Why New Zealand brand Nature Baby is investing in community stores

over 20 years ago. Can you tell me the story of launching the business?  Jacob Faull: It started off as a traditional needs-based business. We found out we were going to have a baby and started to shift our view towards what our baby would need. We came from art school, so we were always looking at ideas where there was some form of enlightenment. We believed that if we made something, we needed to know where it came from, who made it and that it was made in a really authentic way, so that when it got to the end user, it had an integrity that would give the user a form of happiness or connection. We weren’t consciously thinking about it in that way, but that’s what came out of the whole process.  Before we had our baby, we spent two months travelling through India and saw a lot of the agricultural and garment practices that were there. From there, we went to London, and we ended up living in the East End, near the Spitalfields Market, which was a melting pot of artists, designers, and activists, and had all these stalls of people who were consciously making things.  We’d had this adventure through India, seeing all these practices that we had never experienced, coming from a dairy-farming country like New Zealand, and then through London, where there was a strong conscious consumer market. That created a bridge between supply and consumer that informed the rest of our business. It happened to be a baby business because we had a baby.  Nature Baby co-founder Jacob Faull. Photo by Kate van der Drift. Supplied IR: I love that you went on a literal journey to start your business. Is India still an important part of Nature Baby’s supply chain today?  JF: All our organic cotton comes from India, and we still work with the same supplier we started with over 20 years ago. He and his wife are about the same age as us – late 40s – and they were trying to sell organic cotton fibre for their uncle who was a cotton farmer, but no one wanted to buy it. So they started up a manufacturing business, predominantly for babies, and they moved from primary resource to tertiary product. IR: I imagine you have a very close relationship with that family? JF: We do, and we’re doing a lot of other work in the sustainability space [with them], from recycling in Mumbai, to supporting women’s collectives. You think you’re green in New Zealand, then you go to India, which is incredibly full, and you come across these pockets of makers, and they have the most beautiful practice that would put any high-end Western production to shame.  IR: A lot has changed in the retail industry since you launched in the late 1990s, from the rise of online to social media. How has Nature Baby adapted over the years? Do you feel like there’s been a big evolution of your brand, or have you stayed true to the original concept? JF: As far as the core concept, we’ve stayed true to it as we’ve grown, but the methodologies of how you get there have changed. Our business was born when we were still receiving faxed orders at home. We translated it into an online store quite quickly. We had a splash page, where we could have our phone number and fax number, and we grew that.  Online and mail order have always been a big part of our business, and I think a natural channel for the baby market, because you don’t have to try things on. Parents are stuck at home and they can’t get out, so we’ve always had this natural attraction to wanting to service people at home.  Along that journey, we’ve also looked at how we can tell that story of sustainable and organic products. How can we seed our brand in people’s minds so they understand what we do? We came up with a showroom concept, where you have organic cotton clothing, you have natural foam mattresses wrapped in Egyptian cotton and wooden cots from Germany, as well as natural teats from Switzerland and botanical skincare. It’s quite different from an online experience, because you’re seeing it all online, but you’re not putting it all together.  All of our stores are on high streets and in historical buildings, with warm textures and interiors that either reference something homely or industrial. Parents can go in and see the full natural and sustainable world for their baby. It’s not an underground movement, which it was back [when we started].  Photo by Kate van der Drift. Supplied IR: How many Nature Baby stores do you have in New Zealand today?  JF: We have three, so two in Auckland and one in Wellington. We love the idea of not having too many stores and making them real destinations that bring together all those aspects that I was talking about. We’re not talking about fast growth. Over 23 years, we could have been a lot bigger, but we really focused on the supply chain and keeping it as authentic as we could, but at the same time trying to reach as many people as we could. IR: How much of your offering is products that you make yourself versus third-party?  JF: We’re about 80 per cent own brand, 20 per cent third-party.  IR: If you think about the past 23 years, what stage would you say Nature Baby is at in the journey right now?  JF: We’re a mature business for the New Zealand market. In terms of an international market, there’s a lot more growth, which everyone would say, because the world is wide. But where we would differentiate from other brands that are solely clothes brands, and why we haven’t been able to grow as quickly, is because we have the whole [offering].  Businesses like ours exist in small pockets in Germany or California, but [most of the time], you either have a small baby boutique, or a big chain store. There’s no beautiful in-between that happens to be organic and sustainable and has a full offering. We believe there’s a lot of room for growth in that model, but it will take a more sophisticated supply chain and operations, which we’re currently developing. IR: Are you looking to expand into any other markets beyond Australia?  