Zellers tweaks select categories

DSN Retailing Today,  Feb 9, 2004  by Mike Duff

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BRAMPTON, ONTARIO -- Zellers has revisited stationery and some related businesses to make them more convenient and easier for customers to shop. The effort is just one of several Zellers has planned that will allow it to capitalize on information and distribution refinements in merchandising its stores.

"We're beefing up stationery," said Bruce Dinan, senior vp of merchandising. "We've focused aisle by aisle on what the customer is doing."

Essentially, Zellers is reorganizing the department in line with how customers look at products rather than how retailers purchase. Thus, the company has developed a kid's art section, including items like crayons and colored markers that once might have been placed in separate displays.

The home office section of the stationery department includes storage items, copy/printing suppliers and photo storage and labeling element. The greeting card/wrapping paper section includes more than a half gondola of gift bags, another one of those convenience products that has grown in popularity lately.

While stationary has been more thoroughly reorganized, other departments at Zellers have been subject to limited updating. For example, candles and accessories have been repositioned on standard gondolas after once being tested in more elaborate boutique settings. Indeed, Zellers has experimented with other home decor segments as well to see how elaborated merchandising affected sales. In the case of candles, merchandising may be more in line now, but still includes wood finish signage over the display to create a relatively refined look.

Home will be more thoroughly remerchandised later this year. Jamie Spreng, an analyst with Canaccord Capital Corp., said that the departure of the Martha Stewart brand from Zellers last year and the expansion of its own captive labels created an impetus for the retailer to update its home goods merchandising, despite that being among the most sophisticated among North American discounters. In December, in its latest proprietary brand launch, Zellers launched Stuff by Duff. The teen-targeted line is associated with actress Hillary Duff and includes apparel and home goods elements.

Zellers also has more and better information to act upon as it has upgraded data and logistical systems, and putting that into play more frequently makes sense. Spreng noted that Zellers wants to generate more traffic and frequently freshening up merchandising can create a degree of curiosity among potential shoppers, getting them into the store more often. Zellers' remerchandising of home, for several reasons, is timely.

"It's something you need to do regularly--try to find ways to improve performance and productivity," Spreng said. "The Bank of Canada lowered its interest rate a quarter of a percentage point. That's not a lot, but it will put a few more homebuyers into the market. Certainly, home should be strong category. Everyone should be looking at their offering."

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