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.

46,359 thoughts on “Department Store Industry”

  1. الان مع افضل عيادات تكميم المعدة يمكنكم التمتع بجسم رشيق جذاب سواء راجل او سيدة فكلنا نحلم بالوزن المثالي الجذاب , الان حلم الرشاقة اصبح ممكن ليس مستحيل فقط اطلب المساعدة من الدكتور أحمد عبد السلام لانه متخصص في عمليات تكميم المعدة وتحويل المسار .

  3. الان يوجد في مصر شركات لمبات ليد د متخصصة وذو سمعة طيبة كشركة المصرية السعودية المعروفة بجودة منتجاتها ورخص اسعارها فاذا كنت بتجهز شقتك وتحتاج الي شراء لمبات ليد او لمبات سمارت لايت او كشافات اضاءة عالية الجودة تعامل مع المصرية السعوديةواحصل علي كل ما تحلم به.

  7. VERY SATISFACTORY AND THE VERY HELPFUL BLOG COMMENTING SITES LISTING WHICH YOU HAVE PUBLISHED.

    togel meruapakan pasaran judi online terbaik saat ini. permainan judi togel hari ini sedniri masih memiliki beberapa pilihan pasaran lainnya. pasaran yang saat ini sedang populer adalah judi togel hongkong dan togel singapore pools. kedua pasaran tersebut tentunya meruapakan pasaran judi togel hari ini yang resmi dan dapat dengan mudah di mainkan. para pemain hanya perlu untuk menebak angka keluaran hk hari ini untuk togel hkg dan juga pengeluaran sgp hari ini untuk toto sgp prize. dengan berhasil menebak pengeluara hk malam ini ataupun keluaran sgp hari ini kalian akan dapat memenangkan hadiah jackpot yang nilainya snagat besar. manfaatkan tabel data hk atau tabel data sgp prize untuk menebak angka result hongkong prize atauypun singapore pools setiap harinya.
    https://nuscno.org/

  8. If you have a special need for a call girl, you can always choose the services of a UK Pakistani girl. They are skilled and educated and can provide full body massages that are sure to leave you satisfied. And, if you prefer to travel with a call girl, they can also be a great travel companion or party companion. If you are a businessman and need a companion who’s willing to take you out and give you a great time, you can book a Call girl in Karachi to provide you with this service.

  9. You can also find call girls in Karachi who offer full body massages at many guest houses and hotels. Depending on the level of service, you can pay up to Rs. 1000 per hour. The full body massages will help you relax and feel rejuvenated. If you are a businessman or a student, you can take advantage of this service to get some work done. Just give them a call to book an appointment.

  10. These high-quality call girls are often professional and live in a nice neighborhood. Many of these girls are also trained to offer a full body massage. These high-profile call girls are known for the quality of their services and the respect they receive from their clients. Prices for a full body massage in Karachi are comparable to other cities in Pakistan. And, these ladies will be more than happy to give you an unforgettable experience. https://karachicallgirl.com/

  11. Getting a full body massage from a call girl in Karachi is a great way to relax. It helps to get rid of stress and worries and can also help you lose weight, which is beneficial for your overall health. Many call girls in Karachi provide full body massages, so you’re sure to find one that suits your needs. You can even have the full body massage at home!

  12. There are many aspects of this profession that are illegal and immoral. Karachi call girls, like any other prostitute, are often ashamed of their profession. To avoid the stigma and shame, most prefer to leave their homes and operate from Karachi. One participant had a relative living in the same house as her. The relative was genuinely surprised when he asked how she made money and did not understand why she worked for call girls.

  13. Hello ! I am the one who writes posts on these topics totosite I would like to write an article based on your article. When can I ask for a review?

  15. Stockone is a cloud based warehouse management software for brands and e-commerce companies to manage fulfillment operations at scale.

