Department Stores Retail “Teaser” Industry Report
Industry Analysis
Department Stores Retail
Q1 2012
Industry Overview
Retail is the centerpiece of the consumer-driven U.S. economy, consisting of all business activities selling goods and
services to consumers for personal and household use. It is basically a high-volume, low-margin business, with
certain luxury-goods exceptions. Two categories within the retail industry are general retail and specialty retail.
Department stores, the focus of this report, are part of the general retail segment, as are general merchandisers such
as mass merchants like Wal-Mart. Specialty retail stores are more narrowly focused on specific merchandise
categories, ranging from apparel to office supplies, home furnishings, and sports equipment.
Department stores originated as outlets offering a full assortment of general merchandise. Customer service was
their hallmark, providing return privileges, free delivery, and easy credit. Most large U.S. cities had a great downtown
department store: Macy’s in New York; Neiman-Marcus in Dallas; Marshall Field’s in Chicago; and Lazarus in
Cincinnati. Offering the latest designs from Paris and elsewhere, these stores offered shoppers a previously unseen
selection under one roof in an elegant setting, with sophisticated store designs and window displays.
Over time, many department stores stopped offering certain categories of merchandise, such as major appliances,
electronics, toys, sporting goods, and furniture. General merchandisers have taken over the old role of department
stores as retailers of everything. Today, most department stores focus on apparel and accessories, with varying
degrees of focus on other items. Forms of ownership have changed throughout the years, as family-owned stores
have given way to large publicly traded national and super-regional chains. This has allowed department stores to
leverage their size in negotiations with suppliers, real estate owners, and advertising firms. Almost the entire industry
is based on 50 companies, but this highly concentrated nature is merely a mirage. Department stores compete
fiercely with specialty retailers and large general merchandisers such as Wal-Mart, as well as Internet-only retailers.
Most department stores cannot compete with general merchandisers on price alone, with a small number of
remaining discount stores, such as Kohl’s. Instead, most department stores are geared toward serving middleclass
households with style and quality, while others reach still higher-income *Full
households
such insurance-focused
as Macy’s Inc.’s
report contains
research
Bloomingdale’s, Saks Fifth Avenue, and Nordstrom. Those that have remainedincluding:
at the discount
level have
had trouble
critical analysis,
statistics,
and qualitative
commentary, along with Advisen analytics such as
competing with Wal-Mart and Target on price.
MSCAd Large Losses & Insurance Program Pricing
*Click here for full sample report
*Advisen subscribers have full access to the reports,
please contact [email protected] for information
*Bulk rates are also available, please contact
[email protected] for information
Page 1 of 20
To purchase the full version of this report please click here
www.advisen.com