Australian retailer Baby Bunting is pulling out all the stops to help shift its recent stock market lows.
As well as signing on two new exclusive hard goods brands in the first half of FY25 – Nuna and Bugaboo – the baby goods retailer is also investing further in private label products, particularly in the soft goods space. This includes an expansion of its babywear private label Bilbi in the second half of FY25, in a bid to double the size of its private label categories from 10 per cent of sales to around 20 per cent.
Bilbi's prices sit just over $30 for two-piece sets, with the range also including sleepbags, swaddles and bodysuits around the same pricing.
The brand also manages other private labels such as 4Baby and Jengo in the hard goods space, which includes prams and cots.
Including the retailer’s core hard goods categories – which drive a larger portion of revenue – its private label and exclusive brands offering makes up 46.1 per cent of total sales, with private label at around 9.5 per cent and exclusive sales at 36.6 per cent of total sales.
Speaking with Ragtrader, Baby Bunting CEO Mark Teperson says the soft goods market is a $3.4 billion market opportunity in Australia, and is nearly double the size of hard goods which it holds around 23 per cent market share in. Currently, the retailer holds around 3 per cent of the soft goods market.
“By increasing our share of this market by one per cent, we can access an additional $34 million revenue opportunity,” Teperson says. “We are doing this by focusing on babywear, apparel and other sleep related items.
“We have a strategy over the medium term to grow our private label products.”
As well as private label expansion in apparel, Teperson also remains focused on the retailer’s national brands in the space. Baby Bunting also stocks Bonds babywear, as well as Purebaby, Country Road, and Kynd.
“We intend to continue to focus on providing value to our customers, in the form of great value bundles for babywear essentials,” he sys. “Along with a range of seasonal or fashion driven items that provide moments of joy for parents.”
But that’s just one part of the overall revamp. Baby Bunting has also revised its store format, launching its ‘Store of The Future’ in Maribyrnong in Melbourne’s Inner-West – a redesign of the original 2,000 square metre format.
It is the first in a roll-out of new ‘Stores of The Future’ retail sites scheduled to open across the country over the coming years. And Teperson says it provides a better platform to merchandise its soft goods range.
“This includes better opportunities for seasonal ranges and visual merchandising to demonstrate to parents the range and value of what we can bring to market,” he says.
Amid recent research by the retailer, it found that over half of parents feel pressured to make ‘perfect’ choices when buying baby products. As a result, they find the experience of shopping for key items overwhelming and stressful.
Teperson says the new store format is designed to ease this perfection pressure.
“By leaning upon residential design cues, the warm and welcoming new environment feels like stepping into a beautiful and inviting home,” Teperson explains. “This new store is a place for parents to feel energised and confident, while still delivering the product value and range that they expect.”
“The new store delivers a highly intuitive layout and arrangement of spaces, leading with an industry-first activity-led approach to category segmentation. This design encourages a more engaging shopping experience for customers, creating distinctive ‘worlds’ that cluster associated products together (such as prams, carriers, car seats and accessories in the new ‘Travel’ category).”
Other design elements include a ceiling installation constructed entirely from glass baby bottles. There is also a new feeding zone, as well as an illuminated mural of the sky in the ceiling above the store’s ‘Travel’ category.
“Blending function with comfort and style, a very considered design also enhances the experience of visiting an on-site parents’ room,” Teperson says. “Leveraging hospitality design aesthetics, this zone puts customer comfort at the forefront with a tranquil space to relax, feed and change.”
According to Teperson, around four in five sales take place in its store network, which currently sits at 75 stores across Australia and New Zealand, with online sales making up about 20 per cent of sales.
Teperson says the future goal is to grow its store portfolio up to 110 in the long term.
“Our stores do online fulfilment and we have recently introduced same day/next day delivery services for online orders from our stores,” he adds.
“Our omni-channel network provides a great platform to ensure our customers have access to experience great service and to discover new products as well as servicing a way to provide convenient service across different channels.”
In the short term, there are already plans underway to revamp its existing network with the new store concept. The next store being refurbished is its Preston store in Victoria, which is scheduled to re-open in late May, followed by its Gepps Cross store in Adelaide in June.
“We’ll then enter into FY26 with a target to refurbish 8 to 12 stores and open 5 to 8 new stores in the new format, along with 3 stores in a new small format aimed at providing convenient services for parents in areas that’s part of the daily shopping experience.”
Teperson joined Baby Bunting in October 2023, just after the retailer hits its historical low of $1.21 a few months prior. The retailer's current price (as of writing) is $1.52, still below its historical peak of $6.58 in April 2021.