    Our mission is to be a trusted partner for inventory-led businesses to manage operations efficiently at scale. With the D2C and e-commerce revolution, most of the traditional software solutions do not offer an easy, flexible and scalable system to manage fulfillment across multiple channels, resulting in broken promises to customers.

    With decades of experience in designing, implementing, and running supply chains, we have built a robust platform that is feature-rich and integrates seamlessly with other platforms to fulfill orders at ease.
    inventory management software

  16. Manage your warehouse flows through mobile and flexible WMS, using advanced proprietary
    algorithms for automating warehouse flows and unlocking productivity to deliver orders quicker,
    cheaper and without errors.

    Inventory management made easy. Have real time visibility, unlock easy to create
    workflows and manage operations to improve productivity
    warehouse management

  19. Are you willing to score high in your math examination on the webassign platform? Don’t you have much time to concentrate on your assignment and sit for exams? This is when you will get a query in your mind on ‘ how to hack webassign?’ Experts are always there to help you.

  22. In addition to providing affordable rates, escorts Islamabad are very attractive and available to satisfy your needs. These ladies offer all the facilities that you would expect from a high-class hotel. You can enjoy the night with these beautiful girls, and you can even pay a little extra for your escort’s accommodation. And you’ll be treated like royalty by the seductive escorts Islamabad has to offer.

  24. The Faletti’s Hotel karachi is a 5-story luxury hotel that uses traditional motifs and is conveniently located near the city’s attractions. The hotel also offers complimentary continental breakfast, free WIFI, an on-site restaurant, and air conditioning. The Nishat Hotel, on the other hand, offers a contemporary design, an indoor pool, a complimentary airport shuttle service, and a fitness center.

  25. Depending on your taste and preferences, you can choose from a number of call girls in karachi. Call girls can range from top models to college-going girls, housewives, or independent call girls. Whatever your preference, you’ll be sure to find a call girl that suits your needs. The hotel also offers an online contact form that lets you contact Escorts in karachi and find the best match for your needs. https://karachicallgirl.com/

  26. If you are seeking a discreet and exciting night out in karachi, you can book a Call Girl from Faletti’s Hotel. These Call Girls, who are all under the age of 18 years, can accompany you to any place of interest and can even assist with planning a private night out. Call Girls are also available to accompany you to a wedding or a private party. https://karachicallgirl.com/

  30. Odisha 8th Examination Conducted by Department of School and Mass Education, Government of Odisha, Students looking for Previous years Question Paper 2023s as well. we have uploaded some Genuine Odisha Board 8th Model Paper 2023 provide them a Complete idea to Prepare well before Examination and with the help of Previous years Paper 2023s, Odisha 8th Class Model Paper 2023 High School Students Searching for Odisha 8th class Previous Question Paper 2023 we have Attached the past few year Paper 2023s here go through the Details and Download those Paper 2023s you want. Start your Preparation with Odisha Board to get Qualified in High School Exam with more marks, Candidates are Advised to Practice Through Odisha 8th Sample Paper 2023

  33. Active call girls in Lahore are attractive, educated, and affordable women. Most of them belong to middle-aged girls who are passionate about relationships and interacting with other women. Some even attend college and want to earn money through this industry. The city is home to many companies and individual call girls that offer various services for a small fee. They are also known for their out-call services. Customers can contact them whenever they are in need, for as long as they pay a small subscription fee. Escorts in Lahore

  38. Top Gun Jacket is on trend right Now a new movie has come whose name is Maverick, has used this jacket which gives killer look So buy this now from Slim Fit Leather Jacket and enjoy 20% off use coupon code GET20

  48. CleanMyMac X Crack is the highest list of Mac programs for cleaning your system. Its primary goal is to run a scan of your Mac and eliminate the various junk that gets accumulated over time. The most recent version is compatible with macOS Monterey and Monterey efficiently.

  50. Open up a new world of pg gaming with 100 percent safety, the greatest online slots, mobile slots, new web slots, high security, and steady gameplay.

Leave a Reply

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