In his first statement since taking on the role, he has admitted that the business is “outdated” and will need some hefty investment in infrastructure, stores and head office systems. He recognises that the company became too reliant on discounting to shift goods, leading to a decline in brand equity and a race to the bottom on price.
That Mothercare went down this route is not surprising. It has been hard hit by cut-price competition from supermarkets and online retailers and needed to fight back.
However, all it succeeded in doing was finding itself in a competitive battle with rivals on price. One that it couldn’t win.
What Mothercare needs to do is use its expertise as a mother and baby retailer to win over customers. Mums are one of the most engaged demographics online and always on the lookout for advice, hence the success of sites like Mumsnet.
Mothercare needs to be tapping into this. It needs to prove its expertise and knowledge and offer help, advice and information, as well as some engaging content for those long sleepless nights if it wants to convince people to pick it over rivals.
That means it needs a strong online proposition. The latest figures from the British Retail Consortium show that in the “baby and toy” category already 17 per cent of sales are made online, up from 15.4 per cent a year ago.
Parents are short of time, online shopping makes sense and that proportion is only going to keep growing.
This engagement with core customers was key to the success of Kiddicare and why Morrisons bought it for £70m three years ago. It successfully put customers at the heart of its proposition, building up a strong and loyal following that waxed lyrical about the brand to anyone who would listen.
When the online retailer took its eye off the customer ball and started worrying more about opening standalone stores and Morrisons concessions than what the customer actually wanted it saw its sales and brand value plummet. Its recent sale to Endless for just £2m proves that.
Mothercare must also engage people in stores. Its high street stores in particular have become a drag on its business, known for being uninspiring and unappealing.
It must turn them into an opportunity. Those it decides to keep will need to offer stellar service, knowledgeable staff, straightforward layouts and a seamless link online to attract customers.
It isn’t enough just to sell cots or pushchairs or dummies. Much like in other sectors Mothercare needs to offer a shopping experience – a space for parents to meet each other and find advice, not just buy stuff.
For Mothercare, whether in stores or online, engagement is the silver bullet. Investment in other areas won’t work unless it also invests here.