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.

383,761 thoughts on “Department Store Industry”

  3. You have a real ability for writing unique content. I like how you think and the way you represent your views in this article. I agree with your way of thinking. Thank you for sharing. warkop4d slot

  4. Just take a look at this website. I just searched from my home but the whole credit goes to them. They gave the results I wanted for my life. I would consider them every time! togel online

  5. Kubet88 là nền tảng giải trí trực tuyến hiện đại, cung cấp nhiều trò chơi hấp dẫn với giao diện thân thiện và dễ sử dụng. Hệ thống bảo mật cao cùng dịch vụ hỗ trợ chuyên nghiệp giúp Kubet88 trở thành lựa chọn đáng tin cậy cho người chơi.
    Website : https://kubet88online.casino/

  6. إذا كنت تبحث عن أفضل جهاز لتعطير المنزل، فإن أجهزة مانا تقدم خيارات متعددة تناسب الذوق الشخصي والاحتياجات. تمتاز هذه الأجهزة بسهولة استخدامها وتركيبها، بالإضافة إلى كونها فعالة في توزيع الروائح بشكل متوازن في الأجواء. يمكن التحكم في شدة العطر ومدة التشغيل لجعل التجربة أكثر شخصية. أفضل جهاز تعطير المنزل

  7. Pretty good post. I have just stumbled upon your blog and enjoyed reading your blog posts very much. I am looking for new posts to get more precious info. Big thanks for the useful info. warkop4d

  9. “The iPhone’s software updates keep it running smoothly even after years of use. I appreciate how Apple continually enhances the user experience with new features!”

  11. “Samsung consistently delivers quality, and their customer support is excellent. I had a minor issue with my phone, and they resolved it quickly and efficiently.”

  12. Wow!! Spectacular results from them!! I am never contacting anyone else! The most amazing time period I have ever had! And their service is remarkable! togel online

  13. I truly welcome this superb post that you have accommodated us. I guarantee this would be valuable for the vast majority of the general population. coloksgp

  14. Download Workshop Manuals

    To simplify vehicle repairs, Download Workshop Manuals for quick access to essential information.

    Instant Access: By choosing to Download Workshop Manuals, you get immediate access to detailed repair guides.
    Comprehensive Coverage: These manuals cover everything from basic maintenance to complex repairs.
    Model-Specific Manuals: Each download is tailored to your vehicle’s make and model for accurate information.
    Step-by-Step Instructions: Clear, detailed guides ensure you can follow along easily.
    Cost-Effective: Save money by downloading a manual and doing repairs yourself.
    Download Workshop Manuals today and handle your vehicle maintenance like a professional!
    https://downloadworkshopmanuals.com/

  15. 99ok mang đến cho người chơi một thế giới giải trí đa dạng với hàng loạt kèo cược thể thao. Với tỷ lệ cược hấp dẫn và đa dạng sự kiện thể thao quốc tế, 99ok đáp ứng mọi nhu cầu của các tay chơi cá cược.

  16. 69VN là một sân chơi trực tuyến hàng đầu với nhiều đánh giá tích cực, dù mới thành lập nhưng đã tạo được dấu ấn mạnh mẽ trong lĩnh vực cá cược. Nhà cái được cấp phép bởi PAGCOR, đảm bảo minh bạch và an toàn cho người chơi. 69VN cung cấp đa dạng trò chơi từ game bài, thể thao, bắn cá đến game slot, cùng với giao diện thân thiện và bảo mật cao. Ngoài ra, hệ thống hỗ trợ nhiều phương thức nạp rút, truy cập qua cả máy tính và di động. Đây là điểm đến đáng tin cậy cho người yêu thích cá cược trực tuyến.

  17. Newark Airport Allegiant Air Terminal, providing travelers with convenient and affordable options for domestic travel. Newark Airport’s Allegiant Air Terminal is typically located in Terminal B, offering passengers a range of services, including check-in counters, security screening, and boarding gates dedicated to Allegiant flights. The Allegiant Air EWR Terminal is well-connected to various amenities such as dining, shopping, and transportation options, ensuring a smooth experience for passengers. Allegiant Air’s presence at Newark Airport makes it an accessible option for travelers flying to many U.S. destinations.

