A dozen Zellers locations are set to open across Canada on Thursday, a decade after the discount chain vanished from the country’s retail landscape.
Hudson’s Bay Company, which began the lengthy process of shuttering Zellers locations in 2013, announced earlier this year that it planned to resurrect the chain at 25 locations scattered across the country soon.
The first dozen are set to officially open on Thursday — nine in Ontario and three in Alberta — in a move that retail analysts say faces an uphill climb in a tougher-than-ever retail landscape.
“Department stores are in trouble, and have been for quite some time, in the sense that the way that we shop at them is fundamentally different,” said Joseph Aversa, who teaches retail management at the Ted Rogers School of Management at Toronto Metropolitan University.
That’s because the pandemic brought about a sea change in how Canadians shop, from the rise of online shopping to a split in physical stores between high- and low-end — with those in the middle getting crushed.
Aversa says it’s telling that, rather than launching standalones, the chain is building Zellers locations inside 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 square footage it already has.
“[They’re saying] in most of our stores, we have too much real estate for what we sell so this is maybe an option to try to shake things up a little bit.”
HBC says customers can expect a mix of products in the store, from housewares to toys, and from fashion apparel to a limited selection of furniture. Pricing will be based on what it calls a “rounded retail” strategy which means all items will be priced in round numbers like $1 — no extra cents added.
In the coming days, the nine locations in Ontario and three in Alberta will include food, too, as the chain teased in videos online that a “Zellers diner” branded food truck will appear at locations as they open.
Aversa says that speaks to how experimental the chain is being with its launch, and is clearly planning to cater to a sense of nostalgia since many of the former Zellers stores had sit-down restaurants inside them.
“But you need to be more than just nostalgic for me to come and give you my money,” he said.
Ela Veresiu, an associated professor of marketing at the Schulich School of Business at York University, says nostalgia can be a powerful marketing tool, but getting customers to come in and spend based on it is easier said than done.
“Converting nostalgia into a meaningful business model is how I see Zellers succeeding,” she told CBC News.
While the chain has its work cut out for it, Veresiu says if Zellers can get consumers who remember the brand in the door, and offer value to them once they’re there, they have a shot.
“Zellers already has the image in the marketplace as being a discounted retailer, whereas the Bay has the image of being a confused retailer that doesn’t know what it is anymore,” she said.
Nostalgia might play with Canadians who remember the brand, but Veresiu says it’s clear the chain also has plans to win over the younger generation by engaging with them where they are: online.
She notes that while a Zellers Instagram account sprung to life earlier this year, it already has almost 34,000 followers, despite having made only 18 posts — half of which were a photo collage showing the logo.
“They’re going the route of Wendy’s account to be highly humorous, to tease consumers… or potential consumers,” she said.
“If they can maintain this playful, light, funny tone, across their, their social media, and as well, with retro or nostalgic elements, I think that would go a long way to help guarantee their success and their sustainable business plan.”