Mothercare: what was its formula for failure?

Last week it was announced that Mothercare, a constant of the British high street for over 50 years, had become the latest retail casualty — with all of its 79 stores set to close. But what went wrong for the maternity and baby brand?

Mothercare is one of many brands that has fallen foul of the retail dynamics of 2019 — following in the doomed footsteps of Oddbins, Forever 21 and Bonmarché. In worse news for the category, just days after Mothercare announced its troubles, competitor Mamas & Papas also revealed it was going into administration with the immediate closure of six stores across the country.

As consumer spend continues to move online, retailers with physical stores need to give consumers solid reasons to go out of their way to visit a store in person. Whether through offering exciting retail experiences, great value or unique products, retailers are having to work harder than ever to stay profitable.

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What does the data say?

Data from BrandVue Retail, Savanta’s market intelligence tool for the retail sector, shows that nursery and baby equipment is a considered purchase that is important to the buyers. However, it is a category well-served by retailers across various categories, including supermarkets, Argos and of course Amazon.

In terms of both online and offline competitors, Mothercare has been chasing the pack for some time.

Its Net Promoter Score is currently +39, far behind Amazon at +63 and Argos at +45. Potential customers are also far less likely to say they would consider buying products from the brand. Just under a quarter (23%) of the population would consider purchasing from Mothercare versus around three quarters for both Amazon (73%) and Argos (71%).

BrandVue data shows that as at October 2019 Mothercare’s online satisfaction score was the lowest it’s ever been at +7.7; behind Amazon (+8.8), Argos (+8.4), Tesco (+8.4) and Asda (+8.1). What’s more, its instore experience was considered slightly inferior to Argos with a score of +7.4 versus +7.6.

Maternity and baby products is also a category dominated by strong brands such as Baby Bjorn, Chicco and Bugaboo. While these brands command a premium, they also make it easier for shoppers to hop between retailers to look for the best prices and the most convenient delivery options.

What caused Mothercare’s collapse?

The data indicates there are three main reasons for Mothercare’s decline in consideration among shoppers.

1. Middle market offering: Mothercare, like many other brands, has got lost somewhere in the middle—neither offering great value (like that offered at supermarkets and discounters) or unique products and retailer experiences that consumers will travel for (as seen at Jojo Maman Bébé and The White Company).

2. Multi-category retailers: Being a specialist has benefits. It means you can offer a wide range of products and it is clear what type of products you sell. However, it means customers need to go out of their way to shop there. Shoppers are likely to be in supermarkets, Argos or department stores for other reasons and so they can make these purchases at the same time.

These brands are also more front of mind as many of them are big advertisers with a larger high street presence. Staying relevant is vital and Mothercare, while very familiar to shopper of all ages, has struggled in this regard. Its advertising awareness score of 3% trails Argos (34%), Amazon (38%) and Tesco (43%) by some way.

3. The Amazon effect: Baby and nursery equipment is a category perfect for Amazon. Not only are there lots of trusted brands consumers can easily search for on the website, there are many routine purchases where consumers are looking for convenience rather than unrivalled in-store experience. Amazon’s Prime service also offers parents quick and convenient delivery of everyday essentials.

Richard Branch, director, Savanta

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