For Mothercare to survive it needs to reignite its reputation as a trusted specialist by outperforming competitors on customer service and instore experience. Its proposed CVA to close 50 stores and reduce rent on 21 others, alongside cash generation from shareholders, is necessary but will not guarantee a profitable future.
Readdress specialist expertise
Having children requires parents-to-be to educate themselves on parenting – something Mothercare has failed to exploit in recent years. Instead the need to cut costs has hindered investment in staff and consequently parents have little reason to visit the specialist over lower-priced competitors. GlobalData’s baby equipment 2018 survey showed that one in five baby equipment shoppers asked for advice instore when researching what to buy – showing demand for expertise. Mothercare needs to provide parents with informed advice to help restore the brand’s reputation and set it apart from online competition. Creating staff specialisms such as feeding or travel experts will help reassure customers.
Customer service is especially important as John Lewis ties up with popular US-furniture retailer Pottery Barn for a kids range and the retailer’s new experience desks offers a baby-consultation service.
Become competitive again
In baby clothing, value retailers such as Primark and the supermarkets outshine Mothercare on price. The baby specialist attempts to justify higher prices through partnering with celebrities and designers such as its My K by Myleene Class range. However, it should lower the price of its core Mothercare range as, according to GlobalData, price, value for money and quality are the three leading drivers when selecting a retailer for childrenswear.
Competition is set to become tougher as ÏD Kids – a value children’s retailer selling clothing and toys – enters the UK with its first store opening last week beside a Mothercare in Wandsworth. ÏD Kids hopes for at least 50 stores in the UK and, as a new entrant, has the benefit of no legacy stores and can cherry pick the best retail locations.
In baby equipment, Mothercare is under pressure to match competitors on branded products. This is contributing to high street baby specialists (namely Mothercare and Mamas & Papas) losing market share to John Lewis, Amazon and pureplay Preciouslittleone. Brands are extremely influential in baby equipment with 59.2% of baby equipment shoppers purchasing a branded baby product in 2017. Mothercare needs to have superior customer service and instore experience to justify prices on like-for-like branded products – but with John Lewis’s price match scheme this will be difficult to achieve.
Evaluate store estate
If the CVA is approved it will go some way to address its costly store portfolio. But with only 87 stores remaining, Mothercare needs to create exciting destinations with unparalleled baby ranges and expertise. To do so it needs to improve visual merchandising, add to its specialist services and address simple issues such as limited space for parents to manoeuvre prams and allocating more play space for children.