British retail chain Pep&Co’s decision to pilot a wider range of its value children’s clothing in 50 stores is a shrewd move, according to GlobalData. Read on for the research firm’s take on the outlook for Pep&Co’s discount childrenswear.
Value is king when it comes to buying clothes for kids. Among UK childrenswear shoppers, 52% of UK childrenswear shoppers in 2019 cited price as being important to them, according to a recent GlobalData survey, making it the leading purchase driver for this sector.
“While economic uncertainty is a major factor causing shoppers to trade down, the short lifespan of childrenswear, due to children’s rapid growth and their tendency to easily ruin clothes, also makes parents hesitant to pay midmarket prices,” says Pippa Stephens, associate retail analyst at GlobalData.
The increased availability of childrenswear in Pep&Co’s stores will provide the retailer with greater opportunity to capitalize from consumers’ desire for value clothing, according to GlobalData. With prices starting at just £1, and 95% of the range at £10 or under, Pep&Co is extremely competitive against other value childrenswear players, such as Tesco and Primark, which will help it to build upon its UK childrenswear market share, forecast at 0.6% for 2020. It must ensure that it remains more affordable than its rivals by consistently price checking on core product areas, like basic T-shirts and underwear.
“Pep&Co must make sure that while maintaining its low price points, other key product attributes are not compromised—in particular, comfort, durability, and fit, which were cited as important purchase drivers by over a third of UK childrenswear shoppers in 2019,” Stephens adds. “Pep&Co has also stated that it is backing the UK government’s bill to keep the cost of school uniforms down by minimizing compulsory branded items, and if this bill is passed, Pep&Co will benefit thanks to its strong range of value schoolwear.
” Aldi and Lidl are two of Pep&Co’s biggest rivals for cheap school uniforms, as they often undercut on price, However, their in-store clothing offer is inconsistent, which often makes it hard for shoppers to find items. Pep&Co’s clothing areas are much more comprehensive, so it must generate top of mind appeal amongst consumers through specific ‘Back to School’ marketing and promotional events.”
Although 44.8% of UK childrenswear shoppers in the GlobalData 2019 clothing survey had purchased children’s clothing online over the past 12 months, Pep&Co is unable to benefit from this as it lacks a transactional website, meaning it must focus on driving footfall. To attract shoppers, Pep&Co must highlight its childrenswear ranges through window displays, social media and TV advertisements. It should also leverage its existing relationships with reality stars Mario Falcone and Ferne McCann, by featuring them alongside their children in marketing campaigns, and collaborating with them for social media advertisements, to help raise greater awareness of its offer.