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.

52,153 thoughts on “Department Store Industry”

  1. Greetings from California! I’m bored at work so I decided to browse your website on my iphone during lunch break.
    I love the knowledge you present here and can’t wait to take a look when I get
    home. I’m shocked at how quick your blog loaded on my cell
    phone .. I’m not even using WIFI, just 3G .. Anyways, good site!

    Here is my web blog – health living

  3. indown Using indown.io is fast, reliable, and, most importantly, completely free. If you’ve ever tried to find a straightforward way to download from Instagram, you’ll know it can be a struggle, but indown.io makes everything smooth and seamless. This handy tool makes it simple to download high-quality Instagram content

  4. I really like your article. It’s evident that you have a lot knowledge on this topic. Your points are well made and relatable. Thanks for writing engaging and interesting material. botak empire

  6. Thanks for every other informative site. The place else may just I get that kind of information written in such an ideal means? I have a venture that I’m just now operating on, and I have been on the look out for such information 도깨비토토

  7. After you sign up, your account needs to be authenticated before you can use MoonPay login funding methods or begin trading. We will inquire who you are and where you live in order to validate your account in accordance with laws and regulations.

    https://justpaste.it/i3xai

  10. Great job, I was doing a google search and your site came up for homes for sale in Altamonte Springs, FL but anyway, I have enjoyed reading it, keep it up! botak empire

  11. I extend my heartfelt gratitude to everyone who provided their support and insights in shaping this content. Your guidance and encouragement were essential in bringing this work to life. Thank you sincerely for your valuable contributions. – gold maharashtra lottery online

  13. The first phase the preparation should, theoretically, be uninfluenced by the intended intensity and duration of the sound which is subsequently produced. In fact, however, so quickly are the three phases accomplished that the pianist rarely has capacity to think, in performance, of each phase separately. 라이브스포츠중계

  14. 8KBET là nhà cái cung cấp game cá cược hấp dẫn nhất tại khu vực châu Á hiện nay. đăng ký 8KBET trải nghiệm để nhận về nhiều phần thưởng giá trị.

  19. When I originally commented I clicked the -Notify me when new comments are added- checkbox and today when a comment is added I purchase four emails using the same comment. Possibly there is in any manner you possibly can eliminate me from that service? Thanks! 온라인카지노

  22. Tại Hb88, bạn sẽ được đắm chìm trong hàng nghìn trò chơi đầy hấp dẫn, từ các môn thể thao kịch tính, bắn cá sôi động, cho đến những sòng casino trực tuyến lớn nhất.

  23. I simply must tell you that you have written an excellent and unique article that I really enjoyed reading. I’m fascinated by how well you laid out your material and presented your views. Thank you. botak empire

  26. Hb88 là một trong những nền tảng cá cược và giải trí trực tuyến hàng đầu, mang đến cho người dùng một môi trường cá cược an toàn và chuyên nghiệp. Với giấy phép hoạt động hợp pháp từ các tổ chức quốc tế, Hb88 không chỉ tạo dựng lòng tin với người dùng mà còn không ngừng phát triển để đáp ứng nhu cầu giải trí đa dạng. Nền tảng này được thiết kế thân thiện với người dùng, giúp trải nghiệm cá cược trở nên đơn giản và thú vị.

  28. I really got into this article. I found it to be interesting and loaded with unique points of interest. I like to read material that makes me think. Thank you for writing this great content. botak empire

  30. Hey! Do you use Twitter? I’d like to follow you if that would be ok.
    I’m definitely enjoying your blog and look forward to new
    updates.

    Look at my site; link

  33. Enjoy ones site as its directly to the point but not technical. I’m keen on gadgets as well as anything tech connected thats the reason why i posted right here. 에프페시아

  34. I’m impressed, I must say. Really rarely can i encounter a weblog that’s both educative and entertaining, and let me tell you, you have hit the nail for the head. Your idea is outstanding; the problem is something which there are not enough persons are speaking intelligently about. My business is very happy i found this around my search for something concerning this. 슈퍼카마그라

  37. تقنية اونلاين – Teqnia Online

    تقنية اونلاين موقع عربي شامل يستعرض مجموعة من المقالات التقنية والشروحات الخاصة بالتجارة الالكترونية وكيفية الربح والعمل على الانترنت، الموقع أيضا يغطي العديد من آخر اخبار التكنولوجيا، بالإضافة إلى مقالات خاصة بكيفية تحميل التطبيقات والألعاب.

    إليك نظرة عامة على ما نقدمه:
    https://teqniaa.online/

    #تقنية_اونلاين
    #تقنية
    #Teqniaa_Online

  38. I really got into this article. I found it to be interesting and loaded with unique points of interest. I like to read material that makes me think. Thank you for writing this great content. faineporno.com

  39. VN88 là một trong những nhà cái trực tuyến nổi bật tại Việt Nam, cung cấp đa dạng các dịch vụ cá cược thể thao, slot game, và các trò chơi khác. Với giao diện thân thiện, hỗ trợ nhiều phương thức thanh toán và bảo mật cao, VN88 mang đến cho người chơi trải nghiệm giải trí chất lượng và an toàn.

  40. Thank you for some other informative blog. Where else could I get that type of information written in such an ideal means? I have a mission that I’m just now working on, and I have been at the look out for such information. trendy clothes

  42. WW88 là một nhà cái trực tuyến uy tín, nổi bật với các dịch vụ cá cược thể thao, trò chơi slot và poker. Với giao diện thân thiện và dễ sử dụng, WW88 mang đến cho người chơi những trải nghiệm giải trí tuyệt vời, đồng thời cam kết bảo mật thông tin cao và thanh toán nhanh chóng.

