Mothercare: putting digital at the heart of strategy
Three years ago Mothercare looked like it might become yet another high profile high street casualty thanks to profits warnings, an ageing store estate – once approaching 400 outlets with many seriously in need of refurbishment – and an 11% slump in its share price after its board rejected a £266m bid from US-based Destination Maternity.
Today, it is very different. Performance of its overseas operations remains varied – not least in its previously highly profitable Middle East stores thanks to the fall in the oil price. The UK chain, which had racked up losses of £100m over the past six years, was in profit in the second half of the last financial year and analysts suggest it will move into profit completely next year. That massive high street presence continues to decline, with the aim of eventually having around 80-85 stores, mainly out of town, while the company has reinvented itself as a digital retailer targeting the tech-savvy expectant parents of the millennial generation. Those new parents are wedded to their mobiles. They expect rapid service, plenty of information, and lively social media interactions – and that is what Mothercare is delivering. In-store e-receipts are commonplace, with more than half of customers happily handing over their email addresses in order to receive them, while refurbished stores are web-enabled with staff using iPads to provide product information, to check stock, or to confirm orders.
There is a mobile app, developed with Zapworks Designer, that uses augmented reality to enable shoppers to scan pages in the product catalogue and view close-up images, videos or product reviews on their mobiles. The 2017/18 catalogue promises interactive tours of virtual nurseries so that, rather than just seeing items in the product catalogue, expectant parents can see furniture products in situ. Mothercare has also adopted gamification with a Baby Names section on its app (“shake the phone for a random name”) along with a selection of baby tunes “specially recorded for bump, baby and child” and a YouTube channel. As chief executive Mark Newton-Jones, said in the company’s latest annual report: “The trend towards mobile continues, with our digitally enabled customers using their mobiles to browse and purchase product, review content and engage with us on our social channels. Mobile now accounts for 83% of online traffic.”
Overall, online accounts for 41% of sales, while the e-receipts have added 4m shopper email addresses to the company’s customer database. By 2020, Mothercare expects at least half its turnover to be digitally generated, with greater emphasis on personalisation and customer relationship management, as well as a “fully merged digital and physical world”. Continuing the theme of innovation, it’s even launched Ultrasound Direct scanning centres in some of it stores, “offering a full range of private antenatal scans”.