written by | September 29, 2022

A Detailed Guide to Department Stores

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Table of Content


The number of departmental stores has increased in recent years. This is due to the growing popularity of shopping centres and the convenience they offer. Departmental stores are a one-stop shop for all your shopping needs and are usually located in high-traffic areas. This makes them convenient for people who do not have time to go to different stores to find what they need. Departmental stores offer a wide variety of products and services and are usually well-stocked with the latest merchandise. This makes them a popular destination for shoppers.

Did you know?

The global department stores market size was estimated at USD 117.15 billion in 2021 and is expected to reach USD 121.78 billion in 2022

What are Departmental Stores?

A departmental store is a large retail establishment that offers a wide range of products and services. Department stores offer various products, including clothing, cosmetics, home furnishings, and electronics. Development of department stores was associated with growth during the 19th century of large population centres, transportation, and harnessing of electricity for power and lighting. 

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History of Departmental Stores

The first department store in the United States was Aaron Montgomery Ward's store in Chicago, which opened in 1872. Ward offered a money-back satisfaction guarantee on all his merchandise, a new concept at the time. The success of Ward's store led to the opening of several other department stores in the years that followed, including Macy's in New York City (1858), Nordstrom in Seattle (1901), and Bloomingdale's (1872). 

These stores were typically large, multi-level buildings that offered various merchandise, from clothing and accessories to home goods and furniture. Customers could browse the different departments at their leisure, and the stores often had unique features like cafes and restaurants.

The department store became a popular shopping destination for middle- and upper-class Americans in the late 19th and early 20th centuries. The rise of the automobile and the growth of suburban areas also helped to drive the popularity of the department store, as it became more accessible for people to travel to these stores. 

However, the advent of online shopping and the growth of big-box retailers like Walmart and Target have led to the decline of the department store in recent years. The Tatas opened the first department store in India (StarBazaar) in Mumbai in the early 20th century. Since then, department stores have become a common sight in Indian cities. Department stores typically offer a wide range of merchandise, from clothing and accessories to home goods and furniture. 

They are often large, multi-level buildings with different departments for different types of merchandise. Customers can browse the various departments at their leisure, and the stores usually have unique features like cafes and restaurants.

Types of Departmental Stores

The main types of departmental stores are as follows:

  1. Supermarkets:

Supermarkets are the most significant type of departmental store. They are typically huge stores that sell various merchandise, including food, clothes, household items, and electronics. Supermarkets are usually located in busy areas, such as city centres or near transportation hubs.

  1. Discount Stores:

Discount stores are a type of department store that sells merchandise at discounted prices. Discount stores typically carry various inventory, including clothes, electronics, and household items. Discount stores retailers purchase products in wide quantities from manufacturers for a massive discount. 

  1. Department Stores:

Department stores not only offer variant goods but also a huge range of designs, colour and style that suit individual demands of consumers. The main concept behind a departmental store is supplying the basic necessities under a roof.

  1. Specialty Stores:

Specialty stores focus upon particular categories as opposed to retailers who sell a large number of consumer goods categories.It has various characteristics but main defining characteristics is that they sell very particular products.

  1. Convenience Stores:

Convenience stores usually sell a limited selection of merchandise, such as food, drinks, and cigarettes. These are small retail businesses that stock a range of regular items like coffee, groceries, snack food, icecreams, tobacco products, newspapers and magazines.

  1. Drugstores:

Drugstores are a type of store that sells medicine and other health-related products. Drugstores include selling prescription drugs, supplements and variant health-related items. 

Characteristics and Features of Departmental Stores

1. Benefits: 

Department stores are large retail establishments that sell a wide range of products. Department stores typically have a wide variety of departments, each selling different products. This allows customers to find everything they need in one place, making department stores a convenient shopping option.

2. Advertising: 

Department stores typically have extensive advertising and marketing campaigns to attract customers. This can benefit as it increases customer awareness of the store and its products. However, it can also be a disadvantage, as it can increase the store's operating expenses.

