Retail Dogma

Department Store

What is a Department Store?

A department store is a large-format retail business that sells a wide variety of products through multiple departments, such as apparel, jewelry, beauty, home furnishings and toys.

Each product category will have its designated area, and some stores offer concessions for other brands to establish their own area within the shop and sell their merchandise to the customers of the store. Such arrangement could be based on a rental agreement for this area, or could be on a consignment basis.

Customers may checkout at a central cash desk or through checkout areas at each department.

Department Store Vs. Supermarket

According to the NAICS classification, a department store may sell perishable groceries, however, this does not represent a significant portion of their sales mix. Supermarkets, on the other hand, primarily sell a general line of food, and may add other lines of merchandise in addition to grocery products.

So supermarkets and hypermarkets, such as Walmart, Carrefour and Target are not considered department stores.

Department Store Examples

Examples of department stores include:

  • Macy’s
  • Debenhams
  • Bloomingdale’s
  • Nordstrom
  • Saks Fifth Avenue
  • House of Fraser
  • Marks & Spencer
  • Harvey Nichols
  • Harrod’s
  • Galeries Lafayette
  • Kohl’s
  • JCPenny
  • T J Maxx
  • Marshalls

Some of these stores are high-end or luxury department stores and others are discount department stores, depending on the type of assortment they carry and the target market they serve.

Some retailers have established two brands of department stores to serve both target markets.

For example, Nordstrom, Inc. created Nordstrom as the high-end version and Nordstrom Rack as the off-price version. Another example is Saks Fifth Avenue as the high-end and Saks Off 5th as the discount version.

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