Manufacturers go vertical with Baby Q.
Conventional retail in Germany is less and less satisfying for manufacturers of nursery products, especially when it comes to brand presentation. Meanwhile and recovering from long months of Covid the young target group is looking for a different shopping experience than wandering helplessly through the baby markets. The solution for both sides could be Baby Q. The concept of the new premium concept store was developed by manufacturers for manufacturers.
A shop with a cool spatial concept in a prime city location. Inside, a scaled back number of selected brand products, which are presented in brick-and-mortar and digital form with the same high quality as in a flagship store. The manufacturers sell these directly to the customers as contractual partners of the store. Still a vision? Not any more. The idea is called Baby Q and is just becoming a real option for manufacturers. The concept has already convinced several well-known companies within the nursery industry, including Bugaboo, Allison/Nuna, Träumeland and Axkid.
They will be presented as a brand partner when Baby Q’s eCommerce platform launches and the first shop opens in Cologne’s city centre shortly afterwards. In the coming years, another 12 to 14 stores are to follow in major cities. The Baby Q shops not only offer expectant and young families sound product advice from trained staff, but also invite them to workshops and parents’ meetings as new places-to-be. The concept store is accompanied by a lot of content about pregnancy and parenthood on the Baby Q blog, on Instagram, Pinterest & Co.
The People behind the Idea
Baby Q is backed by a team of experts who are well networked and experienced in the industry. The names of the founders – Michael Neumann and Oliver Beger – are virtually synonymous with long-term successful projects. Baby Q Managing Director Michael Neumann spent 25 years building the Maxi-Cosi brand into a generic brand and had last worked for Dorel Juvenile as Managing Director Northern Europe. Oliver Beger is the founder and Managing Director of the pram brand tfk – Trends for Kids. He supports Baby Q as an investor. Beger and Neumann are well known in the industry, not least through their voluntary work in the management of the Association of the German Nursery Products Industry (BDKH).
Assortment and Target Group
Baby Q’s core assortment includes classic nursery hardware: prams, child car seats, children’s furniture and more. “The range is distinguished, but not just for the ‘happy few’ who can afford luxury products,” emphasises Managing Director Michael Neumann. “We start in the middle of the market and move into the premium range with the branded products.” The presentation will also be refined. Thus, for each product category, only a reduced number of suppliers with selected brand products will be shown. “Parents are looking for orientation instead of an unmanageable variety. They want a range of the best possible products for their child without tediously researching ingredients, test ratings and standards. Families prefer to spend their time with their children. That’s also our claim: ‘Time for little Wonders'”.
Good Arguments for a Change
Why the Baby Q concept is a good idea right now is obvious to Michael Neumann: “Strategically developing the verticalisation of their business model will be one of the decisive success factors for premium manufacturer brands in the medium term. The German retail landscape is already dominated by a few big players for baby products, who are also massively pushing the issue of private label. Margins for manufacturers are low, prices are falling in the wake of discount battles. It is becoming more and more expensive for brands to compete in the market. With Baby Q the manufacturer can additionally be 100 per cent sure that the customer will receive first-class advice on his product – after all, we are the extended arm of our brands, so to speak.”
In Baby Q’s cutting-edge store, the brand partners reach pregnant women and young families and also use the digital extension to the eCommerce platform. “The entry into such an omnichannel strategy is worthwhile. The manufacturer retains pricing sovereignty and makes sales directly with the buyer for every purchase,” describes Michael Neumann the business model. “Our partners achieve higher margins and also collect valuable customer data.” Guido Schmidt, Head of Marketing & Digital Commerce Central Europe at Bugaboo and being one of the new brand partners, adds: “On the one hand, the Baby Q Premium Store Concept creates a sophisticated brand and product experience, and on the other hand, it ensures the optimal dovetailing of online and offline.”
Consumer behaviour has changed once again, not least due to the Corona pandemic. After lockdown and permanent home offices, people are increasingly looking for on-site shopping experiences with high demands on the products, the advice and the ambience. “We will create a store where people feel comfortable and can expect many services,” promises Neumann. The plan is to have modular sales areas for individual product groups and consultation areas with displays for a 360-degree interlinking of brick-and-mortar and digital shopping. In addition, there will be a café corner and a play area with room installations for children, small sitting, retreat and quiet rooms with calming nature scenes and sounds. Each store also has a multifunctional room where the brand partners, as well as midwives, yoga instructors or nutritionists, offer free events. The staff, trained as brand ambassadors, offer high-quality and socially competent advice and product demonstrations. “We also deliver the purchase to your home and assist with installation and set-up.”
The Brand Partners
Manufacturers who present their products as Premium Partners at Baby Q assume no entrepreneurial risk or costs for personnel, storage, rental contracts or marketing. The financial outlay for the manufacturer remains constant according to its contractual conditions. Here, the brand partner can choose between a monthly “all-in” brand contribution and a reduced brand contribution that allows Baby Q to share in sales. “The brand contribution is practically financed by the higher margin that the brand partners achieve and by the numerous additional added values that we generate for them,” says Michael Neumann. Baby Q’s team expects a best-in-class service from its brand partners. Product delivery and after-sales services for the customer should meet the highest possible standards. Product training and brand training for Baby Q sales staff is provided by the manufacturer. Cooperation in marketing campaigns is also recommended.
“Baby Q is a concept that contributes to our partners’ brands in many ways, it goes far beyond just selling products. We see ourselves as ambassadors and extended arms of our brand partners. Our activities support brand awareness, brand building, generate reach and much more,” confirms Baby Q co-founder Oliver Beger.
Should traditional retail now be afraid of the Baby Q concept? Managing Director Neumann does not see his concept store as competition: “No, Baby Q strengthens the brands of our partners and stimulates their demand, which ultimately benefits the entire retail trade. Also in terms of price and margin stability. And in many cases a visit to Baby Q will even prepare purchases at other retailers.”