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.

45,605 thoughts on “Department Store Industry”

  6. مصالح ساختمانی به موادی گفته می‌شود ایمن دیار که در ساخت و ساز ساختمان‌ها، پل‌ها، جاده‌ها و سایر سازه‌ها استفاده می‌شوند. این مصالح نقش مهمی در کیفیت، استحکام و دوام ساختمان‌ها دارند. انواع مختلف مصالح ساختمانی به شرح زیر است:
    ۱. مصالح طبیعی:
    سنگ: برای نمای ساختمان، کف‌پوش، دیوارها و غیره استفاده می‌شود.
    چوب: در سقف‌ها، کف‌پوش‌ها و درهای چوبی کاربرد دارد.
    خاک و رس: در ساختمان‌های سنتی و گاهی در آجرهای خام استفاده می‌شود.
    ۲. مصالح مصنوعی:
    آجر: از رس، ماسه و خاک ساخته می‌شود و برای دیوارها و فونداسیون استفاده می‌شود.
    سیمان: به عنوان ماده اصلی در بتن و ملات مورد استفاده قرار می‌گیرد.
    بتن: ترکیبی از سیمان، ماسه، شن و آب که در ساخت پی‌ها و ستون‌ها به کار می‌رود.
    فولاد: برای تقویت بتن و ایجاد سازه‌های فلزی مثل تیرآهن و میلگرد به کار می‌رود.
    ۳. مصالح نوین:
    شیشه: برای پنجره‌ها و نماهای شفاف استفاده می‌شود.
    پلاستیک‌ها: در عایق‌بندی، لوله‌کشی و اجزای تزئینی به کار می‌رود.
    کامپوزیت‌ها: موادی هستند که از ترکیب چند ماده با خواص مختلف ساخته می‌شوند، مانند فایبرگلاس.

  13. KUCINGTOTO Adalah Agen situs terpercaya di indonesia untuk bermain pasang angka dan bisa mendapatkan Cashdrop 180 juta rupiah 
    #kuckingtoto #loginkuckingtoto #dartarkuckingtoto 

  14. Phúc Hoàng, CEO BJ88, là một trong những nhà lãnh đạo trẻ tài năng với nhiều năm kinh nghiệm trong lĩnh vực giải trí trực tuyến.

  22. [keywords] on [SITES] and dive into a world of captivating stories and stunning artwork. Explore a vast collection of genres, including action, romance, fantasy, and more, all available at no cost. Enjoy high-quality scans and stay updated with the latest chapters of your favorite series. Whether you’re a seasoned manga fan or new to the genre, our user-friendly site makes it easy to access and enjoy manga anytime, anywhere. Start your adventure now—read manga online free today and experience thrilling tales and endless excitement! Read manga website online free

  25. Simply wish to say your article is as astonishing.
    The clarity 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 keep up the gratifying work.

    Visit my homepage; kerassentials

  26. Merci pour cet article informatif sur l’industrie des grands magasins. Il est intéressant de noter comment ces établissements s’adaptent aux différents segments de marché en fonction des préférences des consommateurs. La distinction entre les magasins haut de gamme et ceux de masse est particulièrement pertinente, car elle influence les stratégies de marketing et les assortiments de produits.

    Si vous êtes intéressé par la Création site web Maroc
    pour votre entreprise, n’hésitez pas à consulter notre agence web Diavnet. Nous sommes spécialisés dans la création de sites web au Maroc et pouvons vous aider à développer une présence en ligne efficace.

