A department store combines categories that elsewhere are separate stores: fashion, beauty, home, electricals, toys, food and more, each with its own buyer, suppliers, seasons and margin. Some departments the store runs itself; some are concessions or shop-in-shops where a brand's stock, and sometimes the brand's staff, occupy the store's space under a commercial arrangement, and the store's income is a share of sales, a rent, or both. The customer sees none of this: one entrance, one loyalty card, one gift card, one till. With Pentoggle, a department store can describe how its departments and concessions actually work and generate the starting application around it.
This page is for the department store, whether a single large store or a small group. Departments within a grocery operation are Supermarket Software. A chain of similar stores is Multi-Store Retail Software. The mechanics of brand-owned stock are Retail Consignment Management Software, and of a single customer across channels are Retail CRM Software and Retail Loyalty Program Software.
Concession and shop-in-shop arrangements are commercial contracts whose structure, and whose accounting and tax treatment, differ by agreement and by place. This page describes the operational workflow and states none of that. Establish the terms with a suitable adviser and the treatment with your accountant.
Most department stores already run an accounting system, a multi-till POS, and the systems of the brands operating concessions. Those stay where they are. What is often still managed outside them is the join: each department as a business, each concession as an arrangement with its own numbers, and the customer who bought in three departments and one concession and expects the loyalty balance to know it.
Key takeaways
- Each department is a business with its own buyer, rhythm and margin, and the store's result is the sum of them. A store-level view blends fashion's season with beauty's replenishment and home's ranges and describes none of them.
- Concessions come in several models, owned stock, consignment, space rental, brand-staffed, and each needs its own record of whose stock, whose staff and what the store earns.
- The customer is one customer across the building. Loyalty, gift cards, returns and service have to work in every department and every concession, or the store is a mall with a shared roof.
- Space is the store's scarce asset, and sales and margin per unit of space by department and concession is the number that decides who gets more of it.
- A useful number is department and concession margin per unit of space, read alongside the value of concession settlements outstanding and their age.
How a department store makes money
A department store earns in two ways at once. On its own departments, it earns a retail margin on stock it buys, ranges and sells, with each department's margin shaped by its category: fashion by full-price sell-through, beauty by repeat and brand support, home by ranges on a cycle, electricals by attachments and support. Each department has a buyer whose decisions decide that margin, and each runs on its own calendar.
On concessions and shop-in-shops, the store earns differently depending on the arrangement. Where the brand's stock is sold through the store's tills on consignment, the store earns a share of the sale and settles the rest to the brand. Where the brand occupies space and runs its own till, the store earns a rent, a share, or both. Where the brand supplies staff, the store's cost is lower and its control is too. The arrangement decides what the store's record needs to hold: the stock as the brand's or the store's, the sales as the store's or reported by the brand, the staff as the store's or the brand's, and the settlement as a share out or a rent in.
Across both, the store earns on the customer as a whole. A loyalty scheme that works in every department, a gift card redeemable anywhere in the building, a store card where offered, and services such as delivery, alterations, personal shopping and restaurants make the store a destination rather than a collection of shops, and they raise the basket across departments.
Space is the asset underneath all of it. Every department and concession occupies floor, and the store's central decision is who gets how much. That decision needs sales and margin per unit of space, by department and by concession, on the same basis.
The cost rhythm that runs against it
Own departments run on their categories' rhythms: seasonal buys committed ahead in fashion, replenishment cycles in beauty and food, ranges introduced and cleared in home, supplier support to claim in electricals. Each has its own deliveries, its own receiving, its own markdown calendar and its own count.
Concessions run on the brand's rhythm and the store's contract. Stock arrives as the brand's, is merchandised to the brand's standard, sold through the store's till or the brand's, and settled on a cycle. The store carries the space, the services and often the till, and the brand carries the stock. Settlement is a calculation the brand will check.
Shared services run across everything: tills and cash handling, customer service and returns, delivery and collection, security, cleaning, the loyalty scheme, and the building itself. Their costs have to be attributed to departments and concessions on a basis that is fair and known, or the department margin is a fiction.
Labour is department-specific and shared at once: department staff with category knowledge, concession staff who may be the brand's, and floor and service staff who belong to the store.
Set against a result that is the sum of many businesses, this rhythm means the store needs each department's stock, sales, margin and calendar as its own record, each concession's model, stock ownership, sales and settlement held per arrangement, shared costs attributed on a stated basis, and one customer record, loyalty balance and gift card that work everywhere.
Where the record usually breaks
A department store's POS records the sale by department. The breaks are in the concession, the customer and the space.
