14 CHARACTERISTICS OF DEPARTMENTAL STORES

A departmental store is a large establishment selling a wide variety of goods, categorized into well-defined departments.

A department store has the following characteristics:

1. Location: A departmental store is generally located in important places in the city or near popular markets.

In short, department shops are typically located in areas where the majority of people shop.

2. Wide variety: Department stores typically offer a large selection of products, from eatables like gala and biscuits to beverages.

They provide consumers with a wide range of options, allowing them to select the products they desire based on their interests.

Even durable items like furniture can be purchased at a department shop. 

3. Departmental basis: As is evident from its name, a departmental store is a summation of the different departments in one building.

The selling of goods and services is decentralized into various departments.

Each departments in a departmental store sells a particular type of goods. For example, one department may sell eatables, another may sell electronic goods, another may sell cloth and so on.

4. Centralized management: Although the building is divided into a different departments, the activities of every department are controlled, managed and financed by central management.

5. Size: Due to the nature of their business, department stores are frequently very big.

6. Large capital requirement: To open a department store, one must rent or buy a facility, stock it with merchandise, and then hire people to man each department.

You will agree with me that all of these required large capital.

7. Centralized buying of goods: Although there is decentralized selling of goods in departmental stores, the purchase of goods is highly centralized in departmental stores.

In department stores, the central management typically compiles lists of products that require replenishment before making bulk purchases from suppliers.

In short, department stores operate this way: Purchase of goods is made centrally by the management of the departmental stores while the selling of goods is decentralized into different departments.

8. Form of business organization: Since department stores typically have very big organizations, they are typically set up as joint stock companies.

Shareholders can buy and sell stocks in a joint stock companies.

A managing director typically oversees the operations of a department store.

9. High operating cost: Due to its scale of operation and scope of operation, the operating cost associated with department store are very high.

A department store must pay for advertising, the delivery of items from the producer to the store, a generator to power its operation, labor costs, and the provision of handy services like restaurants, among other expenses.

10. Sells on a cash basis: A departmental store only sells on a cash basis. They do not sell on credit to customers as they do not personally know each customer.

11. Convenience service: A department store usually provide a restaurant, toilet, telephone booth, and parking facility to enhance consumer satisfaction.

More so, most departmental stores offer home delivery of goods to customers.

12. Form of promotion: Departmental stores expend large money on advertisement to stimulate consumer demand.

13. Horizontal integration: A departmental store is horizontally integrated as it combines the selling of different goods under one roof. 

14. Mutual advertising: Mutual advertising exists in department stores because buyers are frequently attracted to the goods displayed in other departments.

There is every likelihood that customers will purchase items in addition to the ones they came to the business to acquire.

As a result, each department in a department store promotes the other department.

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