A dozen Zellers stores opened across Canada on Thursday, a decade after the discount chain disappeared from the country’s retail landscape.
The Hudson’s Bay Company, which began the lengthy process of closing Zellers locations in 2013, announced earlier this year that it plans to soon revitalize the chain at 25 locations across the country.
The first dozen opened its doors for the first time Thursday — nine in Ontario and three in Alberta — in a move that retail analysts say faces a steep climb amid a tougher retail landscape than ever before.
“Department stores are in trouble, and have been for quite some time, in the sense that the way we shop from them is fundamentally different,” said Joseph Aversa, the retail manager at the Toronto Metropolitan’s Ted Rogers School of Management university teaches .
That’s because the pandemic has fundamentally changed the way Canadians shop, from the rise of online shopping to a split of physical stores into high- and low-end stores – with those in the middle crushed become.
Aversa says it’s significant that rather than launching standalone products, the chain is building Zellers locations in Bay stores. That’s likely because parent company The Bay is trying to find innovative ways to drive customers to hundreds of thousands of retail spaces it already has.
“[They’re saying] In most of our businesses, we have too much real estate for what we’re selling, so maybe this is an option to try and shake things up a bit.”
CLOCK | Zelles is back in business in Canada:
HBC says customers can expect a mix of products in store and online at zellers.ca, from homeware to toys and from fashion clothing to a limited selection of furniture. The chain is launching a new private label called ANKO, but will also offer products from a variety of name brands.
Pricing is based on what’s known as a “rounded retail strategy,” meaning all items are priced in round numbers like $1 — with no extra pennies.
From the retro logo to the presence of Zellers Diner-branded food trucks outside of launch locations – a nod to the restaurants that used to be in Zellers stores – the entire introduction plays with a sense of nostalgia for something that consumers have lost. And that is very intentional.
“Canadians have never forgotten Zellers,” the chain’s marketing vice president Shelley Tangney said in an interview with CBC News on Thursday. “Love never went away.”
That was certainly the mood at a Toronto store on Thursday, as Canadians with fond memories of the chain lined up for their first glimpse.
“I wanted to know what the hoopla is,” Helen Sheppard said. “I was curious to see how many people love Zellers as much as I do.”
Sheppard is like many shoppers who came to take a look for the nostalgic connection, but she says she needs to see savings to keep coming back. “Price is a big issue for me because living on a small budget I need to manage what I can afford this month rather than checking off my list,” she said. “I’m trying to hold myself back.”
Another shopper, Len Donalds, told CBC News he also has fond memories of the chain, but says it takes real value for him to become a loyal shopper. “Price is very important,” he said. “Everything is so expensive these days, food and clothes, you have to try to get the best bargain you can get.”
Tangney said the chain has seen potential in the discount space since Target went bust in 2015. “After listening to feedback for many years, it just made a lot of sense to fill that gap,” she said.
Ela Veresiu, associate professor of marketing at York University’s Schulich School of Business, says nostalgia can be a powerful marketing tool, but getting customers to come and spend on that basis is easier said than done.
“Turning nostalgia into a meaningful business model is, I think, Zellers’ success,” she told CBC News.
While the chain has its work cut out, Veresiu says if Zellers can get consumers who remember the brand in the door and offer them value once they get there, she has a chance.
“Zellers already has the image of a discounter in the market, while Bay has the image of a confused retailer who no longer knows what he is,” she said.
Nostalgia may play with Canadians remembering the brand, but Veresiu says it’s clear the chain also has plans to wow the younger generation by interacting with them where they are: online.
She notes that a Zellers Instagram account, launched earlier this year, already has nearly 34,000 followers, despite only having 18 posts – half of which were a photo collage featuring the logo.
“They go the route of Wendy’s report to be very humorous, to tease consumers … or potential consumers,” she said.
“If they can keep that playful, light, fun tone on their social media and also with retro or nostalgic elements, I think that would go a long way towards guaranteeing their success and sustainable business plan.”