When the concession's numbers are the brand's
The brand reports what it sold. The store settles on it. What stock the brand brought in, what left, and whether the report matches what went through the till is checked against the brand's own figures or not at all.
When the customer is a department's customer
A customer buys in fashion, beauty and a concession in one visit. The loyalty points land on one purchase, the gift card will not work at the concession, and the return of the beauty item has to go back to the beauty counter.
When space is history
Departments occupy the floor they have always had. A department earning less per unit of space than the concession next to it keeps its floor because nobody has the comparison.
When shared costs are an average
Delivery, security, cleaning and the loyalty scheme are spread evenly. The department that uses delivery for every sale and the one that uses it for none carry the same charge, and both margins are wrong.
What department store software holds
Departments as businesses
Each department with its buyer, suppliers, stock, sales, margin, markdown calendar and space, rolling up to the store, with the category-specific workflows it needs.
Concessions and shop-in-shops
Each arrangement with its model, whose stock, whose till, whose staff, and the settlement basis, share, rent or both, with the stock held as the brand's where it is.
Concession settlement
Sales through the store's tills attributed to the concession, or the brand's reported sales captured and compared, with the settlement calculated on the agreed basis and a statement the brand can reconcile.
Stock by floor and location
Every unit, owned or the brand's, held by department, floor and location, with states, so stock moved for a display or an event is not lost.
One customer
A single customer record, loyalty balance and gift card across every department and concession, with purchases attributed to departments and returns accepted at any point.
Shared services attributed
Delivery, alterations, customer service, security and other shared costs attributed to departments and concessions on a stated basis, so margin by department is honest.
Space
Floor area by department and concession, with sales and margin per unit of space on a common basis, and the history of space changes.
The director's view
Sales, margin and margin per unit of space by department and concession, settlements outstanding by brand and age, loyalty and gift card activity across the building, on a phone.
Workflows this business depends on
- Retail Consignment Management Software, because concession stock is often the brand's, settled on what sold, and the brand needs a statement the store can stand behind.
- Retail Margin Management Software, because each department's margin after markdowns, returns, shrink and attributed shared costs is the number the space decision rests on.
- Retail Loyalty Program Software, because a scheme that works in every department and concession is what makes the building one store.
- Retail Gift Card Management Software, because a gift card has to be redeemable across departments and concessions with different ownership, and the balance is one obligation.
- Retail Returns Management Software, because a customer expects to return anywhere in the building, and the item has to go back to the department or the brand that owns it.
- Retail Payment Reconciliation Software, because many tills and, where concessions run their own, several takings streams have to be reconciled to the store's bank and to the concessions' settlements.
- Retail Employee Scheduling Software, because staff are trained on specific departments and coverage has to be met by department, not only by headcount.
- Retail Store Audit Software, because a large floor across many departments and concessions needs standards walks, and concession standards are contractual.
Why department stores choose Pentoggle
Departments as the businesses they are
Each with its own buyer, calendar, stock and margin, rolled up to the store, with the workflows its category needs.
Concessions held per arrangement
Whose stock, whose till, whose staff and what the store earns, with a settlement the brand can check.
One customer across the building
Loyalty, gift cards and returns that work in every department and concession, so the customer sees one store.
Space as a measured asset
Sales and margin per unit of space by department and concession on a common basis, so the floor decision has a number.
Sits around your accounting, your tills and your brands
Your accounting system continues handling the books, with concession treatment set by your accountant. Your tills continue at the counters. Brands continue running their concessions their way. Pentoggle holds the departments, the arrangements and the customer between them.
A useful number for a department store
Department and concession margin per unit of space, read alongside the value of concession settlements outstanding and their age.
The first is the store's central decision made measurable. On a common basis, after markdowns, returns, shrink and attributed shared costs, it shows which departments and concessions earn their floor and which do not, and it is the basis for a space conversation rather than a history.
The second is the store's relationship with its brands as a receivable or a payable, depending on the model. Settlements outstanding, by brand and by age, show whether the concession business is being administered or accumulating, and an ageing balance in either direction strains the arrangement.
Read cross-department customer share beneath both: the share of customers who bought in more than one department or concession in a period. It is the evidence that the building is working as one store.
Ready to build department store software?
You know what each department sold last month.
You may not be able to say which concession earns less per square metre than the department beside it, what you owe each brand and for how long, or how many of your customers shop in more than one part of the building.
Describe your departments, your concessions and their arrangements, and how your customer moves through the store to Pentoggle in plain English and generate a working first version in hours, then refine it around your process.