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Market
Having a baby is full of surprises, and one of the biggest shocks is the amount of items the new parent needs to clothe, feed and cosset their treasured new arrival. is the UK's longest established and best-known 'one-stop shop' for all of these needs and, as such, operates in several retail markets, each with very different competitors.
For example, the UK baby and toddler equipment market was worth 拢1,140 million in the twelve months to October 2003 (Source: FSA) and grew 3.4% over the previous twelve months. This is an area where Mothercare faces widespread competition, from department stores, independent specialist retailers, high street chemists and supermarkets. Equipment can be divided into 'hardware', which comprises items such as car seats and pushchairs, feeding (including bottles and sterilising units) and babycare (nappies, toiletries etc). Mothercare is the UK's dominant player in hardware with a 28% share and has around a fifth of the baby-feeding category.
Clothing is the other major area in which Mothercare competes for business, specialising in clothes for 0-6 year-olds - a market valued in the UK in the twelve months to October 2003 at 拢1,867 million (Source: Fashion Trak TNS). This is a particularly competitive area, with Mothercare up against supermarkets, high street chains and specialist boutiques. Nevertheless, the retailer is in the top three for babies' clothing aged 0-11 months.
This is a market where fortunes are literally linked to population trends. A steadily declining number of live births in the UK (down 13% between 1998 and 2003, according to Mintel) inevitably puts downward pressure on Mothercare's core market. However, other factors - such as the rising number of older, and therefore more affluent mothers, and also a greater emphasis on children's fashion - are helping to underpin market growth.
Achievements
Despite the fact that it was founded back in 1961, Mothercare remains the only high street retailer dedicated to catering for parents-to-be and new parents. It's near unassailable position as the leader of the babycare market has seen it expand into a chain of 241 stores in the UK with 174 additional outlets around the world.
Mothercare has become one of the most instantly recognisable consumer brands on the British high street, inspiring trust and promising value for generations of new parents. It prides itself on its customer service, making its stores parent and child-friendly environments, staffed by people who can offer knowledgeable unbiased advice. This is especially important for new parents, unversed in the technicalities of things like baby feeding equipment, cotbeds, pushchairs and car seats.
The high regard held for Mothercare has been reflected over the years by a string of awards, including the Queen's Award for Export Achievement, in 1979 and 1996 (the latter awarded to Mothercare's parent, Storehouse, in recognition of its expansion of the Mothercare and BHS brands overseas).
More recently, Mothercare swept the board at the first ever Prima Baby Reader Awards -- voted for by the magazine's readers. Overall, Mothercare scooped fifteen awards -- more than any other retailer. The awards included Best Family Friendly Store, Best Baby Changing Facilities as well as five 'Best Buy' and eight 'Best Value' items.
History
The first Mothercare store, catering for mothers and mothers-to-be, opened its doors in Kingston, Surrey, in 1961. Initially focused on maternity, Mothercare expanded its age range to include children up to five. By 1990, the age range had been adjusted to 0-8 year-olds.
A key development in the company's history was setting up a mail order business, in 1962. With its authoritative product range and strong brand positioning, the mail order arm soon helped Mothercare establish its reputation overseas. By 1968, the company had opened its first international store, in St Gallen, Switzerland. This was followed by a store in Austria in 1970 and Belgium in 1977.
Initially, all of these overseas stores were run by Mothercare parent company in the UK, but, in 1984, Mothercare International began a franchise operation. By carefully selecting partners in chosen countries, this has helped the overseas business to flourish even further.
In 1972, Mothercare became a public company. Ten years later it merged with Terence Conran's Habitat chain to form Habitat Mothercare, which, in 1986, itself merged with British Home Stores to form Storehouse plc. In 1992, Storehouse rationalised by selling Habitat to he Stitching Ingka Foundation, leaving it to focus on its two core brands, BHS and Mothercare.
In May 2000 Mothercare became an independent entity once again following its demerger from BHS.
Product
Whether it is for newly pregnant women, new parents or parents wanting to encourage their toddlers to explore the world around them, Mothercare has the products to suit all requirements. Mothercare is well known for its strength in product innovation, holding over 24 patents for products it has developed.
