Online shopping is the go-to mantra for people in today’s digital world, but this boon in technology has raised the question of whether department stores are still relevant in today’s time. Yet, these large stores have found a way to adapt and succeed despite the competition from online shopping. Imagine walking into a lively store that offers everything you need, from everyday household products to fashionable trendy clothes, all in one place. In this blog, we will learn more about the departmental store, its history, types, features, and challenges it faces in this digital age.
What is a Department Store?
A department store is a type of retail shop that sells a variety of products, all organized into different sections called departments, with each department focusing on a specific type of product. It offers a wide variety of goods and services to appeal to many types of shoppers. These stores became popular in major cities during the mid-19th century and changed the way people shop, as well as how they view service and luxury.
In the US, it is common for departmental stores to have ‘everything under one roof,’ from small items to large types of furniture. Some well-known departmental stores in the US are Walmart, Target, and Macy’s.
Today, departmental stores offer all kinds of products, even food and books. In discount department stores, customers usually pay at the front of the store, while more upscale stores have sales counters in each department. Some are part of larger retail chains, while others operate independently. Since the 1980s, these stores have faced tough competition from discount retailers and, even more so since the 2000s, from online shopping sites.
History of Departmental Stores
The history of department stores dates back to the mid-19th century. One of the earliest examples of these stores is Bennett’s in Derby, which showcased many of the features we associate with departmental stores today. The term “departmental store” itself emerged in the mid-1880s, coinciding with advancements in mass transportation, such as trolleys, which made it easier for customers to visit these large retail spaces.
During this time, these stores started to adopt a more organized layout, offering a wide variety of goods under one roof. This concept allowed shoppers to find everything they needed in one place, from clothing to household items. Some of the well-known stores, like Marshall Field’s in Chicago and John Wanamaker’s in Philadelphia, competed for the title of the most prestigious departmental store in America.
Over the years, these stores became cultural landmarks, especially in urban areas. Apart from shopping, these stores also served as social hubs where people gathered. The design and atmosphere of these stores kept growing to meet the needs of the consumers.
Characteristics and Features of Department Stores
- A departmental store offers several features, some are listed below.
- Modern departmental stores offer many services and aim to provide excellent service to consumers.
- These stores are usually found in the center of a city, making it easy for many people to visit.
- Because they are large, these stores are often set up as companies run by a board of directors. A managing director oversees everything, with help from a general manager and department heads.
- Departmental stores buy products directly from manufacturers and have their own warehouses. This helps cut out unnecessary middlemen between the producers and customers.
- A central purchasing department makes all buying decisions, while sales happen in different store sections.
Types and Examples of Department Stores
Departmental stores are convenient for consumers but they come in various types. Here are some of the main types.
1. Discount Stores
These are retail chains that sell products at lower prices than regular stores. They offer a wide variety of items and provide discounts for buying in bulk. Some examples are Target and Walmart.
2. Off-Price Stores
These stores are usually owned by a brand or a group of brands. Here, customers can find discounted products because they buy directly from the manufacturer. These stores often sell items that are out of season or overstocked. Some examples are TJ Maxx, Marshalls, Burlington, and Ross Dress.
3. Outlet Stores
Outlet stores are smaller shops owned by a single brand. They focus only on that brand’s products and usually have a larger selection of those items than regular stores. For example, a Nike outlet will have more Nike products than a typical store that also sells Nike. Customers can often find additional discounts here. Another example is an Adidas Outlet.
4. Junior Department Stores
Junior departmental stores are smaller stores that sell high-priced items not found in regular shops. Each section of the store runs independently with its own checkout, but the whole store is still managed by one company. Examples of this store type are Bloomingdale’s and Nordstrom.
5. Category-Specific Stores
Category-specific stores focus on one type of product, like clothing, beauty items, electronics, or books. For example, Toys “R” Us is a store that specializes in toys and children’s products. These stores carry a wide range of items in their category, like groceries or baby supplies, but don’t sell anything outside of that category.
6. Warehouse Stores
Warehouse stores are some of the largest stores and also serve as storage for various brands. They sell products in bulk and often require a membership to shop there. Costco Wholesale and Sam’s Club is a well-known example of a warehouse store.
Advantages of Having a Departmental Store
- Departmental stores are usually located in busy areas, which helps them draw in a lot of customers, especially during peak shopping times.
- By offering a wide variety of products all in one place, departmental stores make it convenient for customers to find everything they need without having to go to multiple stores.
- Department stores aim to provide excellent services to their customers. This includes home delivery, taking phone orders, offering credit options, and providing facilities like restrooms, phone booths, restaurants, and salons.
- Departmental stores can invest a lot in advertising and promotions, which helps them boost their sales and attract more customers.
Challenges Departmental Stores Faces
- Because department stores are so large, it’s hard for staff to give individual attention to each customer.
- These stores spend a lot of money on services, which makes their operating costs high. This can lead to higher prices for products, making them less affordable for people with lower incomes.
- With high costs and large inventories, department stores can face significant losses. For instance, if customer preferences change or fashions go out of style, they may have to sell outdated items at a discount to clear out stock.
- While department stores are often in busy areas, this can make them less convenient for quick purchases or for people who prefer to shop at nearby smaller stores.
Despite the rise of e-commerce, department stores are still thriving in the retail sector. Their ability to offer a wide variety of products, coupled with exceptional customer service, makes them a desirable shopping destination for many consumers. In the future, departmental stores that embrace sustainability and technology will have higher chances to survive among their competitors.
