Case Study: ISIS Parenting Inc.

September 5, 2016   |   Chintu Patel, Tyler Cohen, Cody Tong

 

Background

Isis Parenting was a well-known for-profit family development program which provided classes, consulting and products for expecting and new mothers in the greater Boston area. Isis Parenting first opened its doors in Brookline in 2003 and over the course of nearly a decade, Isis Parenting rapidly developed into a chain that operated not only in Back bay, Needham, Arlington and Hanover, but also across the country in Atlanta and Dallas. The parenting resource centers offered childbirth classes, breastfeeding support, new-mom and baby groups, and courses for dads and grandparents -- along with the opportunity to buy all sorts of retail products while you happened to be there. Isis Parenting’s offerings attracted middle to upper class families in the Boston area that either were inexperienced or didn't have the time or resources necessary to raise a newborn. Overtime the customers not only fell in love with the services, but some even stated that the services were life-changing. After providing products and services for nearly a decade, the chain shut down all of its facilities in early 2014. As you may expect, the clients were shocked and truly devastated as Isis Parenting was the perfect resource in the community. One client even stated:

 

“I just am so devastated. This place was like a second home to me when I had my first. Getting to know the staff at the Needham location and always having a smiling face to greet us. I was looking forward to taking a class with my second in the spring. I'm just completely washed with overwhelming sadness and disbelief. Mothers and babies need you. This is a huge huge loss for the birth and baby community!”


 

Model and Structure

“Isis did one thing really well. And that was to make the participants in each of its classes feel like they were getting personalized, expert parenting advice”. Isis Parenting used this to its advantage and pitched this personalized program to local hospitals, which eventually turned into an avenue for growing its customer base. Isis became a vendor for nearby hospitals which developed into a valuable network. For example, the Needham-based Isis served as a “preferred provider” for childbirth classes at hospitals including Beth Israel Deaconess Medical Center, Tufts Medical Center, Brigham and Women’s Hospital, Massachusetts General Hospital, South Shore Hospital and North Shore Medical Center. In some cases, like at Tufts and MGH, some of the classes were conducted on site at the hospital. But at others, such as Beth Israel, all classes took place at Isis Parenting’s locations, and even the maternity ward tours were run by the privately-held, for-profit company.

Isis Parenting took parenting to a new level, they wanted to make sure all family members were adequately prepared for raising a newborn. They were committed to providing:

  • Comprehensive, and objective prenatal and postpartum information
  • Professional guidance and support for new parents
  • An integrated, multi-disciplinary response to the challenges of pregnancy and parenting
  • A nurturing and caring environment for expecting and new moms
  • A portion of revenues to resources for families in underserved communities
  • A stimulating and rewarding work environment for our professional staff

When it comes to the specific topics for each lesson, they covered almost anything you could think of. The topics ranged from swaddling a baby to birth control post-pregnancy to stress regulation in infancy and toddlerhood. Isis Parenting prided themselves on their great instructors and consultants. They were highly trained in child development and they were backed by years of experience.

Isis Parenting did focus tremendously on providing a personal class, but they also were extremely success by providing a wide selection of webinars and quick tutorials on YouTube. They still have more than 4,500 subscribers and some of its videos even have upwards to 15,000 views. Technology is the cornerstone to everything these days and Isis Parenting tried to tap into that in the most effective way possible. They were heading down the right path by providing personal care, but also providing a series of effective online tutorials that could answer most questions parents had. With this well designed structure and its relationships within the community, Isis Parenting grew faster than anyone could imagine and they even started dabbling in the retail industry. They were competing with big-box stores like Walmart and Babies-R-Us and this may have been were they went wrong.

 

Why Isis Parenting Failed

Isis Parenting had a loyal customer base, satisfied consumers, and a steady growth rate. The company had grown itself from a community-oriented parental education organization to a national retail brand.  As a brick-and-mortar store thriving in the 21st century, Isis Parenting seemed to be a success story for the records.  That was until the morning of January 15, 2014, when it suddenly closed its doors for good.  Without advanced notice, with no indication of corporate struggle, and amid a seemingly successful growing chain, Isis disappeared.  This sudden departure begs the question; what happened?

Identity Crisis:

Isis Parenting was founded to educate parents and expectant mothers about the journey they were about to embark on.  As it grew, organizational pressure to expand its model and raise revenue corrupted the founder’s mentality.  “At its core, Isis [...] was supposed to be a place for new and expectant moms to learn about childbirth and breastfeeding, and find postpartum support.” As it strayed from its original plan, the customer-centric organization failed to implement an efficient/cost-effective execution of its strategy.  As a once successful educational organization, it seems that the transition to a new business model and market strategy was the root cause that brought down the company.

Modernization:

With e Commerce giants like Amazon.com dominating the marketplace for years, the times have been difficult to open a retail brick-and-mortar storefront.  When operating in the physical product retail business, companies struggle to provide a differentiated value to their customers that they cannot find online. The fact that it is difficult, however, does not make it impossible. Issues arose when Isis selected its market as affluent and higher end than rival companies such as Babies-R-Us. By positioning itself as a luxury maternity store, Isis restricted its market share even further.  

Insurance Coverage:

Post-partum support for families is generally covered, to some degree, by insurance and healthcare plans during pregnancy and childbirth.  Isis felt additional pressures as a business because it “tried to charge for something that parents aren’t sure they should be paying for”.  As families are used to this care being packaged together with rest of the hospital bill, consumers found it difficult to place a comparable value on this service.

Profit Margin:

Destination Maternity is a great example of a chain that is still surviving in the maternity retail products workspace despite its heavy brick-and-mortar presence.  Both Destination Maternity and Isis Parenting faced the same market forces and exterior pressures from investors.  Why did one chain thrive where Isis failed?  The answer lies within the products each company sold.  Destination Maternity largely manufactured many its own brands and product lines. This effectively took out the middle-man and increased profit margin. It was able to achieve this efficiency due to its own economy of scale.  Isis, on the other hand, squandered its profit margin by simply reselling products and brands that were manufactured by a third party.  Not only did this diminish its bottom line, but consumers were able to find better deals for the same items (without the markup pricing) online.

Bottom Line:

The value that Isis provided to customers was its personalization of services. It was an educational services organization that tried to pivot to a retail product model. In that shift, Isis had lost its mission statement, and, therefore, its founder’s mentality. As the company tried to make a national product chain work, modernized market forces prevented its 20th century business strategy from working.

Key Takeaways:

Had Isis stayed true to its original mission to personally educate parents on bringing up a new child, it would still exist today.

 

Side Note

There were unconfirmed allegations of legal problems stemming from employee treatment within Isis Parenting. Since we could not confirm these claims, we decided to exclude them from our analysis.