Q.2:- Discuss the features of a departmental store. How are they different from multiple shops or chain stores?
A departmental store is a large establishment offering a wide variety of products, classified into well-defined departments, aimed at satisfying practically every customer’s need under one roof. It has a number of departments, each one confining its activities to one kind of product. e.g., there may be separate departments for toiletries, medicines, furniture, groceries, electronics, clothing and dress material. Thus, they satisfy diverse market segments with a wide variety of goods and services. Some of the important features of a departmental store are as follows
(i) A modern departmental store may provide all facilities such as restaurant, restrooms, etc. In this way they try to provide maximum service to higher class of customers for whom price is of secondary importance.
(ii) These stores are generally located at a central place in the city, which caters to a large number of customers.
(iii) They are generally formed as a joint stock company managed by a board of directors as the size of these stores is very large.
(iv) A departmental store combines both the functions of retailing as well as warehousing. They purchase directly from manufacturers and operate separate warehouses thereby eliminating undesirable middlemen between the producers and the customers.
(v) All the purchases in a department store are made centrally by the purchase department of the store, whereas sales are decentralized in different departments. Chain stores or multiple shops are networks of retail shops that are owned and operated by manufacturers or intermediaries.
Under this type of arrangement, a number of shops with similar appearance are established in localities, spread over different parts of the country in contrast to departmental stores which are established at a central place in the city. These different types of shops normally deal in standardized and branded consumer products, which have rapid sales turnover. These shops are run by the same organization and have identical merchandising strategies, with Identical products and displays.