The trend for parents to splash out on prams and buggies is not a new one, but recently we have seen spending hit new levels.
The overall baby and children's retail market grew slowly at 1.7% CAGR from 2012-17, in line with the flat UK birth rate (fewer babies = fewer purchases!) and sluggish GDP growth. However, the baby home and travel (H&T) market, which includes items such as prams, buggies and car seats, grew at a faster 4% CAGR as parents have opted to trade up to higher priced items.
Purchasing a pram or buggy is by no means a purely functional decision. This is an emotional purchase and, for many, somewhat of a status symbol.
Choices are often influenced by the designer prams used by celebrities. Sales of the Silver Cross Balmoral, dubbed as the 'Rolls Royce of prams', and priced at £1,500, were massively boosted when it was widely known to be the transport of choice for Prince George. More recently, Anne Hathaway caught the press's attention when she opted for a version of the Cybex Priam designed by Moschino's creative director Jeremy Scott.
The desire to go all out on the pram purchase is especially prevalent among first time parents; they are more likely to spend more on one-off purchases and are drawn to branded products. Second-time parents are more likely to use the products they already own or, if a replacement is required, gravitate towards more reasonably priced products.
Both online and specialist retailers play a significant role in a parent's purchase journey, from initial research through to final purchase.
Online communities are important platforms to collect recommendations from fellow parents as well as basic product information. Mintel suggests two thirds of parents trust online communities for recommendations. However, first-time parents value the expert advice available from associates in specialist retailers, a level of service which online retailers cannot directly replicate.
While mid-market operators still maintain the largest share of H&T retailers, premium specialist retailers follow closely behind. Online is also increasing with the likes of Amazon having expanded its offer at competitive prices.
Brands are meeting these design-led preferences: Joolz offers personalised buggies with monogrammed baby names, fabrics and wheels to meet demand for customisation. Other trends include designer collaborations, such as designer Rachel Zoe's collaboration with Quinny, Jeremy Scott with Cybex and Silver Cross and Aston Martin with a high-end pram retailing for a mighty £3,000. There have also been new entrants to the market, such as luxury house Fendi launching its own logo-clad pram.
Investors, too, are backing the growth in the market: Bain Capital Private Equity acquired premium brand Bugaboo for an estimated €200m earlier this year to facilitate its next stage of growth.
We see this trend continuing with more upmarket ranges being introduced, more collaborations and more celebrity endorsements. To win in this market, brands will have to work to understand their customer to ensure their products have the right mix of desirability, functionality, design and price point.