The departmental stores is a modern shop -undertaking the business of retail on a large-scale, upon which there is the ownership of only a single individual or body. Ordinarily, it is a group of various retail shops which are located in one single building. In the departmental stores, the things of customers' needs, from the smallest to the biggest, are sold. Various facilities are granted to the customers by the departmental stores, for instance, cafeteria, waiting room, hair-cutting saloons, libraries and reading rooms, etc. Various scholars have differently defined the departmental stores, as being given hereunder :
In the opinion of J. Stephen, Under one and the same building, it is a very big stores which deals in the items of various kinds.
In the opinion of Clark and Clark, It is a sort of organization undertaking retail business which resorts to carrying on business of products of various kinds under the same roof. These items are divided into specific departments which are centrally inter-related.
In the opinion of Thomas, The departmental store is a large retail-house in which, within one single building there, are several departments. Each department deals in a specific item or product and is a complete unit in itself.
On the basis of the above-given views, we may say that the departmental store is the retail commercial organization undertaking the business of various kinds of products whose control and ownership vests within a private body.
Characteristics of Departmental Stores
Some of the main characteristics of departmental stores are as follows :
(1) Central Location in Big Cities. The departmental stores are mostly situated in big cities at such places where the customers could easily visit for purchasing the goods.
(2) Sales of Varied Items. In these stores, t]-e products of varied needs of the customers, are sold.
(3) Useful Only for Rich Customers. In the departmental stores, mostly the luxurious items are sold, i.e. these are suitable for only the prosperous people.
(4) Central Ownership. Despite the existence of various departments in the departmental stores, their ownership and management vests in a specific unit.
(5) Personal Service to Customers. By these stores, various services are provided to the customers free of charge, for instance, the facilities of entertainment, postal and telephonic facility, cafeteria and reading-room, etc.
(6) Sales of Products on Prices Much Higher Than the Prevailing Ones. The managerial and administrative expenses, publicity expenses and the rent of the premises, etc. of these stores are very high. Due to this reason, the prices of the items, sold by these stores, are much more than those of the market commodities.
(7) Separate Departmental Manager for Each Department. In the departmental stores, for the management and administration of each department, a manager is separately appointed.
Organization and Management of Departmental Stores
Usually, the departmental stores are organized and managed on the lines of the joint-stock companies. Regarding the establishment and organization of the departmental stores, the following matters must be kept into consideration :
(1) Locality and Situation. These stores should be located in such cities of the country which have sufficient population of the prosperous-and advanced people, of luxurious taste. These should be located in the heart of the city or at such places where mostly the aristocratic and wealthy people live. The objective of these stores is to attract the customers, hence much attention is paid on the internal and external decoration of these stores.
There are various departments in the departmental stores which despite being separate from each other, are mutually inter-related.
(2) Organization and Management. Due to the need of excessive capital and the large-scale of business, the departmental stores are set-up on the lines of the joint-stock companies. Like a company, where a board of directors determines the policies, in it, are a managing director and a manager. Under the charge of the manager, there are the departmental managers and employees (staff). There are separate accountants for maintaining the accounts and records of each department.
(3) Purchase and Sale System. In the departmental stores, the manager of every department is allotted a specific sum of money in the beginning of every month, for purchasing the goods and items. Every department consists of efficient male and female sales persons, who try to attract the customers. The sale of items is undertaken for cash as well as on credit by each department.
(4) Method of Sale and Accounting. With the aim of enabling the managers of each department maintain the accounts properly, they are supplied with separate cash-memo books. In case of the cash sales, two copies of the items sold to customers are prepared out of which one is kept by the cashier and the other is given to the customer. By showing this, on the gate, the customer could take away the items with him. In case of the credit sales, two copies of the invoice are issued out of which only one copy is left with the customer. Some of the stores also supply the items to the customers on the home-delivery basis. But for this service, charges are separately levied.
Every day, each department tallies its cash balance with the sales book and later on, necessary entries are made at the proper place in the books. The detailed and complete statement of credit and cash sales of all the departments is submitted to the Accounts Section through which, in the end of the trading year, the Profit and Loss Account and the Balance Sheet could be easily drawn up.
(5) Personnel Policies. Due to a large number of employees working in each or different departments, for their appointment, a special official is appointed who is known by the name of 'personnel manager'. This official is the head of the personnel management department upon whom lies the responsibility of the appointment of the employees, their promotions, salaries, training and their transfers on inter-departmental basis.
