Whether you wear a peplum on the top or bottom half of your outfit can make a huge difference to how it looks.
A peplum at the bottom of a fitted top can actually help disguise a thicker waist, and one set high on a high-waisted skirt can help cinch in your middle. Whatever you wear below the peplum should be fitted, otherwise you'll just end up with a really bizarre effect.
This might sound counterintuitive, but people who are a bit curvier often look the best in a well-placed peplum. The style draws attention to hips and waist, so if you don't have a lot of shape there it can look a bit strange. And peplums can be a great way to make a stretch, body-con shift dress work for a slightly fuller figure.
If you're wearing a peplum, the skirt should fall to just below your knee. The horizontal line it adds around your waist can give the impression that you have shorter legs than you really do, so don't add another horizontal line around your ankles - a court shoe or peep-toe is the only style that really works here.
This is a retro look so pick a modern fabric to update it.