Zellers Festive Finale

Events, Seasonal and Short-Term (GOLD)

Client Credits: HBC Canada
Debbie Ford: SVP Zellers Marketing & Fashion
Jennifer Zedic: Director of Marketing, ISM & Social Media

Agency Credits: john st.
Angus Tucker: Co-Creative Director
Stephen Jurisic: Co-Creative Director
Keri Zierler: Copy Writer
Hannah Smit: Art Director
Cas Binnington: Digital Producer
Heather Crawley: Team Leader
Jared Applebaum: Account Supervisor
Joelle Woodruff: Account Executive
Shari Walczak: Director of Brand Experience
Allison Coggins: Digital Strategist
Mikey Richardson: Creative Director, Amoebacorp
Jeff Rae: Designer, Amoebacorp
Aria Novosedlik: Design Intern, Amoebacorp
Stacey O’Connor: Account Director, Amoebacorp
Dominique Anthony: Account Coordinator, Amoebacorp

Crossover Notes:
All winning cases contain lessons that cross over from one case to another. David Rutherford has been identifying these as Crossover Notes since CASSIES 1997. The full set for CASSIES 2013 can be downloaded from the Case Library section at www.cassies.ca.

Crossover Note 10. Conventional Wisdom—should it be challenged?
Crossover Note 12. Changing the Goalposts.
Crossover Note 17. Turning a liability into a strength.
Crossover Note 28. Media Learning.

To see creative, click on the links that are embedded in the case.

Section I — BASIC INFORMATION

Business Results Period (Consecutive Months):	November 1 – December 31, 2011
Start of Advertising/Communication Effort:	November 1, 2011
Base Period as a Benchmark:	November 1 – December 31, 2010

Section II — SITUATION ANALYSIS
a) Overall Assessment

Zellers is the country’s second largest discount department store and a Canadian icon.  But after years of under-investment and the entry to the Canadian marketplace of the U.S. behemoth, Walmart, the Zellers brand was fighting for its life.

And just as Zellers had started to turn the business around and address over-cluttered aisles, unfocused merchandising strategies and a disconnect with their busy-mom consumer, another U.S. retailer came knocking.

In January 2011, after over 80 years in operation, Zellers announced it would be closing its doors. American super-chain Target would be entering the Canadian market and taking on the majority of Zellers’ leases, leading to store closures beginning in early 2012.

But before that, there was the ever-important Holiday sales period.  For retailers, this can deliver 50% of total annual sales or more making it a critical time period to make their year and deliver on plan.

Given the abrupt timing of the deal and announcement, there was no forewarning for buyers and marketing and Zellers would be fully stocked for Christmas as usual.  But given the upcoming store closures and impending liquidation, corporate priorities had shifted from sales volume to profitability and the marketing budget was completely slashed leaving a fraction of the spend they had in the past. 

A corporate decision had also been made not to dramatically discount key holiday period traffic driving categories like consumables and electronics to protect profitability.  This would make getting people into the stores and spending money that much more challenging.

The public awareness of the imminent demise of the Zellers brand combined with the shift in business priorities created an unusual challenge for Zellers’ marketing and merchandising team. [Crossover Note 17]

1. How could we create excitement and energy (with consumers and employees) around Zellers’ last real holiday season and avoid it feeling like a funeral especially considering they would be operating stores through the end of 2012.
2. How could we drive traffic into stores without the advertising and high value offer tactics we had used to success in prior years and also deliver more to the bottom line? [Crossover Note 10]

b) Resulting Business Objectives

Despite the obvious challenges, the team at Zellers was not pulling any punches.  As Mark Foote, President and CEO at the time put it, “We need to be bold and irreverent and make this our best Q4 Ever.”

So, we put our heads down and set three primary goals for Zellers’ final holiday campaign:

First, we wanted to create a frenzy around Zellers’ 2011 holiday season and make it a shoppers’ must-stop destination.  Just like any other Christmas, Zellers had a mountain of merchandise to sell and we had to do it with less support and more profit.

The second objective was to build an online community that Zellers could leverage and communicate with into 2012 as stores began to move into liquidation.  This would be the last Holiday season for the Zellers banner as a whole but for many stores it would be business as usual until they went into liquidation and there were still 70 stores whose futures were uncertain and could remain open indefinitely.

Finally, there had been a lot of press coverage of Target’s leasehold purchase. Leveraging media interest in a manner that would drive sales and reflect positively on Zellers was important in keeping both consumers and employees engaged for the duration in what would be one of the biggest and most protracted retail liquidations in North American history.

c) Annual Media Budget
$500,000 – $1 million

d) Geographic Area
English Canada

Section III — STRATEGIC THINKING
a) Analysis and Insight

When the Target purchase was announced, there was considerable social chatter around it – from consumers who bemoaned the demise of another once great Canadian retailer to Zellers employees who were understandably worried about their jobs.

