The departmental store is a collection of shops under one roof with ownership of each shop or department specialising in selling a special range of goods. Each department normally buys separately, exercise its own stock control and sets its own product policy. It is also a large retailing unit handling a wide variety of shopping and specialty goods but organised into separate departments for the purpose of promotion, service and control. There is high degree of departmentalisation, e.g. Kingsway stores and Leventis stores where each department specialises in one line of product, e.g. electronics, clothing, sport equipment, etc.
Features of Departmental Stores
- Location in urban centres: Departmental stores are usually located in major towns in urban centres.
- Sells variety of goods: Departmental stores provide a wide range of variety of goods with its unit having its own manager.
- Shops under one roof: They comprise of a collection of shops under one roof.
- Provide one-stop shopping: Departmental stores do provide one stop shopping (i.e. customers stop and buy all their goods in one store.)
- Offers self services: Departmental stores do provide self services whereby customers serve or collect goods of their choice by themselves while shopping.
- Window display of goods: Goods are readily displayed in departmental stores for customers to pick with ease.
- Provision of price tags: Price tags are usually attached to all goods in departmental stores.
- Provision of special services: Departmental stores do provide special services for customers e.g. telephone, restaurants, etc.
- Beautiful layout: Departmental stores are carefully and beautifully selected their layout for goods to be displayed and also for customers convenience.
- Huge capital: Huge amount of capital is required to set up and operate departmental stores.
Advantages of Departmental Stores
- Wide range of specialized goods: There is a wide range of specialized goods on one location.
- Provision of special services: There is provision of special services such as restaurants, telephones, etc. for customers.
- Cheap prices: Departmental shop ensures bulk buying which can help to reduce price.
- Easy location: Departmental stores are located in busy city centres which make it possible for customers to locate.
- Freedom to move around: Departmental store allows freedom of customers to move around the store for proper view.
- Losses or gains may not be pronounced: The loss in a department stores can be offset with gains from other departments.
Disadvantages of Departmental Stores
- Huge capital: Departmental stores require huge amount of capital to set up.
- Involves high running cost: They involve high running cost as a result of special services provided.
- Impulse buying: The beautiful way in which departmental stores are arranged with their goods carefully displayed make the customers to buy certain goods which they did not plan to buy.
- Not accessible to rural customers: Departmental stores are not easily accessible to customers outside the major urban centres.
- Pilfery of goods: Stealing of goods in departmental stores is common if the activities of some customers are not checked.
- Attendants may not show courtesy: The store attendants may not show courtesy to their customers and may be indifferent to them.
- Higher prices of goods: As a result of the high running cost of operation, such huge over head cost may lead to high price of goods.
- Inability to bargain: Departmental stores place price tags on all their goods. This makes it impossible for customers to bargain for the prices of goods.