As more consumers are looking to save money by shopping at discount retail stores, Hudson’s Bay Co. has announced the return of Zellers. HBC says it will debut a Zellers eCommerce site as well as expand its brick-and-mortar footprint in select HBC department stores across Canada early this year.
This comes approximately a decade after HBC closed most Zellers locations. In 2011, HBC sold most of its Zellers leases to Target. However, as many remember, Target’s Canada rollout did not go according to plan.
Zellers is now returning in what HBC describes as a “digital-first shopping journey that taps into the nostalgic of the brand.”
But more than just trying to exploit nostalgia, HBC is taking advantage of two major trends: eCommerce and discount retail. For brands, this is an exciting opportunity to join.
Here’s what you need to know.
Between inflation, increased consumer debt, slow wage growth, and other issues, discount retail stores are becoming popular options for Canadians. Customers are moving away from the middle of the market towards either discount retail or luxury.
Giant Tiger, for instance, has experienced tremendous growth in the last couple of years with a strong online presence and over 260 stores across Canada, selling clothes, seasonal merchandise, and grocery.
In the past, many brands have been hesitant to work with discount retail chains out of fear it may hurt their brand perception. However, this is shifting as the stigma of shopping at discount retail is lifted and consumers become more focused on price points.
HBC clearly wants to leverage Zellers brand as a discount retailer, which peaked in the late 90s with approximately 350 locations.
Discount Retail and eCommerce
But more than just cashing in on nostalgia, HBC is leaning into eCommerce for its Zellers relaunch. Until recently, most discount retail sites were sparse, but eCommerce offers exciting new customer experience options for discount retail.
One strategy to inspire shoppers is to use curated categories around a particular theme. For instance, Savers will have a tap at the top of their website dedicated to a theme of “Sun & Holiday” where shoppers can browse items like sunscreen, towels, flip-flops, etc.
From there, sites can encourage shoppers to bundle purchases with cheaper delivery based on how much they spend. So, a $20 cart means standard delivery of $5, but $50 means free delivery.
There is a lot of omnichannel potential for discount retail and it will be exciting to follow how HBC takes advantage.
Looking to Break Into Discount Retail?
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