What does mean Departmental Stores? A departmental store is a large retail trading organization. It has several departments, which are classified and organized accordingly. Departments are made as per different types of goods to be sold. A departmental store may be described as a large retail organization having the number of departments in the same building under centralized control. Each department deals in particular type of trade and is a complete unit in it. So, what is the topic we are going to discuss; Departmental Stores: Meaning, Definition, Features, and Characteristics.
Here are explain What is Departmental Stores? with Meaning, Definition, Features, and their Characteristics
All departments are run under the same ownership, management, and control. Each department is an independent unit as far as a sale of any specific product and its varieties are concerned. The main aim of every departmental store is to provide and fulfill all requirements of their customers at one place along with comforts and facilities which a small scale retailer cannot provide. Here all goods which are available under one roof are sold on a cash basis.
For example, individual departments are established for selling packed food goods, groceries, garments, stationery, cutlery, cosmetics, medicines, computes, sports, furniture, etc., so that consumers can purchase all basic household requirements under one roof. It provides them maximum shopping convenience and therefore, also called as ‘Universal Providers’ or ‘One spot shopping’. The concept of a departmental store first originated in France.
Definition of Departmental Stores:
Some of the important definitions of a departmental store are enumerated as under:
E.V. Cundiff and K.R. Still,
“A departmental store is a large retailing business unit which handles a wide variety of shopping and specialty goods and is organized into the separate department for purposes of promotion, service, and control.”
Clark defines it as,
“That type of retail institution which handles a wide variety of merchandise under one roof with the merchandise grouped into well-defined departments which are centrally controlled.” Thus, a departmental store is an organization of several retail stores carried on in one building and under United controlled management.
In the words of Killough,
“A departmental store is a retailing institution that deals in many lines of merchandise, including women’s wear and house furnishing, each line being separated or departmentalized from the other.”
From the above-mentioned definitions, it is clear that a departmental store offers the widest possible range of goods and services at one place. It aims at providing convenience in shopping and can be turned like a “universal provider”. The basic objective of a departmental store is to provide a large variety of merchandise ‘from a pin to an airplane’ at one place. It also aims at providing quality goods and services to the customers and acts as a universal supplier.
The departmental stores originated in the European countries during the 19th century. The first departmental store known as BON MARCHE was established in France in the year 1852. Two more departmental stores viz; the LOUVRE and the PRINTEMPS were established in 1855 and 1856 respectively. Gradually the departmental stores started getting immense popularity. In England, departmental stores came into existence in 1840 and in the U.S.A. in the middle of the nineteenth century.
Features of Departmental Stores:
Following are the main features or characteristics of a Departmental Stores:
The store is located in the center of a city: The departmental store is usually located in the central area of a large city. Location and premises are the two most important aspects of it. The departmental store is generally situated at that place where a maximum number of people comes for shopping.
Offers a wide variety of goods: A departmental store not only offers a wide variety of goods and but also provides a huge range of designs, colors, and styles that suit the individual demands of consumers.
Shopping under one roof: The main idea behind a departmental store is to supply all basic requirements under one roof. It acts as a supplier of a large variety of quality goods and services. Thus, the departmental store provides maximum shopping convenience to its customers.
They Offer quality goods and services: The motto of every departmental store is to provide high-quality goods and render professional services to their customers. It always keeps a huge stock of fresh goods which highlight the latest fashions and trends followed by different manufacturers.
They have a single management: Various sections of the departmental store operate independently. However, they all are under direct control of a single management. Buying, supervision, accounting, advertising, and external communications are handled directly by the central management of a departmental store.
Always attracts customers: Departmental stores have attractive interior decoration and window display. They spend heavily on sales promotion. This is done through the advertising, discounts, special seasonal offers, gift schemes, festival offers, etc.
Fulfill the needs of most families: Departmental store mainly satisfies the needs of the rich and a higher middle-class group of the society. More attention is given to quality, choice, convenience, and service rendered to the customer.
Renders good customer service: Departmental stores offer efficient customer services such as inspection of goods, actual demonstration of goods, convenient packages, provision for refreshment, reading rooms, home delivery, parking facility, etc.
Operates by appointing experts: The departmental store conducts its business on a very large scale and generates good profit revenues. It can easily afford to appoint experts for purchasing, advertising, recruitment, supervision, etc., and keeps operating smoothly.
Sells goods only on a cash basis: A departmental store sells goods only on a cash basis. Generally, credit facilities are not offered to customers to avoid the risk of bad debts.
They have a high operational cost: Departmental stores have to incur high expenses by way of rent, advertising, provisions of conveniences and facilities to its customers. Thus, costs of operation are high.
Departmental Store diffuses the risk of loss: The losses made by one department of a departmental store can be compensated by profits earned by other departments.
Characteristics of Departmental Stores:
The following Characteristics below are:
- They deal in a different variety of products; say from needle to a car which can be purchased in one place.
- There are various departments operating under one roof and each department specializes in a particular type of trade.
- All the departments operate under the centralized control and management.
- Their operational expenses are very high.
- They undertake extensive advertising in order to attract more customers.
- They are usually situated at the most crowded place and at an important place of the city.
- A large amount of finance is needed to start a departmental store.
- These are best suited for customers.
- The departmental store offers excellent services to their customers viz.; credit facilities, free home delivery and replacement of disapproved goods etc.
A department store is a retail establishment offering a wide range of consumer goods in different product categories known as “departments”. In modern major cities, the department store made a dramatic appearance in the middle of the 19th century, and permanently reshaped shopping habits, and the definition of service and luxury.
Today, departments often include the following: clothing, furniture, home appliances, toys, cosmetics, houseware, gardening, toiletries, sporting goods, do it yourself, paint, and hardware. Additionally, other lines of products such as food, books, jewelry, electronics, stationery, photographic equipment, baby products, and products for pets are sometimes included. Customers generally check out near the front of the store, although some stores include sales counters within each department. Some stores are one of many within a larger retail chain, while others are independent retailers.
Departmental Stores in India:
The departmental stores have not become much popular in India. There are only a few important departmental stores in the country even today. ‘White Hair in Bombay and ‘Military Departmental Store’ are examples of such departmental stores in India. The various disadvantages of departmental stores have been responsible for their less popular in India. They are best suited for the advanced countries where there is no dearth of capital and rich persons.
Departmental stores require a large amount of initial capital investment for their establishment and there is a dearth of capital in India. Moreover, many qualified and efficient persons required for the establishment and running of departmental stores are not available in India. The prices charged by departmental stores are also comparatively higher. The number of rich persons who can afford to go to such departmental stores is very low in India. Hence, departmental stores have not become very popular in India.