3. Services: 

Department stores typically offer a wide range of services, such as customer service, credit, and returns. This can benefit customers by providing a more convenient shopping experience. 

4. Employees: 

Department stores typically have a significant number of employees, who are often unionised. This can be a benefit, providing customers with a more personalised shopping experience.

5. Locations: 

Department stores are typically located in central business districts or shopping malls. This can be a benefit, as it increases customer foot traffic. 

6. Security: 

Department stores typically have many storefronts, as it has security issues. This is because many storefronts can make the store more susceptible to crime.

7. Safety: 

Department stores typically have a high level of customer traffic because a high level of customer traffic can increase the chances of accidents and injuries.

8. Inventory: 

Department stores typically have a high level of inventory. A high inventory level can make the store more susceptible to theft.

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9. Expenses: 

Department stores typically have a high level of operating expenses. This is because high operating expenses can eat into the store's profits.

10. Customer Satisfaction: 

Department stores typically have a high level of customer satisfaction. This is because department stores usually offer a wide range of products and services that appeal to many customers.

Advantages of Departmental Stores

1. Offer Convenience: 

Departmental stores offer a wide variety of products under one roof. This is convenient for customers as they can find everything they need in one place. The variety of products also means that there is something for everyone, making department stores a popular shopping destination.

2. Variant Discounts and Sales: 

Departmental stores offer discounts and sales which attract customers. The deals and sales make the products more affordable, a big draw for customers.

3. Quality Customer Service: 

Departmental stores provide good customer service, which keeps customers returning. Customer service is important as it makes the shopping experience more enjoyable and makes customers want to return.

4. Great Place to Window Shop: 

Departmental stores makes a good place for window shopping as it offers a variety of products for the customers to look at.

5. Wide Variety of Products: 

Departmental stores have all that an individual needs or desires. It is a hub that sells a wide variety of products starting from necessities to luxury.

Limitations and Disadvantages of Departmental Stores

  1. Limited Selection:

 While departmental stores may have a wide range of merchandise, they typically carry a limited selection of each product type. This can lead to customer disappointment if they are looking for a specific item and the store does not have it in stock.

  1. High Prices: 

Departmental stores have high overhead costs, which they must recoup through their prices. This can lead to departmental store prices being higher than prices at other types of retail stores.

  1. Challenging to Navigate: 

Departmental stores can be challenging to navigate, especially for first-time shoppers. The stores are often large and overwhelming, making customers feel lost and frustrated.

  1. Long Lines and Crowded: 

Departmental stores often have long lines and can be crowded, leading to customer frustration. Customers may feel like they are wasting their time waiting in line or claustrophobic in a crowded store.

  1. Poor Customer Service: 

Departmental stores may not have the same level of customer service as smaller retail stores, which can be due to the high volume of customers that departmental stores serve. As a result, customers may feel like they are not being given the attention they deserve.

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Conclusion

The concept of department stores was introduced so that consumers could purchase all the products from one place rather than multiple stores. The advantages of departmental stores are that they offer a wide variety of goods and services and are convenient for customers. The disadvantages of departmental stores are that they can be expensive and may not have the same personal touch as a small, local business.

The departmental store has come a long way since its humble beginnings in the early 19th century. Today, departmental stores are a vital part of the retail industry. They offer customers a convenient place to shop for a variety of goods. Departmental stores have something for everyone. Whether you're looking for clothing, cosmetics, or home goods, you're sure to find what you need at a departmental store.

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FAQs

Q: What is a supermarket?

Ans:

Supermarkets or large retail stores are operated on a self-service basis that sell groceries, fresh produce, meat, bakery and dairy products with some nonfood goods.

Q: What is DMart?

Ans:

DMart is a one-stop shop for supermarket chains that intends to provide clients with a wide range of basic home and wellness products under one roof.

Q: Which is the biggest departmental store in India?

Ans:

In terms of revenue and footprint, Reliance Retail is India's largest supermarket chain.

Q: What is the main objective of department stores?

Ans:

The main idea behind introducing department stores was that consumers could purchase all the products from one place rather than multiple stores.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.