By Joseph Tarnowski
Retailers discuss the challenges and opportunities in the fragmented pet category.
While the pet category may not be difficult to enter, it certainly is a tough one to dominate.
Aside from the large category killers such as PetCo and PetSmart, there are countless independent pet specialty shops, and just about every channel of food retailer – including supermarket, mass, drug and convenience – offers, at minimum, pet food staples. On top of this, retailers in each of these channels typically have an online presence as well, and added to this are the tone of online-only niche pet stores.
Indeed, there are many sources for pet owners to visit for food, products and information. At the Pet Path to Purchase executive roundtable, held June 2 during ECRM's Pet Food & Supplies EPPS event in Itasca, Ill., retailers from several channels – online and brick-and-mortar – discussed different ways in which they could enhance their relevance to pet owners. The event was moderated by Progressive Grocer and sponsored by Sterling, Ill.-based Wahl Clipper Corp., which provides products for the consumer personal care and animal-grooming industries.
Participating in the roundtable were Larry Anderson, buyer for food, grocery, cigarettes and pet, Fruth Pharmacy, Point Pleasant, W.Va.; Jeff Greenblat, senior category manager, pet and household, Bozzuto's, Cheshire, Conn.; Adam Salzwedel, buyer for HBC, food and pet, Meijer.com, Grand Rapids, Mich.; Traci Smith, pet category manager, Peapod, Skokie, Ill.; and Steven Yde, director of marketing, Wahl Clipper Corp.
PROGRESSIVE GROCER: What challenges do you face in launching new items in the pet category?
Traci Smith: We have trouble launching new things particularly, because our shoppers are habit-driven. Established customers have a previous order list on which everything they have ever ordered is saved. So first, they shop the weekly specials to buy whatever is on sale. Then they fill in whatever is left off of their list. We find that those who are searching the site are new visitors. We do have a new-arrivals area.
But if it's a brand-new brand or concept to the marketplace, we have a hard time launching it because we can't sample it. Since we're online, we don't have a store that they walk into and touch and feel the new product.
PG:Adam, since you handle online for Meijer, do you see the same challenge?
Adam Salzwedel: I do. That's where I struggle – launching new products, especially a non-national brand. When it comes to private label, it's the same thing. Sampling is definitely key. What I found does work is if you are selling normal pet items to your regular customer, drop a new product sample in the box for free, and they will come back and possibly buy it from you. But that takes a lot of moving parts to do.
Larry Anderson: We don't sample to shoppers, but we sample product before we put it in the stores to make sure it's what we really want to sell. In every one of our stores, we have a program where we encourage shoppers to suggest new items – for other categories as well as pet.
Salzwedel: When it comes to touching and feeling products, I was shocked to see some of the categories that did well for us without it. For instance, dog fashion does extremely well for us. You would think that would be one where you would want to feel the material. No. These customers dress their dogs up all the time. The same thing goes for dog beds. These shoppers want something that's on trend; they want something ... that accents their furniture.
Jeff Greenblat: For us, when it comes to new items, we check the depth of that vendor's product line, because it may not be worth setting up a vendor for two or three flavors of a bar. If a national-brand company like Mars or Purina launched a new specialty item, we would automatically try it because we are buying from the vendor every day anyway.
Steven Yde: We have done some extensive research on the relationship between dogs and the people that own them. And we found there is a distinction between a dog being literally an extension of the family and being viewed as an actual family member. And there is a difference. The families that view their dog as an actual family member like items [such as snacks that can be shared] because they treat their dogs as if they are children. But this group is not quite as large as we originally thought.
We originally thought that about half the dogs were considered members of the family. Just because someone is close to their dog doesn't mean they are going to treat them as a child. It happens more in your upscale areas, urban areas. We're studying where that line is drawn between the dog being an absolute family member or an extension of the family.
PG:What kind of competition do you face in your marketing areas when it comes to the pet category?
Anderson: Everything: Walmart, Kmart, independent stores, pharmacies, CVS, Walgreens. In all of our markets.
PG:Do you find that getting worse? A recent Black Pearl Intelligence study (see page 142) listed "pet stores" as the most popular web search term for the pet category. When we did that search, PetCo, Petland and PetSmart came up, but food retailers don't come up in the search results immediately. When they do, it's the mass retailers such as Meijer, Walmart and Target; then further down, a few grocers. So aside from those three major pet retailers, the industry is still very fragmented. [To Yde] Is this what you are seeing in the industry?
