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.

257,785 thoughts on “Department Store Industry”

  1. Cricbet99.com Login. Cricbet99 id for betting on cricbet99 App. Cricbet99 Apk Download, Cricbet99 Register, cricbet99 whatsapp number
    Cricbet99

  3. Win79 là một nền tảng giải trí trực tuyến phổ biến tại Việt Nam, nổi tiếng với các trò chơi đa dạng như slot và mini game. Website: https://win79.vip/

  4.  Yeu88 là một nhà cái đáng tin cậy với danh mục sản phẩm cá cược trực tuyến phong phú, đem về doanh thu hàng tỷ đồng mỗi năm. Đây luôn là lựa chọn hàng đầu của nhiều người chơi hiện nay. Với mục tiêu trở thành điểm đến cá cược hàng đầu trên thị trường, Yeu88 không ngừng phát triển và mở rộng trên mọi nền tảng trực tuyến. Hãy tìm hiểu thêm về chúng tôi để nhận được những ưu đãi tốt nhất khi bạn hoàn tất đăng ký tài khoản! 

  5. 온라인 도박의 세계에서는 안전하고 신뢰할 수 있는 토토사이트를 찾는 것이 매우 중요합니다. 수많은 사이트 중에서 최고의 사이트를 선택하는 것은 쉽지 않지만, 신뢰할 수 있는 사이트를 통해 안전하게 즐길 수 있습니다. 이 글에서는 최고의 토토사이트를 소개하고, 그 사이트의 안전성, 개인 정보 보호, 그리고 검증된 사설놀이터에 대해 자세히 살펴보겠습니다.
    웹사이트: https://totosite.win/ 

  6. The Project communication management template is a structured tool used to plan, execute, and control communications within a project. It ensures that all stakeholders are informed, engaged, and aligned throughout the project lifecycle. This template helps in defining communication objectives, identifying stakeholders, specifying communication methods, and scheduling communications.

  8. MuleSoft is a widely used integration platform that provides tools to connect applications, data, and devices across on-premises and cloud environments. At its core, MuleSoft offers the Anypoint Platform, which includes a suite of products such as Anypoint Studio, Anypoint Connectors, Anypoint Exchange, and Anypoint Management Center. These tools facilitate the design, development, and management of APIs (Application Programming Interfaces) and integrations.Mulesoft Training in Hyderabad

  14. I can see that you are an expert at your field! I am launching a website soon, and your information will be very useful for me.. Thanks for all your help and wishing you all the success in your business. Evanston attorneys

  16. Thanks for sharing amazing post. I am here to share about Netwyman Blogs. Are you a tech aficionado or IT professional eager to stay ahead of the curve? Look no further! Our comprehensive platform offers an unparalleled resource for networking technologies and advanced IT solutions. This article will provide an in-depth overview of the site, showcasing its standout features and unique benefits.

    At the heart of this platform is a treasure trove of cutting-edge content, meticulously curated to cater to both tech enthusiasts and seasoned professionals. From the latest in networking innovations to insightful analyses of complex IT solutions, you’ll find everything you need to keep your skills sharp and your knowledge current.

  18. Vz99 đã trở thành cái tên quen thuộc với cộng đồng bet thủ trong suốt 12 năm qua, giữ vững vị trí top 10 nhà cái cá cược được yêu thích nhất tại Việt Nam và Châu Á. Thành công của VZ99 đến từ sự nỗ lực không ngừng trong việc cung cấp các sản phẩm chất lượng cao và dịch vụ đáng tin cậy. Nhà cái này đã thu hút hơn 10.000 người chơi mới mỗi ngày nhờ vào những tính năng độc quyền và chương trình khuyến mãi hấp dẫn. VZ99 không chỉ mang đến trải nghiệm cá cược tuyệt vời mà còn tạo ra giá trị xuất sắc cho người chơi. 
    #vz99 #vz99.loan #nhacaivz99 #dangkyvz99

  19. I think this is an informative post and it is very beneficial and knowledgeable. Therefore, I would like to thank you for the endeavors that you have made in writing this article. All the content is absolutely well-researched. Thanks… bola88 asia

  20. Thanks for picking out the time to discuss this, I feel great about it and love studying more on this topic. It is extremely helpful for me. Thanks for such a valuable help again. daftar bola88

