Mothercare’s CEO has made strides in turning the struggling retailer around and plans to transform it into a digital business.
Mark Newton-Jones, CEO of Mothercare, must be patting himself on the back. Last year the retailer was being written off, but after seven months under Newton-Jones’ leadership, Mothercare’s UK revenues have started to improve, with like-for-like sales rising 0.9% in the 15 weeks to July 12th, and international sales are positive. The recent rights issue was taken up in full, with all board members committing to the future of the company by subscribing . His strategy of using these new funds to pay down debt, dispose of the long tail of under-performing stores and to invest in better stores and in IT which will transform Mothercare into a digital business, looks like the perfect recipe for success.
Technology is an important pillar in the company’s strategy. The company plans to offer customers the full range of shopping channels and plans to increase online sales from 30 – 50% of total revenues. In store, iPads and interactive screens are planned so that customers can view demo videos and customer reviews and access a broader product range than stocked in the local store. In store ‘beacon’ technology will connect to shoppers’ smartphones via apps, enabling two-way data exchange including shopper advice downloads and shopper information uploads. This last is especially important to building long term relationships with customers as well as optimising store performance.
Mothercare operates in a clearly defined sector – babies turn into toddlers, who turn into children and, inevitably, into teenagers where they fall off the Mothercare radar. Products are all designed to suit a particular age group and, armed with the right customer data, Mothercare can educate and advise parents through all the phases of their child’s development, using its data to make sure that its contacts will be appropriate for the child’s age.
Physical stores are expensive and making the best use of the space and the staff will play an important part in the recovery of Mothercare. Technology can help by using data to optimise store layout, to improve the supply chain and make best use of staff time and engagement with customers.
Competitors, however, are also struggling. The supermarkets have encroached on their market and this is affecting not just Mothercare but also its competitors, Kiddicare and Mamas & Papas. One way that Mothercare plans to win and retain customers is by extending its product range: it plans to introduce a more exclusive, higher quality product range, positioning the company as a higher quality supplier. Mark Newton-Jones is addressing all the issues that have plagued Mothercare, and continue to cause problems for other retailers. Mothercare isn’t out of the woods yet but under the focused leadership of Mark Newton-Jones at least the (digital) trees are clearer.
- Dan Coen, director, Zolfo Cooper