  28. Soi cầu 24h là nguồn thông tin quý giá cho tay chơi lô đề và xổ số, cung cấp dự đoán chính xác và phân tích chuyên sâu. Website giúp người dùng nâng cao cơ hội trúng thưởng thông qua các con số hữu ích. Hãy khám phá ngay! Website: https://soicau24sh.com/

  29. Soi cầu 24h là một nguồn thông tin quý giá cho những ai đam mê lô đề và xổ số, mang đến các dự đoán chính xác cùng những phân tích sâu sắc. Trang web này hỗ trợ người dùng tối ưu hóa cơ hội trúng thưởng với những con số chất lượng. Đừng bỏ lỡ, hãy ghé thăm ngay hôm nay: https://soicau24sh.com/

  30. HB88 là một sân chơi cá cược đẳng cấp, nổi bật với hàng nghìn tựa game trực tuyến từ các đối tác uy tín. Chúng tôi cam kết mang đến trải nghiệm giải trí tuyệt vời và hướng dẫn cá cược hiệu quả từ chuyên gia, giúp người chơi tối ưu hóa cơ hội chiến thắng. Hãy tham gia ngay để khám phá thế giới cá cược hấp dẫn nhất! Website: https://hb88com.click/

  31. HB88 là một nền tảng cá cược hàng đầu, nổi bật với hàng ngàn trò chơi trực tuyến từ những nhà cung cấp đáng tin cậy. Chúng tôi cam kết mang đến cho người chơi trải nghiệm giải trí xuất sắc cùng với các hướng dẫn cá cược từ chuyên gia, giúp tối ưu hóa cơ hội thắng lợi. Đừng bỏ lỡ, hãy tham gia ngay để khám phá thế giới cá cược thú vị này!

    Website: https://hb88com.click/

  33. Thank you for the insightful analysis of the department store industry! It’s fascinating to see how traditional department stores have adapted (or struggled) in the face of digital transformation and changing consumer behaviors. The emphasis on personalized shopping experiences and integration with e-commerce platforms is particularly crucial.

    As we move forward, it will be interesting to observe how department stores leverage data analytics and customer insights to refine their strategies further. I believe a hybrid model, combining online convenience with in-store experience, could offer a sustainable path for growth in this industry. Looking forward to seeing how this continues to evolve!

    Epicor Kinetic Consulting

  37. KING33 nhà cái mới nhất và đang được yêu thích nhất trong năm 2024! Khi đăng ký tài khoản tại nhà cái, bạn sẽ nhận ngay 100k tiền thưởng để thỏa sức khám phá các trò chơi đỉnh cao như trực tuyến, cá cược thể thao, bắn cá, và nhiều thể loại giải trí hấp dẫn khác. 

  39. Shop the latest StussyClub collection! We offer a wide range of top-quality hoodies, sweatshirts, jackets, and other products available exclusively at the official StussyClub clothing website

  40. Hi there! This post could not be written any better! Reading through this post reminds
    me of my previous room mate! He always kept chatting about this.
    I will forward this article to him. Fairly certain he will have a good read.
    Thanks for sharing!

    my blog … hdfilmcehennemi

  43. Department stores have evolved into multifaceted retail hubs, offering diverse product lines from food to fashion, catering to varied consumer preferences. This blog effectively outlines the dynamic nature of department stores, highlighting their ability to cater to different market segments and demographics. From high-end boutiques to mass-market options, these stores not only provide convenience but also serve as cultural landmarks in urban landscapes. Understanding their strategic positioning in competitive markets underscores their role in shaping retail trends and consumer experiences. Overall, this overview encapsulates the essence of department stores as versatile retail destinations

    reference : https://www.globalboardings.com/

  44. “Zomclub offers quick payouts and secure gameplay, along with a wide variety of games. Whether you prefer card games or slots, Zomclub provides a seamless experience with excellent customer support.”

  46. Five88 là một trong những nhà cái cá cược trực tuyến hàng đầu khu vực Châu Á, nổi tiếng với đa dạng sản phẩm và chất lượng dịch vụ của mình. Với kinh nghiệm hoạt động lâu năm trong ngành, Five88 đã thành công tạo dựng được thương hiệu của mình trong cộng đồng cược thủ trong và ngoài nước.

  47. The answer is somewhere between what makes each part different and what makes it good. It is recommended that you hire an escort from an escort service because you will receive many benefits.

    Daman Escort Service

  48. Play Sic Bo at the most reputable online casino. Secure betting, fast payouts, and a range of games make this the go-to site for both beginners and pros alike!

Leave a Reply

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