  22. Outstanding article! I want people to know just how good this information is in your article. Your views are much like my own concerning this subject. I will visit daily your blog because I know. It may be very beneficial for me. daftar bola88

  23. Yes i am totally agreed with this article and i just want say that this article is very nice and very informative article.I will make sure to be reading your blog more. You made a good point but I can’t help but wonder, what about the other side? !!!!!!Thanks bola88

  24. صحة ونص موقع إلكتروني مخصص لتعزيز الوعي الصحي وتقديم المعلومات الطبية الموثوقة والشاملة. يهدف الموقع إلى تحسين الصحة العامة من خلال نشر مقالات متنوعة تتناول مواضيع الصحة البدنية والعقلية، التغذية السليمة، اللياقة البدنية، الوقاية من الأمراض، والعلاجات المختلفة.

    إليك نظرة عامة على ما نقدمه:
    https://www.sahawanos.com/

  27. Thanks for sharing amazing post. I am here to share about Netwyman Blogs. Explore our up-to-date content covering a wide range of topics, from emerging trends in the blogging industry to detailed reviews of the best tools and platforms available. Our expert tips and advice are tailored to both beginners and seasoned bloggers, ensuring you stay informed and inspired no matter your experience level.

  31. At IPTV-WATCH. COM, we are a leading provider of high-quality IPTV services. Our company has been in the industry for over two years, serving a global clientele with servers located all over the world. We take pride in offering our customers a premium viewing experience with access to a wide variety of channels, including live sports, news, and entertainment. Our IPTV service is compatible with a range of devices, making it easily accessible for our customers wherever they are. IPTV Watch committed to providing exceptional customer service, and our technical support team is available 24/7 to assist with any issues or questions. Our dedication to delivering high-quality IPTV service, coupled with our exceptional customer support, has helped us establish a reputation as a trusted provider in the industry.

    Give Us A Visit :
    https://iptv-watch.com/

  32. Please share more blogs like this one. Your content has been incredibly helpful and insightful. DME of America provides an extensive range of advanced medical equipment solutions, like Electric scooter DME making a profound impact on healthcare across the United States.

  34. We other than respecting your authentic stores and along these Saket escorts in lahore lines have intentionally checked unassuming affiliations paying little warning to a serious level of importance and high profile affiliations. The costs at which affiliations are meandered are plainly obvious and can be administered by individuals with spending plan essentials.

  35. The practice of placing several outgoing calls concurrently, in parallel, is known as parallel dialer. Teams can access multiple lead lists from the top dialers. It enables your agents to target various audiences and call leads on various campaigns. 262 Phone Area Code!

  39. Win79 là một nền tảng giải trí trực tuyến phổ biến tại Việt Nam, cung cấp nhiều trò chơi hấp dẫn như bài cào, tiến lên và slot game. Website: https://win79.top/

  42. Win79 là một nền tảng giải trí trực tuyến nổi bật, mang đến cho người dùng trải nghiệm chơi game đầy hấp dẫn và phong phú. Website: https://win79.win/

  45. Xin88 là nhà cái hàng đầu Châu Á về sự uy tín, phục vụ và chất lượng trong từng sảnh trò chơi, Nhà Cái Xin88 khởi đầu cho sự phát triển công nghệ bảo mật, tối ưu hoá thông tin người chơi, đặt niềm tin lớn cho các cược thủ yên lòng…#xin88

  46. Welcome to our Comprehensive Digital Marketing Training with AI This course is designed to equip you with the essential skills and knowledge needed to excel in the digital marketing landscape. Whether you’re a beginner or looking to enhance your marketing expertise, our course offers a thorough understanding of key digital marketing strategies and the new AI tools., I believe website owners should learn a lot from this site its really user genial It was definitely informative. Your website is very useful. Thank you for sharing! charan marketing

  49. By88 là một nhà cái quen thuộc với những người đam mê cá cược trực tuyến hiện nay. Với nền tảng vững chắc và mạnh mẽ, By88 luôn bắt kịp xu hướng và chiếm được thiện cảm từ các thành viên. Những yếu tố nào đã tạo nên độ uy tín của nhà cái By88? Hãy cùng chúng tôi tìm hiêu sâu hơn về nhà cái này qua bài viết dưới đây.

Leave a Reply

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