In a candid tête-à-tête with Anshu Grover Bhogra, the Buying and Planning Head of Mothercare, a UK-based kidswear retailer and a well-known name in India, Apparel Resources unravels its unique strategies for success in the ongoing, competitive market.
The kidswear apparel segment thrives on the promise of safe and quality clothing unlike adult fashion, which has a strong influence of detailing and styling. Multifold guidelines are laid out year after year to define the dos and don’ts for kidswear apparel from the biggest details such as fabric texture and feel to the smallest ones such as the shape of a button or the length of a drawstring. The quality aspects have to be excellent as little details like needle detection and abrasion resistance of fabrics hold the utmost importance. The focus lies more on the feel of the garment rather than colour, style or other details. This fact alone resonates with the success of Mothercare, the brand that has been exemplary in championing quality over opulence.
Established in 1961, Mothercare is a British kidswear apparel and lifestyle retailer that has since then become a pioneer in the field of kidswear clothing and accessories globally. Within a short period, since its inception in India in 2009, it has successfully made a mark in the Indian retail industry as one the most popular brands in kidswear apparel, especially for the division that caters to toddlers and infants. The brand is an example for all the international brands that are retailing in India while staying strictly true to their international roots.
Premium quality and a relationship with consumers based on trust and loyalty are the focus areas of the company as emphasised by Anshu Grover, the Buying and Planning Head for Mothercare, India. According to her, the brand’s journey so far reflects a business model that cashes on exclusive quality and safety provisions while investing on educating the customer to establish a long-term relationship with them.
Anshu avers further on this, “We want a long association with both the mother and the child. The products we keep in store are of A+ quality and we make sure that the child is safe. We also have features like Nickel-free popper buttons. We avoid use of labels as they are uncomfortable against the child’s sensitive skin. There are several features and products that are very child-friendly, very mother-friendly. This is what we focus on.”
Another factor that can be attributed to its success is its significant shift from unorganised sector to corporatised retail which falls in line with the recent buyout that made Mothercare come under the umbrella of Reliance Brands Limited. The corporatised retail sector constituted 22 percent of the Indian market in 2016. Since then, it has grown about 7 per cent year on year.
Zero competition in the toddlers’ segment
The Newborns category is Mothercare’s strength as it offers a comfortable assortment of clothes that cater to the basic needs of the mother focusing on quality over fashion details, as Anshu mentions, “Until the age of three, the mother is shopping for the child and she focuses more on quality and safety of the garments. Other retailers might offer Toddlers’ clothing but the stress on quality gives us an edge. Anyone can sell a sleepsuit at Rs. 199 but giving a quality product at that price is critical. Thus, our newborn segment doesn’t have competition in Indian Market, and it caters to 50 per cent of our revenue.”
The Mothercare product mix boasts of three best performing categories: Infants (for kids till the age of 18 months); Baby Fashion (for the age group from 3 months to 36 months) and finally, Junior Fashion which comprises just 15 per cent of the lot (the age group from 3 to 8 year-old). There is an overlap of four sizes for the last two divisions but their signatures vary when it comes to colours and styles.
Tier-1 and Tier-2: A balance of business and aspiration
Not just limited to premium apparel, the brand also offers a plethora of kidswear accessories, toys and lifestyle products and houses several brands such as Graco, Philips Avent, Ergo Baby, Medela, Merifore, Pigeon, Rekaro, Snuz, etc. From travelling car seats to sippers and diaper bags, Mothercare is a one-stop solution store for parents.
However, such a diverse product collection comes with complexities related to demands as the retailer has to find a balance between the Tier-1, 2 and 3 cities. The needs of the customers in each of these vary with the lifestyles they have. The Tier-1 customer is bound to react better to high value items such as combo sets and travel accessories, as they have the expenses sorted accordingly. Thus, the retailers prefers establishing a relationship with Tier-2 customers before introducing such items.
“Having a strong focus on the product mix to induct the customer is very important. In metros, people can spend Rs. 2,499 on a pack of three t-shirts but the same price point won’t work for places like Lucknow. We can sell three t-shirts individually; it works better there and then we can go on to increase the products and prices as the customer gets used to the brand,” says Anshu.
About 80 per cent of the brand’s presence resides in the metro cities and they are striving to expand business avenues through their existing stores in cities like Kanpur, Indore, Surat as well as new openings in Tier-3 segment.
Anshu clearly states that the core business lies in Tier-1 as customers are aware about the brand and have access to disposable income but Tier-2 and 3 cities also show immense potential when it comes to customer aspiration, “We definitely do better in metros. But, if business lies in Tier-1, then aspiration lies in Tier-2 and 3 cities. The way to capture the latter’s aspiration is by having more Mothercare stores in those cities and by also providing a different product mix. It’s a play of want versus need.”
A moderately priced brand which sells at list price
Mothercare recently saw a change in management as Reliance Brands Limited acquired the retailer under its umbrella. Thus, the brand has now applied several policy changes according to the new conglomerate it belongs to. The biggest initiative of this acquisition has been the complete shift from a very strong discount structure to a non-discount brand where discounts and markdowns are limited to the End of Season Sale period.
Anshu explains how this establishes Mothercare as a powerful brand that believes in correct pricing for extraordinary quality of products by saying, “We want to maintain the standards. We are priced very reasonably as Mothercare is not a luxury brand, so there is no scope of markdowns.”
The shift of sourcing and retail in india and bangladesh
Mothercare follows a systematic design, sourcing, development and production system that is followed globally. A design team, based out of UK, decides the styles for both fashion and core segments every season. The team in India visits the headquarters every three months to choose the assortment to be retailed in India. This process happens eight months prior to the launch as the global team utilises this time for sourcing, production and the final procurement.
Anshu identified Tirupur as a strong sourcing hub for Mothercare’s entire global supply as about 40 per cent of the range comes from India, especially basics such as knitted t-shirts and bodysuits. Conversely, Bangladesh is another strong sourcing hub for the brand that provides about 38 per cent of its supply which includes denim pieces such as bottoms, dungarees, value addition applique, etc. The brand even sources high quality trims from UK and China.
Anshu positively concludes referring to the shift in sourcing patterns by Mothercare, “Base is shifting from India to Bangladesh just for one reason – better quality, better prices. It is cheaper as there are no import duties. This shift is not a bad news for our country as it is happening due to the fact that India is shifting towards a more retail-oriented market and will be at par with countries like China as the biggest retail hub in a few years’ time.”