Boutique baby store creates niche in a crowded market

DAVID ALEXANDER/The Press

PARTNERS IN ARMS: Jenni Saunders and Malcolm Cleugh in their Milk Contemporary Baby store in Christchurch. There is nothing quite like a newborn to turn the most ardent spendthrift into a mushy-hearted, coochy-cooing, lavish gift-giving softie, judging by the success of the store.

Relevant offers

As any first-time parent – and grandparent – will know, consumerism is about as easy to avoid as nappyrash when the new baby comes along.

Apart from the essentials – car seats, nappies, prams and cots – there is a seemingly endless and irresistible array of cuddly toys, clothing and accessories with which to fill nurseries and nappybags.

And there is nothing quite like a newborn to turn the most ardent spendthrift into a mushy-hearted, coochy-cooing, lavish gift-giving softie.

That would appear to be the case anyway, judging by the success of Christchurch baby boutique Milk, where sleek hand-crafted wooden high-chairs retail for $500 a pop, and pint-sized Merino jerseys that cost the same as a tank of petrol have had no trouble finding happy homes and buyers.

And if the current downturn in the economy has put a crimp on consumer spending, Milk's owners, Malcolm Cleugh and Jenni Saunders, haven't noticed.

Their trendy shop is growing faster than a third-trimester bump – fed by a healthy consumer appetite among affluent urbanite mums and baby admirers.

The upmarket baby boutique is also winning accolades from the business sector.

This month, Milk Contemporary Baby Store was named champion retailer in the small enterprise category at the Canterbury Business Awards.

The honour came on the back of a Top Shop designation in 2007 by the New Zealand Retailers Association, which also had Milk as a finalist at last week's awards ceremony.

Cleugh and Saunders would not quantify the growth in real numbers, apart from confessing the store has doubled in size and staff in the three years since it opened. The secret, suggests Saunders, who became a first-time mum 11 weeks ago, is brand-building.

"It wasn't just coming up with a logo. It was 'what values do we stand for, what story do we want to tell with the brand'. That's what I'm most proud of."

Rather than carrying a wide range of brands, Milk's focus is on high-end names such Pure Baby, Mokopuna, Caribou and Icebreaker.

There was a gap in the market from a brands point of view," explains Cleugh, "particularly New Zealand wool. One thing we try to do here is go in quite deep in our brands, rather than having dozens and dozens."

Retailers Association chief executive John Albertson, said Milk's success proved that consumers paid attention to more than price.

"When times get tough, the easiest thing for retailers to do is to reduce their price on the basis that lower prices will give them more volume.

'We'd argue there's probably as much to be gained by offering a very good service, having the right product and having the right store.

"If price was the only thing that was important, we wouldn't have the array of shops that we have now."

As a single outlet store, competing against the likes of Baby City, Baby Factory and Farmers, Cleugh say Milk could ill afford to compete with a "stock it high and make it cheap" strategy.

Saunders says the store's point of difference has been offering quality products and good service.

"We're in a market where sales are price driven and we've been careful not to get sucked into that end of the market. We've positioned ourselves and stuck to our position, stuck to what we're good at, which is service. That's really helped us particularly with the economy going the way it's going, being focused on ourselves and not getting too distracted by the competition." Still, the competition has been good for Milk, in so much as it was the impetus for its creation.

Cleugh says he was inspired to get into the baby business because of the competition. He had occasion to frequent several stores in the months leading up to the birth of his first child and had mostly bad experiences.

"In a lot of cases, we went into stores trying to find products and were either treated like idiots or there was no service whatsoever. We'd walk into a store and literally no one would talk to you, which was quite funny with my wife having a huge bump sticking out. We found it quite fascinating."

Whereas other consumers might have stewed, Cleugh, a former marketing specialist for Macpac, took action.

"I thought, 'okay, right, there's a segment which is not being serviced particularly well here – why don't we service it."

Within 20 minutes of the "lightbulb moment", he bumped into Saunders (a fellow Macpac employee) on the street and broached the idea.

Coincidentally, Saunders was also casting about for new business possibilities.

"She said: 'Yup, I'd be keen for that'," and the pair decided to join forces, recalls Cleugh.

The conception for Milk may have been quick but Cleugh says the gestation was long.

"It wasn't just out of a whim. It was 12 months in the making and we decided what the business was going to look like prior to speaking with the designer. The planning was extremely important as well as the measuring. That included benchmarking against other industry types and not being afraid to look outside this segment. It was a broad focus."

Albertson says those who do their homework, as was the case with Milk, are often rewarded.

"Basically, as long as you understand what your market positioning is, and you have a single-minded view of attracting those customers, then you'll get the business."

It also helped to draw on customer feedback, something that was not done enough in retail, he said.

"It's easy information to get and people want to tell you and it's valuable stuff. You want your customers to leave thinking: 'I'm looking forward to coming back here next time'."

Milk opened in 2005 but quickly outgrew its premises. Last year, it moved to its present location in a slick glass retail complex.

Saunders said the location, which they had scoped out in earlier days, was a real asset.

"We're not hidden away somewhere inside a shopping mall. There's parking right out front so access is easy, and you can just nip in if you have to, or even bring a stroller inside."

Saunders says customer service is another point of difference. "We look more for personality and people qualities as opposed to experience," she says of her employees. "You can learn the skills, but you can't learn to be a people person necessarily. And so much of what we do is based on offering great service."

As insurance, Saunders and Cleugh periodically have Milk visited by a mystery shopper, someone who is paid to make an unannounced stop and purchase and assess their retail experience.

While the store is targeted at parents of newborns to three-year- olds, Cleugh and Saunders have identified a demand for goods of the same brand and quality that go beyond.

"We wanted to build a good base to expand from," says Cleugh. "So watch the space."

- © Fairfax NZ News