Where did it all go wrong….it’s the Friday Blog!

Published on: 8th November 2019

No doubt about the big story of the week – the sad news that Mothercare will be implementing the phased closure of all of its 79 UK stores. Little did I think my “RIP Mothercare” joke, which closed the Blog only a month ago, would be quite so prescient. Realistically we all knew what was coming, but I don’t think many of us thought it would happen quite so soon.

So where did it all go wrong? Well, if you believe the ‘experts’ – and by experts, I mean anyone with access to a keyboard, a LinkedIn account and the time to pontificate at length whenever a retailer gets into trouble (and trust me, there are a lot of those people about…) – it was a lack of “retail theatre”. As it always is with these keyboard warriors, who have probably never worked a day at retail in their lives. In their eyes, a bit of retail theatre (although they never specify exactly what this mythical retail theatre actually entails) is the solution to literally every retailer’s challenges. Sorry, but I’m not buying that. As anyone who reads Toy World and this Blog will know, I am a huge advocate of the concept of retail theatre….providing it is wedded to solid commercial principles and underlying retail discipline. Many of today’s UK retail success stories – B&M, Home Bargains, Aldi, Lidl, Primark etc – have proved conclusively that there is more than one way to proverbially skin the retail cat. Of course, an attractive retail environment is important but in the end, it’s a shop, not a circus.

The basics will always apply: is the range architecture right; are the retail pricing and margin requirements right for the consumer and sustainable for the retailer; are stock levels correct; is the store size and layout compatible with the modern retail environment; are the staff engaged, knowledgeable and helpful? When our first daughter was born 25 years ago, we bought pretty much everything from Mothercare – not because we were in any way entertained by the iconic singing tree in the store, but because their customer service was exceptional. I haven’t shopped there in a while, but anecdotally, I hear that customer service hasn’t been a particular strength of Mothercare for a while.

Neither do I accept that Mothercare’s failure is a direct result of online competition (the other default blame setting for the keyboard experts). Nursery products are emotional purchases; customers want to touch and feel them in the flesh. If all of those prospective parents were quite happy to order everything online, surely Mothercare’s online sales would have increased when they closed their first 50 stores. Yet their online sales actually declined by 12% at that point – presumably because the stores closed, removing the option to get up close and personal with the goods. Whether Mothercare’s ranges truly offered sufficient value is debatable, but my personal opinion is that experiential marketing wouldn’t have saved them – however, doing the basics better might have helped to make a crucial difference. And as one toy retail executive observed on my LinkedIn feed: “A sad day, another retailer killed by poor management over many years resulting in too much debt in the business.”

It goes without saying that the real losers here are the 2,900 store and head office staff, most of whom will almost certainly lose their jobs, either just before or after Christmas. Chairman Clive Whiley expressed his sympathy, but his choice of words -including describing the closure of the UK shops as “…the completion of our transformation programme…” – may stick in the craw with some, as will the fact that group boss Mark Newton-Jones still picked up a £158,000 bonus for last year. That sum wouldn’t have saved the UK operation, but it’s still not a great look.

And if you need any more evidence that retail theatre is not a universal panacea, I present exhibit B – the new Toys R Us Adventure interactive experiences in the US. A Chicago Tribune journalist who visited the new Chicago store pulled no punches, referring to it as “a branding experiment masquerading as a play space, sifted through a dissipating fog of lingering nostalgia, with a gift shop at the end. It is not the dream rekindled, or even the toy-store chain revived. The Toys R Us Adventure is a mess, but worse, it looks cheap and feels cynical.” At $96 for a family of four to enter, it certainly isn’t a cheap day out. And with only three brands featured in the gift store, it seems that most US toy suppliers aren’t convinced either. US toy stalwart Richard Gottlieb summed it up quite nicely: “It is difficult to understand what Toys R Us has to do with an overpriced, boring entertainment venue.” It’s a huge shame, as the Toys R Us Asian and Canadian operations illustrate what could have been achieved with the right management.

Back here in the UK, a quick straw poll of suppliers suggests that Amazon orders are coming in well above expectations – perhaps they are stockpiling ahead of potential Brexit/Election disruption? The Entertainer and Smyths also apparently remain strong, with people out in the field conducting store checks reporting that they’re seeing many shoppers coming out with bags, not just browsing. Argos is also said to be starting to pick up after a slow start, with this week’s latest promotional event offering some very attractive deals. TV shows like This Morning are starting to offer great exposure to the latest toys, with companies featured on the This Morning list reporting a massive spike in google searches and even sales within a matter of hours. With Dream Toys next week and the How to Spend it Well at Christmas programme still to come, toys are providing a welcome opportunity for broadcasters to keep Jacob Rees-Mogg and his ilk off our screens – which can only be a good thing.

It is beginning to feel a bit like Christmas – let’s hope a bit turns into a lot very soon.