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The Very Hungry Carter-pillar: How Carter’s Ate Up the Competition

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Kids’ apparel has been a tricky vertical to nail for many retailers. Previously successful brands such as Babies R Us, Gymboree, and Crazy 8 have failed to stay afloat, and some that have survived—like The Children’s Place—are shuttering stores. But despite the turbulence in the category, one company seems to be holding steady year after year: Carter’s.

The largest brand marketer of babies and kids apparel in North America, Carter’s owns two of the biggest brands in the market—Carter’s and OshKosh B’Gosh. The company, founded in 1865, has been around the block, but has outlasted and outperformed its competitors time and time again. Carter’s revenue has increased for 30 consecutive years, and it continues to expand to new locations, markets, and categories.

Carter’s is on fire, but what exactly is driving its achievements?

The answer lies in a combination of factors. Here’s our take on the 5 things that are contributing to Carter’s success. 

 

1. Strong and highly strategic partnerships with key retailers

Let’s start with the fact that Carter’s has partnerships with several retailers—including the three stores that parents shop at the most: Target, Walmart, and Amazon. 

But rather than just selling the same products to each chain, Carter’s creates specific lines with their own pricing and positioning to appeal to each retailer’s key shoppers. At Target, you’ll find Just One You By Carter’s, a line of  trendy outfit sets. Walmart, on the other hand, has Child of Mine by Carter’s, which leans towards basics and multi-packs. And for Amazon, the brand created Simple Joys by Carter’s, a line of baby and kids clothing sold in bundles.

It’s interesting to note that each line still has the name Carter’s attached to it. It’s a clever move, and it allows the company to stay top of mind for various consumer segments. So, whether you’re a high-income, digital-savvy parent with a Prime account or a budget-conscious shopper looking for deals offline, Carter’s will be on your radar. 

If you’re a brand that’s selling through multiple retail channels, you may learn a thing or two from Carter’s strategy. Rather than rolling out the same products and strategy across various stores, it may behoove you to tailor your merchandise and positioning for each specific retail partner. 

 

2. Expansion into new markets

Carter’s isn’t afraid to grow and expand into new markets. In 2018, the company launched Carter’s KID, a line designed for boys and girls sizes 4 to 14. The idea is to keep customers shopping at its stores, even as kids grow out of toddlerhood. Then in 2019, Carter’s expanded its preemie line to carry even more styles and silhouettes. The new products, which will be available in January 2020, will include inspirational slogans as well as “first holiday” designs. 

In addition, Carter’s is growing in international markets. It sells its products in retail stores across Canada and Mexico, as well as on ecommerce sites in Canada and China and international wholesale accounts. What’s more, the Carter’s and OshKosh brands are licensed internationally.

These efforts have paid off for the company, particularly in Mexico and Canada. According to industry reports, over 60% of Carter’s international sales are from Canada, and this will likely continue to fuel its overseas growth in the next five years. 

The takeaway? Keep finding ways to expand your existing offerings. Can you offer more products or services to get your customers to keep shopping at your stores? What can you do to tap into new markets? Cook up ways to grow and expand your business and see where it takes you.

 

3. Top-notch inventory and supply chain practices

The company has also tightened up its supply chain and inventory systems. Carter’s implemented a planning solution which allowed it to gain deeper insights into its supply and inventory, and thus make smarter decisions.  

The system makes it easy to get answers to “What If” queries and enables Carter’s to figure out what the company would do in various scenarios. It could, for example, ask hypothetical questions like “What if there was a storm in Bangladesh?” From there, it could determine the impact that such events can have on its supply chain, and plan accordingly.

Having quick answers to hypothetical situations reportedly helps Carter’s coordinate its supply and inventory moves, and thus have the right products in the right stores, at the right time. As a result, Carter’s has reduced excess and dead stock by 10% to 15% and increased its working capital by $25 million. 

This goes to show that your systems and technologies can make or break your business. That’s why it’s important to ensure that you’re partnering with the right solution providers. It’s recommended that you periodically review and optimize your systems and processes. And keep an eye on the market for new technologies and providers that can help you adapt and stay competitive. 

 

4. A laser focus on omnichannel

Carter’s continues to invest in omnichannel. While the company was a bit late to adopt ecommerce, it’s making up for lost time. In the summer of 2019, Carter’s relaunched its website to make it more appealing to digital shoppers. 

In Carter’s October 2019 earnings call, the company’s EVP and CFO, Richard F. Westenberger talked about the site’s improved navigation which “made the site easier to shop for guests and to assemble outfits and enhanced personalization.” Carter’s also re-platformed the website to optimize its performance on mobile devices.

“On the back-end, we’ve also upgraded our order management and call center technologies to improve response times, service and better integrate with our omni-channel capabilities,” he added.

Speaking of omnichannel, Carter’s has been making it a lot easier for customers to shop across multiple channels by launching same-day BOPIS. According to Westenberger, the capability allows the company to tap its in-store inventories and get items into the hands of shoppers in the most efficient way possible. 

Going forward, the company intends to leverage its in-store inventory further, by implementing store fulfillment of online orders. Carter’s started piloting the program in select stores, and Westenberger stated that the “initial test has utilized stores on the West Coast and has meaningfully improved service to our customers in this geography, resulting in delivery times of 3 days or less on average.” It’s possible that stores in other parts of the country will soon be able to improve service and speed delivery for more and more shoppers.

In 2020, we can expect shoppers’ expectations to grow even more, and modern shoppers will support retailers that make it easy to get their hands on the products they need, when they need them. Carter’s clearly recognizes this, and any retailer that wants to stay relevant should follow suit.

 

5. Attractive and convenient loyalty offerings

Carter’s loyalty program, Rewarding Moments, makes it convenient for customers to participate. Aside from being available at the company’s 3 key brands (i.e., Carter’s, OshKosh B’gosh, and Skip Hop), the program also lets members earn points whether they shop online or offline. 

And in 2019, the company integrated its loyalty program with Carter’s credit card, giving people extra perks—like double points and free shipping—when they sign up for a card. The results of the effort are yet to be seen, but according to Westenberger, it’s “off to a good start.”

While it’s too early to tell whether their credit card + loyalty initiative will take off, it’s clear that Carter’s is  continuously finding ways to improve its current offerings and retain shoppers. 

 

Bringing it all together

Carter’s success can be attributed to its nimbleness and willingness to grow and evolve with the changing market. From launching exclusive brands for specific retail partners to continuously improving its omnichannel offerings, Carter’s has certainly done a lot of things right, and we know that we’ll see more of the brand in the months ahead. 

 

Do you want to stay competitive and continuously exceed the expectations of your customers? Retail store managers use CB4’s app to ensure their stores are meeting shoppers’ needs each and every time they visit. Learn more.

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