Magazine article Marketing

Amanda Aldridge on Retail: Department Stores Offer a Touch of Retail Magic

Magazine article Marketing

Amanda Aldridge on Retail: Department Stores Offer a Touch of Retail Magic

Article excerpt

Do you think of yourself as a department store shopper? Probably not. Yet, if you live in a UK city of reasonable size, the chances are that you visit one of the big-name chains on a fairly regular basis. They are an established part of the UK retail scene.

Department stores are under increasing competitive pressure, as the supermarkets continue to extend their product offering into clothing, homeware, electricals and cosmetics - so much so that you might ask when a supermarket stops being a supermarket and becomes a department store. They also face a challenge at the other end of the size spectrum: the brands they sell have widened their product ranges, and many are now opening standalone stores.

Department stores come in for more than their fair share of media criticism. They are portrayed as old-fashioned or lacking in a distinct product offering.

Like all large institutions, they are easy targets; the very name 'department store' sounds a little old-fashioned. Yet this is a group of stores that includes some of the most cutting-edge shopping experiences around. There are an awful lot of good things about the department store sector that tend to be forgotten.

First, they are able to tap into growth areas. Their size gives them the ability to adapt the way they use their selling space, more like shopping centres than 'small box' retailers, but with none of the lease complications.

To reflect this difference, they have even been known to refer to themselves as 'portfolio managers'.

Second, they are less exposed to mistakes in their range of stock than a single-brand operator - the brand management element of their operation is just as important as the portfolio management.

Finally, their use of concession deals gives them a further advantage: concessions generally stock a smaller range than standalone stores, but typically include all the bestsellers, and the six-month concession agreements offered by so many stores afford them great flexibility.

These factors will help the slick operators in the department store sector ride out weakening consumer confidence more effectively than other retailers.

That said, one of the biggest weapons in the department stores' armoury is the iconic nature of many of these shops. …

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