The struggling maternity retailer’s turnaround strategy must do more than cut prices in order to survive in a competitive retail market.
When embarking on a turnaround strategy, retailers love nothing more than to throw in the phrase “going back to basics”. It implies that they are re-evaluating the entire value chain from pricing models to retail formats.
In Mothercare’s case, fixing the basics is just the tip of the iceberg. However, unlike many retailers catering to a wide spectrum of shoppers (think Tesco and its current identity crisis), Mothercare has the advantage of a very clearly defined target customer. She is time-starved, advice-seeking, fairly demanding – and often sleep-deprived. I speak from experience.
Defining your customer is half the battle. The next question is can a change in leadership really fix Mothercare’s problems?
When it came to addressing the basics, Simon Calver was on the right track – closing unprofitable stores, focusing on online and revamping existing shops. On paper, he was doing all the right things, but the customer experience just didn’t match up.
For example, an in-store display of wellies stating “from £6” was a disappointment when every single pair turned out to be double the price. The same poor experience translated online – from promotions that didn’t ring up at checkout to entire deliveries that have gone missing.
Busy mums don’t have the time or energy to be chasing mistakes. In retail, things can and do go wrong, but a noticeable lack of customer support will lead shoppers to vote with their feet – to the supermarkets and Amazon mainly.
New boss Mark Newton-Jones will have his hands full in the second half of the year. Destination Maternity, Mothercare’s unsuccessful US suitor, believed its “strong maternity apparel offering would have provided an attractive enhancement to the Mothercare turnaround plan”.
Mothercare’s maternitywear range may err on the functional side, but the retailer has far bigger fish to fry – pricing needs to be less erratic, stores need to be more engaging and the brand itself needs to take on a greater educational aspect.
- Natalie Berg, Global research director, Planet Retail