  18. Condor Logan Airport operates at Logan International Airport in Boston, providing direct seasonal flights to key destinations in Germany, including Frankfurt and Düsseldorf. Established in 1955, Condor is known for its affordability and customer satisfaction. Passengers enjoy in-flight entertainment, generous baggage allowances, and complimentary meals. With a focus on budget-friendly travel, Condor offers convenient access to Europe, making it an excellent choice for those seeking to explore Germany and beyond. Logan Airport’s accessibility enhances the overall travel experience.

  19. Condor Logan Airport operates at Logan International Airport in Boston, providing direct seasonal flights to key destinations in Germany, including Frankfurt and Düsseldorf. Established in 1955, Condor is known for its affordability and customer satisfaction. Passengers enjoy in-flight entertainment, generous baggage allowances, and complimentary meals. With a focus on budget-friendly travel, Condor offers convenient access to Europe, making it an excellent choice for those seeking to explore Germany and beyond. Logan Airport’s accessibility enhances the overall travel experience.

  22. yang sudah sangat lama berkecimpung di dunia judi online dan punya jutaan member aktif. Urusan transaksi? Gampang banget! Mulai dari transfer bank, pulsa sampai e-wallet, semuanya serba cepat dan praktis. Kamu bisa deposit dan tarik dana tanpa joker123 ribet dengan proses hanya butuh 1 menit saja.

  23. Situs judi Slot online kini menjadi sorotan untuk para pengguna baru karena desain yang cukup simple serta permainan yang sangat mudah sehingga gampang untuk memenangkannya. Untuk para pengguna DP BOSS

  29. Hello! I just wanted to ask if you ever have any problems with hackers?
    My last blog (wordpress) was hacked and I ended up losing a few months of hard work due
    to no data backup. Do you have any methods to prevent hackers?

    my web page: the growth matrix reviews

  31. Your style is so unique compared to other people I have read stuff from.
    Many thanks for posting when you’ve got the opportunity, Guess I will just bookmark this site.

    my web site; torrent web

  32. BUY MARIJUANA INFUSED ONLINE.

    Natural pain alleviation, stress reduction, and potential improvements in sleep quality are all provided by medicinal cannabis. Worldwide, millions of individuals use organic products to enhance their health without utilizing dangerous or addictive treatments. Everyone should have access to cost-effective, high-quality THC and CBD products, according to Medical Bud Stores. We provide top-notch edibles, pre-rolls, vape cartridges, flowers, and other premium medical-grade products. One stop shop for all marijuana infused products 👇👇👇

    Marijuanaonlinemart.com

  33. I’m no longer positive where you’re getting your info, but great topic.
    I must spend some time learning more or figuring out more.
    Thanks for great info I was looking for this info for my mission.

    Here is my web site … web page

  40. Thank you so much for your outstanding article! Your insights were incredibly valuable, and I really appreciate the time and effort you put into creating such an informative piece. I’d also highly recommend checking out ST666, where you’ll find even more expert advice, tips, and guidance that can further enhance your understanding and strategy in the world of online gaming and betting. Keep up the great work, and I look forward to more insightful articles from you!

  41. A debt of gratitude is in order for posting this information. I simply need to tell you that I simply look at your site and I discover it exceptionally fascinating and educational. I can hardly wait to peruse bunches of your posts. slot thailand

  43. I am planning to get my own blog website. Since I am new to the world of blog, I want to get some informative stuffs to kickstart my blog using WordPress. I am looking forward to getting expert technical help for HTML coding. Your help will be appreciated.

  44. I am planning to get my own blog website. Since I am new to the world of blog, I want to get some informative stuffs to kickstart my blog using WordPress. I am looking forward to getting expert technical help for HTML coding. Your help will be appreciated. Delhi Escorts

  47. Với giao diện thân thiện và dễ sử dụng, GK88 tạo điều kiện thuận lợi cho người chơi tham gia vào các kèo cược thể thao và trò chơi sòng bài một cách nhanh chóng. Nhà cái này nổi bật với hệ thống bảo mật hiện đại, giúp bảo vệ thông tin cá nhân và giao dịch của người dùng.

Leave a Reply

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