Inside Mothercare's marketing strategy as its turnaround plan begins to pay off
Mothercare is looking to redefine its brand as it emerges from one of the most tumultuous periods in its 55-year history. Following the arrival of a new marketing director in Gary Kibble last year, the retailer will continue to overhaul its store estate and refresh its brand comms as well as position itself as a leading digital player.
Two years years ago, it’s fair to say that Mothercare was at its lowest point. Profit warnings had been issued and shareholders were convinced a buyout by American giant Destination Maternity was the answer to its woes. But that deal fell through and Mothercare was on the edge of a precipice.
It was then that chief executive Mark Newton-Jones was flown in. Having spent 18 years at Next and a further 10 at Shop Direct, where he took it from a catalogue business to a retailer which now sees 60 per cent sales coming through digital, Newton-Jones was quick to implement a new strategy which it is still working against today.
“The appointment of Mark was a pivotal moment,” Kibble recently told The Drum. “His compelling vision reassured the market and we secured £100m investment.”
Old, tired, unloved
Mothercare's failure until that point can be boiled down to two key issues. Chiefly, some two-thirds of its business is outside of the UK and even the smallest economic headwinds shake Mothercare to its core. It became a price-led retailer, people viewed it as a discounter, and that ultimately meant what it was exporting to its franchisee partners in Europe had become undervalued.
“If you have a business not performing in its home country what you then export is undervalued,” said Kibble. “We had an exportable business model that’s was not attractive to our export partners.”
But beyond that there was chronic lack of investment in the brand.
“From a store point of view we had a number of stores which had not had a lick of paint in 15 years,” admitted Kibble. “Some looked like they were in close-down mode: tape on the carpet, chewing gum stains, standards of visual merchandising were very poor. It looked tired and unloved which was very symptomatic of the store estate.”
It was here the bulk of the £100m investment Mothercare received was directed. Although only 40 per cent 166 stores have been refurbished, those already transformed have leant heavily on the idea of becoming a part of the community and being a place where new parents – who often feel isolated – can come together.
Coffee shops selling healthy food have been integrated while some stores also have a soft play area. “It’s about socialising within a physical store environment,” explained Kibble.
From what Mothercare has measured thus far, this tact is working. It’s measuring success against two key metrics – dwell time and conversion – both of which are up in the new-look stores versus old.
Becoming a leading-digital retailer
Given chief exec Newton-Jones and Kibble's backgrounds at Shop Direct, bringing Mothercare up to date with how people shop has been a priority. Dubbed ‘Web Enabled Stores’ (WES), they have seen store staff given iPads in order to show product variants, check stock, and complete orders. Over a third of Mothercare’s total sales in the UK now come through a digital channel and WES stores are driving 40 per cent of that.
E-receipts are another new introduction and this is something that’s helping Mothercare foster a more personalised relationship with customers. Nearly half of those going through a checkout now will hand over their email address and this has resulted in its database growing 30-fold.
“Three years ago we had about 280,000 names on database but now we have 11 million names in total […] and three million [of those customers] are active. The richness is starting to understand the value of customers. A pre-natal customer is worth three times as much as a customer that comes in after the child is born. Once you know that you can understand what they’re browsing and buying and who they are shopping with when it’s not us,” explained Kibble, who adds that there is the option for customers to give more information on the stage of their pregnancy.
“Because we’ve built up really rich visual picture we’ve created 200 triggered emails to tell parents about what’s happening in their pregnancy and what they need to be thinking about. We also know when the baby is born and when they’ll start needing other stuff from a crib to a bed, weaning to solids etc. We know the steps so that relationship can be much longer and much more relevant as we arguably know the most intimate thing about them and where they are in the cycle of life.”
The third prong of this strategy to being a leading digital retailer comes in the shape of its App. Augmented reality is a key feature, with people able to scan product pages in the catalogue to get more information such as reviews or close up images and videos. There is also a gamified ‘Baby Name’ section and ‘Mothercare TV’ with helpful videos, an essentials checklist, a contractions timer and a ‘white noise’ radio which replicates noises of the womb for newborn babies.
“It’s not just about transacting but engaging on a much more emotional level,” said Kibble.
But people are transacting. Some 900,000 people have downloaded the app and it’s now seeing a higher conversion rate (orders) in comparison to the website.
Part of the Club
Despite all of these improvements to the brand, marketing is one area that has remained relatively unchanged.
Kibble has sought to clarify Mothercare’s positioning by introducing a new strapline – ‘Welcome to the Club’ – which he hopes one day will become as synonymous as ‘Every Little Helps’ and Tesco or ‘Never Knowingly Undersold’ and John Lewis.
Digital continues to be its medium of choice for communicating with customers, mainly because of its ability to personalise that conversation. While Kibble is not averse to shouting about the brand’s reinvigoration on broadcast mediums, the problem lies in the fact that a minority portion of its customers would see the changes.
Those visiting the 60 per cent of stores which remain untouched “would think we’ve lied to them,” said Kibble, and that’s a risk it can’t afford to take at this juncture.
Although it’s not undertaken any brand perception studies – “if you like what they say then you listen do it and if you don’t then you ignore,” said Kibble of their effectiveness – it believes the dial is turning and people are seeing the Mothercare move from being tired and out of date to a more modern retailer which can reliably deliver against ever-changing needs.
“There is a genuine degree of warmth for the brand. People want the brand to do well and succeed. You feel that real passion for it.”
Indeed, this year Mothercare bosses joyously announced pre-tax profits of £9.7m for the 52 weeks to March 26, compared with £13.1m loss the year before.