Pumpkin Patch needs to go back to its roots

pumpkinPumpkin Patch children’s clothing is a big deal in New Zealand, being its second largest publicly traded retailer. The chain, which launched as a catalogue business in 1991, now has 235 stores worldwide with close to half of all revenue coming from Australia.

But Pumpkin Patch is in decline. Several weeks ago they announced they would close 20 of 35 US stores in order to curtail further losses. They largely cited the recession as reason for a 7 percent fall in half year profit to NZ$9.5m and attributed the strength of their brand to having cushioned the blow.

I have some other thoughts…

Some of the world’s best marketers talk about how recession can lead to troubled times for one particular type of retailer: the one that’s bang in the middle. This is the brand that is neither premium nor low cost. It is that huge space that occupies the middle market and when finances get tighter it’s just easier for customers to walk away. (For a great article on how premium luxury has no fear of recession, read Luxury Stands its Ground by Mark Ritson.)

Pumpkin Patch sits right in this middle space and, contrary to their belief that they are an ‘innovative retailer’, they have over the years become just another middle of the road brand.

I would argue that when they first launched they sold uniquely designed, well-made, age appropriate clothing out of natural fabrics, such as merino wools and other fibres that New Zealand is known for. They were an immediate success in New Zealand and very quickly became one in Australia. As I’ve mentioned in the past, New Zealanders are fierce supporters of all things home made and ‘Brand New Zealand’ has a premium all of its own too.

So what has happened to that delightful little label? I suspect the same thing that happens to many delightful little labels as they grow up: they start focusing mostly on their bottom line and don’t keep as close a watch on their brand.

Pumpkin Patch now seems to make average-quality, above-average priced clothing in the same designs that low cost retailers such as Target produce. They use a lot of synthetic fabrics such as acrylic and polyester, and just about – if not everything – is made in China. These are not reasons in themselves for A brand’s downfall, but they are all reasons for THIS brand’s downfall. This is not what they set out to be and this is not what attracted loyal customers to them back in 1991.

I have a 2-year old daughter and before she came along I had no idea how determined and researched a customer I was going to become. Authenticity, heritage and craftsmanship are things new parents are prepared to pay a real premium for. For everything else there is Target. I wanted to buy from Pumpkin Patch (because I would argue that expat New Zealanders are even fiercer supporters of NZ products than those living there) but I never did.

There is a Pumpkin Patch in a premium retail position on the children’s floor of Melbourne’s huge Chadstone Shopping Centre. This is the shopping centre where mums are literally lining up as doors open at 9.30am – having an outing with their prams, passing time before baby naps or just being out of the house for a change. There are many children’s stores down there such as Fiona Scanlan’s BIG, ESPRIT, Gumboots, Early Learning Centre, SEED, Cotton On Kids (I’d argue the most successful of the lot). Then there’s always Target, David Jones, Myer etc. There’s a lot of competition and clothing from Pumpkin Patch simply doesn’t stand out.

Before writing this blog I did a quick survey of a few mums about what they thought of Pumpkin Patch. Here’s what they had to say (and I’ll add to it as comments come in):

  • “I reckon it’s pretty crappy – I don’t like the designs and it’s pretty overpriced for what it is.”
  • “NQR (not quite right) as in age inappropriate designs. Also quite expensive but they’ve had sales most of the year.”
  • “My sister gets an esale email almost every day.”
  • “I find the designs a bit naff and the fabrics are all fakes like 100% acrylic cardigans”

If I could end on a few words of advice for Pumpkin Patch, as I’d like to see it get through this and find a strong niche, really I would.

  1. GO BACK TO YOUR HERITAGE, back to Pumpkin Patch 1991. What did you want to stand for then? Be honest with yourself, do you stand for that now?
  2. If you want to continue producing largely mass market designs out of fairly average fabrics, DROP YOUR PRICES. Become a lower cost retailer. There’s a market for that: see Cotton On Kids, Target et all as examples.
  3. If you want to stick with the higher priced label IMPROVE YOUR DESIGNS AND QUALITY. Start producing truly exceptional pieces out of beautiful natural fabrics. You may even be able to charge even more and get more profit from fewer customers.
  4. DO SOME MARKET RESEARCH. Talk to mums, talk to your current customers, old customers, non customers. Look around at what successful and unsuccessful children’s retailers look like. Work out your position in the market.
  5. DON’T TRY AND BE EVERYTHING TO EVERYONE. Don’t be afraid to lose customers if it means you can get more from better ones.

These are a few of the New Zealand children’s labels that I think are stealing Pumpkin Patch’s premium customers. Hopefully they don’t go down the same path as they become more and more successful.

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