(6) Separate Stores for Storing the Products. In a departmental stores, purchases of the items are made on a large-scale. Some part of the purchased goods is sent to the concerned departments for being sold out and the remaining stock is kept in the stores separately. The total management of this godown or stores, is undertaken by a separate godown in charge. The detailed record pertaining to the goods or items stored, and the complete account of the consumption, is maintained in the godown register.
Merits of Departmental Stores
(1) Advantages of Large-Scale Purchases. Ordinarily, the departmental stores resort to the bulk purchases directly from the producers or manufacturers. Therefore, they are able to get good products at lower prices. For the purchase of products, the purchase manager is separately appointed.
(2) Selection of Favorite Items by Customers. In the departmental stores, due to the availability of various kinds of one and the same product, the customers are able to select the desired and favorite items in their own way.
(3) Benefit of Services of Efficient Employees. Due to the excessive financial resources of the departmental stores, they are able to derive the benefit fit of services of the experienced and competent experts. It increases the efficiency of work.
(4) Personalized Services to Customers. The departmental stores variously serve their customers. These services are not re-fated in any way to the sales of the things, for instance, reading room, bath-room, toilets, hair-cutting saloons, etc.
(5) Economy in Administrative and Managerial Expenses. The administration and management of the departmental stores is undertaken by experienced personnel, quite efficient in their working. Hence there is economy in expenses of such stores.
(6) Effective Publicity. In the departmental stores, due to the mutual arrangement of advertisement of one department by the other one, the costs of publicity are very much less. In it, due to the taking-up of advertisement work for the whole departmental stores at one and the same time, the total expenses of advertisements are much lower, and the advertisement is also quite effective.
(7) Maximum Sales Due to Centralized Location. The departmental stores are mostly located either in the commercial areas or in the heart of the big cities. The people from all the parts of the city come here to purchase the desired items. So there is the increase in the sales of the departmental stores.
(8) Facility of Home-Delivery Service. With the aim of increasing their sales, the departmental stores also extend the facility of home-delivery service to their customers.
(9) Sale of the Standardized Goods. Mostly, the departmental stores lead to the sale of the products of standardized or good quality.
Demerits of Departmental Stores
(1) Need of Excessive Financial Resources. Big building or premises, excessive capital, innumerable products, and many employees are-needed for the departmental stores, which could possibly be provided by the rich persons only.
(2) High Prices of Things. Due to the higher running expenses, free services, and exorbitant rent of the premises, etc., the prices of the commodities exceed much more than that in the market. Hence, these could be appropriate only for the wealthy people.
(3) Limited Business Jurisdiction. These stores are run only for the meeting of the needs of rich people. The departmental stores don't bother about the requirements of the petty customers. Due, to this factor, their business sphere gets very much reduced.
(4) Difficulty in Getting Suitable Premises. For the departmental stores, a suitable and attractive premises is required, the availability of which is very difficult and expensive.
(5) Inconvenience to the Distant Customers Due to Unsuitable Location. Their location is in the heart of the city or on such places where the prosperous and aristocratic persons mostly live. Hence, it becomes very difficult for the distant customers to reach these stores.
(6) Lack of Personal Contacts With the Customers. Due to a larger number of the customers, the departmental stores are unable to establish the personal contacts with them. The employees of these stores remain concerned with their salary only.
(7) Less of Customers' Service Approach. It is not necessary that these departmental stores must be running in profit, so these stores are unable to render so much of the service to the customers, as the other retailers or petty traders are able to provide to them.
(8) Lack of Credit Facilities. Due to no personal contacts with the customers, they are not provided with the credit facilities. It adversely affects the whole of their turnover (sales).
Departmental Stores in India
The departmental stores are an outcome of the western rich countries. As compared to the developed countries, these have worked less in our country, since here is the scarcity of rich and luxury-loving people. The majority of India's population is passing its life of a poor and lower type. These stores have been able to make progress only in such cities of the country where most of the people are of aristocratic and prosperous type.
Also in the advanced countries, due to the competition of the retailers, these stores are gradually disappearing. In India there is the lack of such places and cities where suitable customers could be available for them. The Indians, due to their monetary circumstances, intend to purchase cheaper goods while such an expectation could not be met by the departmental stores. Competition with the retailers has to be faced. Further, there is the lack of unity amongst the traders of our country. They don't like to work together. Due to all such factors, there is the scarcity of the departmental stores in India. As a result of the industrialization in our country, with the increase in the income of people, the future of the departmental stores seems to be bright.
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