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.”
The problem I find with these Zellers pop-ups is the product is mediocre and not representative of the Zellers of the past. While nostalgia was a big part of why I visited the store, I found the product offering to be lacking. In some of the stores, it didn’t feel that different from just being another department inside Hudson’s Bay. And yes, I would likely visit a Zellers diner if they had those but as for the product, I have not purchased anything and didn’t really feel compelled to do so.
The one at Sherway is embarrassing. It was so small and had a few signs printed at staples. Barely anything available. Just looks sad.
The Victoria location seems to be expanding from a pop-up to a ‘permanent’ department taking up half of the fifth floor, but getting up there is an arduous journey with numerous escalators and elevators out of service. Not great.
The product range is unique and affordable, but narrow, and the brand’s reintroduction overall seems to have really overpromised and underdelivered. As the surveys indicated, a restaurant could add a social component to the experience and help make Zellers 2.0 more of a destination. In the case of my local store, the Zellers department is literally adjacent to a closed Hudson’s Bay restaurant, which seems like a missed opportunity to capitalize on one of Zellers’ biggest historic strengths.
I just want full size Zellers stores to return, these pop-ups don’t cut it. Replace some of the Bay locations entirely with Zellers locations as a start.
Many Canadians, including our household, have good memories of shopping at Zellers and are looking for an alternative to Walmart. But a pop-up is useless: a full-line Zellers store is needed. There are struggling Hudson’s Bay locations that could be converted (like Londonderry). Zellers makes sense as a replacement for Bay stores that are no longer viable in their existing format. For the “new” Zellers to be anything more than a mildly intriguing passing fad, HBC needs to roll out full-line locations stocking all the categories Zellers originally offered.
The pop-up locations were cool for a few months but the stock stayed the same. I’ve bought stuff from Zellers and been overall happy with the price and quality. They just don’t have enough selection to make it a regular place to shop. If they had full-line Zellers stores i’d be happy to shop there regularly. Some of the “pop ups” where really well done and other just felt like a after thought, shoving random merchandise in a corner of Hudson’s Bay, HBC should really convert a few Hudson’s Bay stores to full Zellers. That is what people are wanting. Not sure if that will happen though, if you go to the Zellers website or The Bay’s website… the Zellers page has been taken down and its just a category on The Bay’s website. That isn’t not very user friendly to shop. Overall The Bay’s website and stores are lacking merchandise that is exciting, its either junk or over priced tacky items…. just seems like they’ve lost their way and understanding of what made Canadian want to shop at their stores.
Canadian loves Zellers, you bring it up and everyone says they miss shopping there. Guess its a case of you don’t know what you have until its gone. HBC seems to think Hudson’s Bay is this upscale department store, but in reality most stores need a massive renovation and The Bay’s website is stuck in 2015. Some Bay stores scream upscale and other scream discount store. They should really convert some of the Hudson’s Bay stores into Zellers. If Giant Tiger can be successful i think Zellers can be as well. HBC knows retailing and has the infrastructure to add in Zellers. Assume the renovations from a Hudson’s Bay store to a Zellers would be cheaper then renovating a Hudson’s Bay (new flooring, white and red paint, new ceiling, new shelving, and add new stock). HBC could even add in a Hudson’s Bay department into a full line Zellers store. Vancouver, Edmonton, Calgary, Montreal, Toronto all have stores that could be converted to Zellers and still have a Hudson’s Bay store to service the city/ surrounding area.
Burlington closed the large one in the Burlington Mall when The Bay shut down at that location. There’s another Bay not far at the Mapleview Mall, but that Zellers is just a little pop-up. It’s frustrating because I would’ve shopped a LOT more at the one in the Burlington Mall if they had remained, and I would’ve even gone to Mapleview to shop at that location if they actually expanded it beyond a pop-up.
I don’t want to see Zellers give up though. I still want to see them expand!
Zellers signs have reappeared on the old Hudson’s Bay store in Edmonton Londonderry mall. Looks like they’re using the old Zellers logo. Craig we need a storey on Zellers! Who owns it now? What is going on Londonderry mall Zellers?!
I’m about to put out my article, Scott! 🙂
The story of Zeller’s and my memory of shopping there goes way back when the current young population have no memory of its popularity and why people shopped there. I liked the bargains that could be found there. Specifically the grocery aisles as soon as you entered then to the left the Zeller’s Cafeteria where you could meet and have a hot dinner or lunch with friends before shopping for those bargains you came for. The Pop Ups don’t quite give that same experience. But who am I to say what people enjoy today? In any event the glitzy decor of some of your pictures does not say bargains are here. Target made that mistake in thinking the customer wants sparkling clean red and white when they just want home comfort.