The common theme in the online dialogue was a kind of helplessness – a lack of control in this decision.  Consumers and Zellers employees felt like they were at the mercy of big business (and they were!)

Our insight was this:  let’s take something that was completely out of their control (a corporate takeover by a huge American retailer) and put it completely in their control. [Crossover Note 12]

We were going to put Zellers’s final holiday sale in the hands of their consumers.  Literally.

This approach played well into the challenge of not making what we called, our Festive Finale, feel like every other closing sale. As businesses wind down, they often employ tactics that scream desperation. Yellow and black signs, blaring announcers and pleas to shop conspire to make the effort feel like consumers are picking over the bones of a retail carcass. We wanted the Festive Finale to feel celebratory (rather than funereal) in keeping with Zellers’ personality and their need to continue operations for the following year.

b) Communication Strategy

Our limited budget took traditional holiday media vehicles like television and extensive weekly radio off the table. Instead, to really drive reach and awareness, we decided to take full advantage of the earned impressions that can be generated in social media while extending our message offline and into the press.[Crossover Note 28]

The bargain shopping mentality of our target suggested that social media would appeal to them on many levels.  Not only could it provide utility by offering “insider” information, we also saw the opportunity to drive them in to store by offering “exclusive” offers and online coupons. 

Through the use of john st’s proprietary Shopper Segmentation Study, we also knew that our primary shopper target was relatively active in social media with a presence on Facebook and Twitter.  They also actively use social platforms for ratings and reviews, reading discussion forums and perusing blogs.  Our initial scouting indicated that our target consumers were joiners and spectators, so we set expectations low on creation and contribution of content to the online and social community. 

Finally, in order to ensure amplification of our message, we knew the idea had to be unique and utterly surprising. It’s a retailer-eat-retailer world during the holiday season and every single one of our competitors would be outspending us in dramatic proportions.  If we weren’t able to deliver something breakthrough, impactful and engaging, our efforts would fall flat and Zellers would spend its last holiday season in obscurity.

Section IV — KEY EXECUTIONAL ELEMENTS
a)Media Used

The campaign consisted of the following elements:

• Facebook Microsite utilizing both native and customized functionality
• Facebook Ads
• Twitter Feed
• YouTube Channel featuring three (3) online videos to launch the campaign plus four (4) additional videos launched later in the campaign.
• Blogger outreach to seed videos and drive awareness
• Press release/media relations

b)Creative Discussion

The Festive Finale campaign launched on November 1^st with a video memo from the (fictional) Executive Managing Director of Zellers. He announced that with Target coming in, Zellers’ senior management was taking off early and leaving Zellers’ Facebook fans in charge of the store’s final holiday sale.

The video drove to the Zellers Facebook page, which acted as a hub for the entire campaign.  There, videos introduced two more employees: busy manager Carol, and quirky cashier Jason. They invited users to affect almost every aspect of the Festive Finale – from what items should be discounted, to the in-store music, to what festive accessories employees should wear and more.

Shoppers were even able to use Facebook to record and submit real radio commercials for a 3-day Moonlight Madness in-store event, the best of which were aired nationally. This was a Facebook first and testament to just how much control consumers had over the sale.

While Carol and Jason held down the fort on the Facebook page, the Executive Managing Director’s Twitter feed kept fans updated on what he was doing with his new life of leisure.

The content calendar was as ambitious as the program, and their Facebook followers began to add up.  Through a constant stream of weekly coupon votes, updated videos (we shot another 4 videos featuring the breakout star of the group, Carol), polls and questions posted on the Zellers Facebook wall, we built a highly engaged social community from scratch to 66,000. 

Other than some shout outs in the flyer and in store, the Festive Finale campaign existed exclusively on Facebook and no other media was used – an unheard of approach for a mass merchandiser during the holiday season.

c)Media Discussion

It’s already been stated that the lack of paid media is probably what is most notable about this campaign.

While a total of about $100,000 was invested in Facebook ads to drive traffic to the videos and Facebook page and blogger outreach, the tremendous success of this campaign was truly driven through viral means and earned impressions.

It was clearly the creative idea itself and its inherent humour and topicality that proved to be the engine behind the impressive reach and impact of the campaign.

Section V — BUSINESS RESULTS
a) Sales/Share Results

The Festive Finale exceeded our objectives on every single metric and most importantly rose to CEO Mark Foote’s challenge to deliver the most profitable Q4 in 10 years.