Overall, Mothercare's sales can be divided into: clothing (39.4%), home and travel (46.7%) and toys (12.3%). The range comprises five main product groups, each aimed at different stages of parenthood.
Mothercare is the dominant force in the maternity market, providing a comprehensive range of fashionable clothing and maternity essentials (such as bras and toiletries) as well as specialist products, such as the birthMATE TENS machine, designed to ease pain during labour.
Mothercare's baby range offers function as well as fashion in its products that are often designed in consultation with midwives, reinforcing the authority and expertise, which is inherent in the Mothercare brand.
Clothing ranges for young children start at two years, also with a view to combining functionality with a flair for fashion.
Mothercare is renowned for its nursery equipment, and is the market leader, especially in the areas of car safety, transport and bedding. Mothercare achieves consistent growth in these areas through ongoing product innovation and working closely with manufacturers and suppliers.
Toys are an increasingly important business opportunity for the company and the ranges have been recently restructured to target specific ages and stages to help stimulate and support children's development.
Mothercare's expanding range includes the recently launched Baby Einstein range of products. The videos, DVDs, books and music CDs were created to engage, stimulate and develop babies and toddlers with friendly images, music and playful sound effects. Titles include Baby Mozart, Baby Van Gogh and Baby Einstein Language Nursery.
Mothercare sells its product via three main channels: high street stores; out-of-town 'superstores' called Mothercare World; and home shopping via a quarterly catalogue and the website .
Recent developments
Since the arrival of a new chief executive, Ben Gordon, in December 2002 there have been many changes in Mothercare's business. The executive team is almost entirely new, with only two of the eight members pre-dating Ben's arrival. Together the executive team has put together a programme of strategic priorities in five key areas that comprise product and proposition, sourcing, customer interface and infrastructure.
To date, the projects around these strategic priorities have seen the business embark on a refurbishment of its stores all over the UK and introduce important new systems for dealing with buying and merchandising and point of sale processes. The projects are approaching the halfway stage and many benefits are already being realised.
Mothercare's financial results for the 27 weeks ending in October 2003 saw the effect of this restructure, with sales growing by 6.6% compared to the same period in 2002. This resulted in a 25% leap in the company's share price.
Promotion
While Mothercare has not been pursuing above-the-line advertising in recent times, there have been numerous activities going on in store and via its home shopping and direct marketing channels.
A number of trials of in-store events were completed in 2003, including book reading, baby massage and children's first aid courses. These are currently under review ahead of an events strategy being put in place.
Three stores also have a community liaison expert, who works closely with local healthcare professionals such as midwives to organise coffee mornings and seminars.
Mothercare is also involved in charitable activities, the most recent being the sale of a children's height chart to raise money for the Tommy's campaign to help and support parents whose children have been born prematurely or with birth defects.
The brand's growing business in the home shopping arena provides vital promotional opportunities with direct mail and email shots forming a key part of the overall marketing mix. The highly profitable home shopping catalogue also provides a valuable form of communication with customers.
Mothercare remains one of the pillars of British retailing and was born out of an idea to provide parents and parents-to-be with a one-stop-shop where they could find all the best quality and innovative products for their children under one roof. That still remains a central tenet of the Mothercare business today. The business has been criticised in the past for losing its way and not keeping up with the pace of its competitors. However, the recent initiatives put in place by management are restoring the brand to a position of strength again and new generations of parents appreciate the blend of good quality, value for money and strong product development delivered with knowledge, expertise and authority.
Overall, Mothercare understands what it means to be a parent - the lows and the highs - and strives to make every mum and dad be the best parent they can and give their little ones the best possible start in life.
Brand values
Mothercare remains one of the pillars of British retailing and was born out of an idea to provide parents and parents-to-be with a one-stop-shop where they could find all the best quality and innovative products for their children under one roof. That still remains a central tenet of the Mothercare business today. The business has been criticised in the past for losing its way and not keeping up with the pace of its competitors. However, the recent initiatives put in place by management are restoring the brand to a position of strength again and new generations of parents appreciate the blend of good quality, value for money and strong product development delivered with knowledge, expertise and authority.
Overall, Mothercare understands what it means to be a parent -- the lows and the highs -- and strives to make every mum and dad be the best parent they can and give their little ones the best possible start in life.
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