Hudson's Bay reopening Zellers a smart play, Guelph marketing professor says

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The resurrection of Zeller’s by Hudson’s Bay next year is a smart play by the former retail powerhouse, says University of Guelph department of marketing and consumer studies associate professor Dr. Tanya Mark.

Hudson’s Bay said on Aug. 17 it aims to bring back Zellers in 2023. The discount chain that was founded in 1931 and had over 300 stores at its peak in the 1990s. Most Zellers stores closed in 2013, with many becoming Target stores.

Hudson’s Bay has owned the Zellers brand since 1978 and will debut an e-commerce Zellers website and also place brick-and-mortar locations within some Hudson’s Bay department stores across Canada.

Following millions of dollars in quarterly losses, HBC, which also owns Saks Fifth Avenue and Saks OFF 5TH, went private in a $1.11-billion cash deal in March of 2020.

“Hudson’s Bay, like many retailers, is struggling to compete,” says Mark a professor at the Gordon S. Lang School of Business and Economics, where she studies customer experience, customer management and marketing strategy in the Department of Marketing and Consumer Studies. Mark also creates models to analyze how marketing activities and customer behaviour affect the allocation of marketing resources, the university says in a bio.

“They need to attract and retain customers to remain successful.”

Diversifying — such as going upscale with Saks and in the discount realm with Zellers — could help there. Mark also noted HBC has recently partnered with Mountain Equipment Co-op (MEC stores will open in three Bay stores this fall).

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Mark believes the return of Zellers will bring in new customers and “increase the value of the shopping basket for those who already shop at The Bay.”

That said, kingpins like Walmart and Amazon helped drive Zellers out of Canada in the first place, so, Mark cautions, to avoid that happening again and even to HBC itself, “It’s essential for The Bay to improve (the online) component of their business to remain competitive, especially post-pandemic.”

HBC has said the Zellers return will be a “digital-first shopping journey.”