As a demonstration that social media can drive sales and profit, the Festive Finale hit the mark and contributed to an increase in profitability -– the client’s key objective – by 16% versus 2010.

Furthermore, in a challenging retail environment, Zellers grew overall sales by 2.5% versus Q3 while the Canadian General Merchandise category declined by 1.2% over the same period.  (Footnote 1)

(See Graph 1)

With respect to the Festive Finale specifically, the campaign drove $7.5 million in associated sales linked to exclusive Facebook coupon offers of which a staggering 229,000 were redeemed over an 8-week period.  Zellers proprietary data also indicated that the average Facebook Fan spent 2.5 times more on merchandise per trip than the average customer, spending over $70 per visit thus demonstrating the program’s contribution to the improvements in profitability for the banner overall.

Socially, the campaign was also a huge success in building an online community that is being leveraged through the remaining liquidation period all the way through 2012.

We built a Zellers fan base of 66,000 fans during the campaign, which we have since increased to almost 125,000 and it continues to be an important tool in driving store traffic, sales and liquidation communication.

Our fan base helped to deliver in excess of 16 million impressions for our Festive Finale posts and messaging through their social networks and our videos received almost 500,000 views on YouTube and were a trending topic on YouTube and Twitter.

Facebook ads drove 30% more traffic to the page than estimated based on industry standards and coupon engagement was off the charts – 28 times higher than the estimated rate.

Overall, we built a highly engaged social media community that was key to our success.  “People “talking about Zellers” – a key measure of consumer engagement – was 15%, 5 times the average rate in this category.

Finally, we certainly did leverage the media interest in the Target take-over and took control over it in a very positive way.  The Festive Finale received feature coverage in pretty much every single major national newspaper and television network in Canada and delivered 33 million media impressions. All press positioned Zellers as a brand turning what could have been a fairly morbid and depressing time into one of celebration and excitement.

We created a campaign that was both successful from a business perspective, and fun and engaging for holiday shoppers and Zellers employees alike.  It truly was a Festive Finale.

b) Consumption/ Usage Results

c) Other Pertinent Results

d) Return on Investment

Footnote 1: Statistics Canada, Retail Sales by Industry, August 2011 – January 2012.

Section VI — CAUSE & EFFECT BETWEEN ADVERTISING AND RESULTS
a)General Discussion

Given the fact that Zellers invested no additional funds in holiday marketing support in 2011 beyond standard issue weekly flyers and very limited radio supporting a 3-day sales event, the success of their holiday period is indisputably linked to our Festive Finale campaign.

This is further supported by the fact that Facebook fan transactions have been identified as a key driver of incremental sales and profitability evidenced by the fact that basket size was 2.5 times larger than average when an exclusive Facebook coupon was redeemed.

(See Graph 2)

b)Excluding Other Factors
Spending Levels:

Zellers reduced overall marketing budget dramatically in Q4, 2011 and evidenced by lack of mass media activity alone clearly spent a fraction of their competitors during this period.  

The only other activity in market during the holidays was their weekly flyer for which spending was held flat versus prior years.

When you consider that in contrast to the massive television and radio advertising spending of Walmart, Canadian Tire, Toys “R” Us and the other retailers in their competitive set during the aggressive holiday season, the potential limitations of the share of voice delivered by this social campaign would have put them at a distinct disadvantage relative to prior years.

Pricing:

There was no pricing activity unique to Zellers that would have driven this huge success.  In fact as stated earlier, a corporate priority on profitability had eliminated excessive pricing activity proven to drive traffic in the past.

Distribution Changes:

There were no new stores opened or stores closed during this period that would have skewed the results.

Unusual Promotional Activity:

There was no promotional activity during this period that would have given Zellers an advantage over their competitors.  All retailers engage in promotional activity during the pre-Christmas season and engage in aggressive clearance activity between Christmas and New Years.

As stated previously, Zellers would have actually been at a disadvantage from a promotional activity standpoint, as they were not engaging in the same high impact discounts of their competitors given the corporate focus on profitability.

Further, Zellers would have also been disadvantaged by the fact that all promotional activity related to this campaign was limited to the confines of Facebook and Twitter which would have theoretically significantly reduced the reach potential of their message relative to their counterparts that were heavily invested in television, radio and print media during this period.

Other Potential Causes:

One might hypothesize that another potential driver of success is the mere fact that given the press around the Target purchase, consumers were expecting better deals at Zellers and this contributed to the success of the campaign.

Given the extent of the traffic and sales volume reflected in this case that could be linked directly to the Facebook activity vis-à-vis coupon redemption, this has been ruled out as a detractor from its success.