A recent survey by market research firm Leger found that 56 per cent of Canadians are aware of the new Zellers stores inside Hudson’s Bay but only nine per cent have shopped at or browsed the new concept. Zellers was relaunched with shop-in-stores at Hudson’s Bay in March of 2023.
Leger polled 1605 Canadians last week for the study for Retail Insider.
Luc Dumont, Senior Vice President of Insights for Leger, said the survey results showed that the Zellers brand is still iconic.
“Canadians hold the brand dearly in their hearts,” said Dumont. “But only a fraction are stepping through its doors or visiting the pop-up stores.
“My biggest takeaway is that there’s a pretty big divide between that nostalgia part and actual foot traffic. We saw that over half the respondents that we spoke to were aware of this relaunch but only about one in 10 have either shopped or even browsed at these stores within the Hudson’s Bay.”
The survey found that:
- Nine per cent said they’ve noticed the new Zellers stores during their visits to Hudson’s Bay but haven’t shopped or browsed there;
- 38 per cent said they know about the new Zellers stores but haven’t seen them in person or visited their webpage;
- 30 per cent said they were familiar with the Zellers brand but were not aware of the new stores inside Hudson’s Bay; and
- 11 per cent said they weren’t aware of Zellers before this survey.
The perceptions of Zellers stores were:
- I feel a sense of pride in Zellers as a Canadian brand: 16 per cent disagreed, 41 per cent agreed;
- I am excited about the return of Zellers and its offerings: 19 per cent disagreed, 41 per cent agreed;
- I would visit the Zellers stores more frequently if restaurants were introduced at their locations: 26 per cent disagreed, 30 per cent agreed;
- Products and brands available at the new Zellers stores are of high quality: 14 per cent disagreed, 22 per cent agreed; and
- Zellers offers better value for money compared to other stores such as Walmart, Marshalls, HomeSense or Dollarama: 19 per cent disagreed, 19 per cent agreed.
Bruce Winder, Retail Analyst and Author, said the Leger study confirms what most people were thinking- that although Zellers has some affinity with Canadians overall, the current offering falls short.
“The most important metric in the study is the Net Promoter Score which is extremely poor. This talks to the lack of appeal of the current concept and its lack of clear value proposition and differentiation. Customers aren’t recommending the store to others. With no apparent advertising for the brand, save publicity upon launch, without a high NPS, the offering stalls,” he said.
“Another critical measure is shopping frequency. One can’t make money unless one’s customer’s shop at a store – online or in person) often. The economics don’t work, especially for the price points they are selling. It is interesting how the restaurant keeps coming up. So many great memories of eating at the diner with loved ones perhaps?
“The question for HBC now is what to do with the brand? Do they try and build upon the positive aspects of the research or shut it down? It will partially depend on the incremental cost to operate Zellers versus the incremental cash flow the concept generates.”
Dumont said other retail giants like Dollarama, HomeSense, Marshalls and Walmart have since taken the place of Zellers in the years that Zellers was not present.
“And we see that in some of the measures that we had in the survey in perceptions of value and product quality,” he said. “Despite that strong national pride, the store’s revival faces skepticism on quality and value,” he said.
“So I think in the intervening years there were other players that took up that mind share.
“The media did a pretty good job of talking about the launch and getting people to be excited but I just don’t think that translated. Part of that could be also that there were initially very few Bay locations that had this happening. So the exposure just wasn’t there.”
Lisa Hutcheson, Managing Partner of Toronto-based consultancy J.C. Williams Group, said that the food trucks were initially a draw but that it was a temporary boost to the brand.
“There was a big buzz on the food trucks at the early openings, which seemed to fizzle out. We only saw one at the Scarborough opening (which happened to be terrible weather that day). Moreover, there was the promise of actual restaurants opening in 2 provinces, to my knowledge they never opened.”
“With regards to the restaurant, I think that respondents are remembering cheap comfort food for their family, not necessarily the Zellers Family Restaurant (and The Skillet before that). Are people missed the nostalgia – the good ‘ol days – or the cheap comfort food?”
Hutchinson questioned the strategy around the new Zellers retail spaces, which are a mix of pop-up and more permanent locations.
“It is interesting that while there are locations touted as more permanent stores, there was also many considered pop-ups. The idea of pop-ups does typically entice customers with a sense of urgency as it is only there for a limited time. However, the Zellers pop-ups seem to be more space fillers in what would otherwise be dormant space in the store.
“Calling these locations pop-up is also a way of essentially testing the viability of the location and at the same time may be a way to move goods that aren’t selling in other locations. Another consideration when marketing as a pop-up is that the investment into the space including merchandising fixtures and signage can be done at a very minimal cost.”
