  42. Simply unadulterated splendor from you here. I have never expected something not as much as this from you and you have not frustrated me by any stretch of the imagination. I assume you will keep the quality work going on. This is exceptionally instructive substance and composed well for a change. It’s pleasant to see that a few people still see how to compose a quality post.! 카지노용어

  44. Being an exclusive web browser, Ḿetamask lógin accounts do not mandate registering or signing up on the official site. The major reason behind it is that as a browser extension, it will continue to stay on your computer systems.
    metamask wallett |

  46. i am for the first time here. I found this board and I in finding It truly helpful & it helped me out a lot. I hope to present something back and help others such as you helped me. This is highly informatics, crisp and clear. I think that everything has been described in systematic manner so that reader could get maximum information and learn many things. Your article looks really adorable, here’s a site link i dropped for you which you may like . 토토사이트

  47. It was extremely helpful for me. I’m cheerful I discovered this blog. Much obliged to you for offering to us, I too dependably gain some new useful knowledge from your post.  Excellent web site. Lots of helpful info here. I am sending it to several buddies ans additionally sharing in delicious. And of course, thank you in your sweat! I’ve learn some excellent stuff here. Definitely value bookmarking for revisiting. I wonder how so much attempt you place to make this sort of great informative site. 토토사이트주소

  48. I really appreciate this post. I’ve been looking everywhere for this! Thank goodness I found it on Bing. You have made my day! Thanks again! Wonderful post! This post has uncovered hidden treasures on blog commenting. This is a really good post. Must admit that you are amongst the best bloggers I have read. Thanks for posting this informative article.Great internet site! It looks really good! Sustain the excellent work. 파워볼사이트

  49. Being an exclusive web browser, Ḿetamask lógin accounts do not mandate registering or signing up on the official site. The major reason behind it is that as a browser extension, it will continue to stay on your computer systems.
    metamask login |

  50. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be subscribing to your feed and I hope you post again soon. this day is too much good for me, since this time I am reading this enormous informative article here at my home. Thanks a lot for massive hard work. In this article understand the most important thing 메이저놀이터

Leave a Reply

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