JF: We’re focusing on the Southern Hemisphere at this stage, [due to the seasonal nature of apparel], but at a stretch, we’d be looking at the West Coast of the United States.  IR: Why do you think you were interested in offering a full range of products at Nature Baby, rather than just sticking to clothing? Was it about filling a gap in the market? Or did it come about more organically?  JF: Going back to our art roots, we were interested in the lighting, the textures, the fittings, the bags, all of it. We were very focused on that from the start. At the same time, because we were our customer, we were naturally doing it in a customer-centric way. We could only get it to a certain level for a period of time, but as we’ve grown, [we’ve continued to expand it].  The latest store that we launched, in Auckland, was a community store. We saw what we were doing with our product range and we thought, ‘What is it that our customers really need?’ They really need help on this journey, which is new for everyone. No one knows what they’re going to go through. It’s always a shock to the system how much babies need from you. It’s really hard for parents. It’s really hard for mothers.  So we developed this space that has a community kitchen. It has a big, 9-metre-long wooden table and eight organic food brands that we work with. It’s a space for mums, dads, parents and caregivers to come in and have coffee or tea, to meet somebody, to be able to breastfeed. We’re also running practitioner workshops out of there, in terms of sleep, body, nutrition, and what to expect. As we started doing this, we saw a massive desire for people crying out for connection and information.  Photo by Kate van der Drift. Supplied We’re never going to fully help solve all the problems for everybody, but we can sort of nod and say, ‘This is a time when you’ll need a lot of support. Here are some of the wise women of the village.’ We tapped into one midwife, and she was amazing. She told us about these other people in the space who didn’t have a physical space to work out of, because the work was so transient, so we set up a practitioner room that we charged a nominal fee on.  We figured, if we supported them to create their businesses to support mothers, then they would be able to run these workshops in-store to support our parents. It was incredibly complicated as we found out, but the genesis of it is this beautiful idea of support.  We’ve been experimenting with that. Within our 250sqm store, about 50sqm of it is the community space, which also drives traffic to the store. The store drives about 30-40 per cent more traffic than a store that doesn’t have that community space. It’s interesting for us that people love that space, and also interesting from a business perspective and how it can drive customers. IR: What a great idea. When did you launch that? JF: We launched it just after New Zealand came out of lockdown, so in November last year. It’s still new, but it’s a concept we want to explore a whole lot more. It’s so great to work with people who are doing great things out there with parents, and it’s a fun way to retail. It’s not just selling goods, it’s a whole connection with a community. IR: I’ve heard other retailers describe the baby space as a relatively stable industry because no matter what’s happening in the world, people generally continue to have babies. With that in mind, what do you see as the biggest growth opportunities for the sector and your business in the next one or two years? JF: We’ve had great growth over the last three years, which is partly due to Covid and to people being drawn to brands that have a care aspect to them, but also, in a statistical way, people are having fewer babies later [in life], when they have a higher disposable income and are more conscious and thinking things through. I’m not sure what effect that has on different ends of the market, but for us, we’re seeing more customers coming through.  In terms of our growth, we’re really looking to leverage the idea of local, community-based stores, but with a highly integrated and responsive digital platform. IR: What portion of your business comes from your online site compared with your stores? And how big a part of your business is wholesale?  JF: From a direct-to-customer perspective, it’s 55 per cent online, compared with stores. And then, if you’re looking at our overall business, it’s about 40 per cent online. We’ve also got wholesale, of course. We have 120 stores that we supply to, and half of those would be in Australia. IR: Do you see any challenges on the horizon for Nature Baby? And if so, how do you plan to tackle them? JF: Beyond the challenges of not being able to open during Covid, the big one for everybody is freight. That’s a complete nightmare – and cost and carbon burden. How can we get back to sea shipments that turn up within two months of when they’re due? That’s a big one for us.  As a business our size and with how we grow, looking after our team and taking them on the journey is important. I think the Great Resignation is real. It’s like a lot more sober version of what happened in the ’60s. They’re not going to Woodstock, they’re just going.  I think our challenge is how we attract those amazing people that go, ‘I understand where this company is going, and I can be a part of it. It’s this size now, but in five years’ time, the kids will not be buying anything different, and this is going to be a mainstream brand.’  I’d really love the team to be a part of that. From the days of art kids in the East End of London selling things ourselves, to running a team of 50 people – how can we bring them along on that journey?