Department Stores

The department store industry encompasses businesses that have concentrations in retailing a broad assortment of products to the general population. Typically, there are not any predominating merchandise lines within department stores. Different sectors of department store goods may include pharmaceuticals, toys, appliances, footwear, apparel, personal care goods, home furnishings, sporting goods, cosmetics, automotive products, lawn and garden products, jewelry, and hardware, amongst other products.

Department stores are generally large in size and are laid out so the product lines are set up in distinctive, separate departments of the store. Department stores purchase their merchandise from wholesalers and manufactures and then proceed to sell the product in their stores.

Department stores are in competition with mass merchandisers, outlet stores, internet retailers, mail-order retailers, off-price stores, specialty stores, and home shopping networks. Many of these competitors are capable of offering the same merchandise at lower costs, and internet retailers provide a level of convenience that is not available at a department store. Demand for department stores products is dependent upon the spending practices of consumers, as well as the fashion trends occurring in the market. Larger department store companies possess economies of scale in the areas of marketing, purchasing, and distribution, which gives them an edge in generating revenue. Smaller companies stock specialty products catered to specific consumers, engage in excellent customer service practices, and strive to provide a unique in-store experience. Individual companies focus on superior marketing and merchandising in order to generate profit.