  43. Good88 là một nhà cái trực tuyến nổi bật, cung cấp đa dạng các dịch vụ cá cược thể thao, game slot và các trò chơi giải trí hấp dẫn khác. Với giao diện dễ sử dụng, tốc độ nạp/rút nhanh và bảo mật cao, Good88 mang lại trải nghiệm cá cược mượt mà và an toàn cho người chơi.

  44. A fascinating discussion is worth comment. I do think that you ought to publish more about this subject,
    it might not be a taboo matter but typically people do not talk about such topics.
    To the next! Best wishes!!

    Also visit my blog post – Singapore escorts

  45. Superb Feedback to Web Publication Remark

    Great entry! I’m really delighting in the content on this site.
    Secure you before pondered pertaining to procuring inside electronic betting gaming activities?

    Evolution Gaming Provider is a brilliant website encompassing a expansive assortment of outstanding real-time card dealer options.
    The overall journey is outstandingly captivating and
    bona fide, it is akin to you’re right at the casino part
    of the proper wagering.

    On the condition you’re eager pertaining to testing it more,
    I’d be quite delighted to share my tip URL. Evolution has a
    superb signup reward for new bettors. It’s absolutely valuable reviewing additionally in the event you’re desiring a updated
    internet gaming experience.

    Thankfulness as well with regards to the fantastic web publication text.
    Keep the the brilliant labor!

    Here is my web site; free spins

  47. “‘ การเปลี่ยนแปลง ของ Evolution Gaming ‘”

    การ ดัดแปลง และ ก้าวหน้า
    เป็นเรื่องปกติในโลกของ วิชาการ และธุรกิจ ซึ่ง ‘Evolution Gaming’ เป็นหนึ่งในบริษัทที่สะท้อนแนวโน้มนี้อย่างชัดเจน

    Evolution Gaming เป็นบริษัทชั้นนำในอุตสาหกรรม เกมการพนัน ออนไลน์ โดย ถือกำเนิดในปี 2006 และมีการ ขยายธุรกิจ อย่างต่อเนื่อง จนกลายเป็นหนึ่งในผู้นำด้านการให้บริการ
    เกมจำลองคาสิโนสดแบบออนไลน์ที่ใหญ่ที่สุดในโลก

    ความ ความเจริญก้าวหน้า ของ Evolution Gaming มาจากการปรับตัว และพัฒนา นวัตกรรมอย่างต่อเนื่อง บริษัทมีการ ใช้ เทคโนโลยีล่าสุดมาใช้ในการ สร้างสรรค์ เกมและการถ่ายทอด
    ผ่านแพลตฟอร์มออนไลน์ ทำให้ผู้เล่นสามารถ ได้รับประสบการณ์ประสบการณ์ เกมการพนัน แบบ ออนไลน์แบบตัวต่อตัว
    ได้อย่างสมจริง

    นอกจากนี้ Evolution Gaming ยังมีการพัฒนา
    บุคลากรภายในองค์กรอย่างต่อเนื่อง โดยการ ฝึกฝนทักษะของ ทีมงาน
    เพื่อให้สามารถ ปฏิบัติ ความต้องการของ ลูกค้าเป้าหมาย ได้อย่างมีประสิทธิภาพ ซึ่งเป็นปัจจัยสำคัญที่ทำให้
    Evolution Gaming สามารถ รับมือ
    และ ขยายตัว อย่างต่อเนื่องในตลาดที่มีการแข่งขันสูง

    การ ปรับเปลี่ยน ของ Evolution Gaming
    ไม่เพียงแต่สะท้อนถึงความ ความเจริญก้าวหน้า ขององค์กรเท่านั้น แต่ยังเป็นตัวอย่างที่ดีของการ เปลี่ยนแปลงและพัฒนา นวัตกรรมในโลกธุรกิจ ซึ่งเป็นปัจจัยสำคัญที่จะนำไปสู่ ความก้าวไกล และความยั่งยืน ในอนาคต

    My web-site :: โบนัสคาสิโนออนไลน์

  48. FUN88 là một nhà cái trực tuyến nổi tiếng, chuyên cung cấp các dịch vụ cá cược thể thao, trò chơi điện tử và các sản phẩm giải trí hấp dẫn. Với giao diện thân thiện và dễ sử dụng, FUN88 mang đến trải nghiệm chơi game mượt mà, an toàn và bảo mật cao.

  49. VIPWin là một nhà cái trực tuyến cao cấp, cung cấp các dịch vụ cá cược thể thao, game bài trực tuyến, và trò chơi slot hấp dẫn. Với giao diện sang trọng và dễ sử dụng, VIPWin mang đến trải nghiệm giải trí đẳng cấp, bảo mật tối đa và tốc độ giao dịch nhanh chóng.

  50. Легко ли быть наблюдателем, когда вокруг творится зло и нельзя вмешаться, навести порядок,
    защитить? Главный герой этого романа – дон Румата (землянин Антон), который попадает на планету Арканар с экспериментальным миром.
    На этой планете царит средневековая жестокость, фальшь
    и борьба за власть. Но Румата не должен вмешиваться.

    Он ученый, который проводит эксперимент.
    Однако человек в нем берет вверх
    над ученым, сердце побеждает рассудок.
    Разве можно спокойно наблюдать, как зло побеждает добро, как талант растаптывается, а справедливости не
    существует? Главному герою это не удается…
    Трудно быть Богом

Leave a Reply

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