Yde: We deal across both independent small pet stores as well as mass and grocery and drug. And I think there really is some separation there. Typically, unless you are talking about people that truly have a pet that's a member of the family, they are not going to go buy the really expensive gourmet food or the all-natural gourmet food that's in the independent pet stores. But they are going to the pharmacy down the street. You know, Larry mentioned a couple brands that are pretty mass-orientated. And that's where the majority of pet owners are, and those are the ones you target for incremental accessories sales.
Greenblat: The retailers we service are so varied I have to put together different types of programs for them, and some participate in them, some don't. I put together the pet coupon book for May, for example, and the retailers that requested them saw great results and reordered them. Others don't focus as strongly on the category and view it as more of a convenience.
PG:[to Smith] Is Amazon is a very big competitor of yours?
Smith: Yes and no. We handle a consumer's complete shopping trip. Most people on Amazon are not getting a complete grocery order. We are replacing a shopper's in-store grocery shopping trip. Whereas if they are doing Amazon, they may be doing a couple things they need or want in bulk and ordering it once a month, and in that respect, Amazon isn't a competitor.
PG:How do you determine which pet accessories and other nonfood items to carry, and how do you work them into your overall pet assortment?
Anderson: I just manage the category daily and look at items. Like we order our products from quite a few different vendors, but not every store will have all the same items because they may not be right for a particular store. It depends on what the customer wants. It's a full-time job to manage it. But we found it to be beneficial to do it, because for the last three years we have sales increases in the pet category.
Greenblat: Do you buy from a wholesaler such that you can pick and choose what items you want to put in what store?
Anderson: The stores can pick and choose from the items I've approved. They get an order form, and then they pick and choose what they want from the wholesaler. The wholesaler then ships it to us at our warehouse, and we distribute it to the stores. Hartz Mountain is popular, a lot of shampoos, conditioners, flea collars, that kind of stuff.
Greenblat: Being a grocery distributor, we don't really deal with the general merchandise, but I did at my previous employer. And one of the things I learned is that while you may not necessarily sell thousands of Wahl clippers, ... to get the consumer down your aisle, you need to have a depth of assortment to make them feel like you are serious about the pet category. So there are some intangibles sometimes when you are looking at your assortment.
Yde: Jeff, you hit the nail on the head there. I'm going off the pet category for a second and give you a parallel example from our other businesses which also sell in grocery stores, and that's our grooming products for people. We have always struggled with this in grocery, because when people are buying groceries, they don't immediately think about other non-grocery-related items such as hair clippers.
But in our personal care category for humans, if the grocer displays only one of our products, it does not do well. But there are a couple of grocers that decided to [carry] three or four products, and all of a sudden the return on investment was fantastic. Because, as Jeff mentioned, when it looks like you are committed to the category, and your assortment doesn't look like an afterthought, consumers realize they can take care of a greater portion of their needs at that grocery store. If you don't portray to the consumer that you have invested in this category, it doesn't work.
PG:How are you leveraging social media to promote the pet category?
Anderson: In the month of June, we have a program in which every store builds an end cap for pet items. And I negotiated with a vendor so we could raffle off a couple of Purina battery-powered Power Wheels mini race cars for kids. These are raffled off as part of the display. Every store builds a pet end cap with a variety of pet items. We then post the pictures of these end caps on our Facebook page and have Facebook fans vote on which they like best.
Anyone who visits our Facebook page sees every store's entry and can vote on which ones they like. One entrant, a store in Charleston, W.Va., had almost 2,000 likes, which was really good.
PG:That means 2,000 people are seeing those end caps and what's on them. Now, what kind of impact does that have on the sales of those items on the end caps?
Anderson: Sales increased dramatically because a lot of items are new items that we want the customers to know we carry.
PG:Do you offer other types of engagement on Facebook relative to pet?
Anderson: We post information, which may be health-related, or fun facts, how to look out for something like ear mites, educational posts. These drive a lot of back-and-forth engagement between the fans and our marketing people, and if they have a question we can't answer, we will reach out to an expert who can.
Smith: We do social media. The challenge for us is that we try to make our Facebook posting common across all markets. So it takes care of our Stop & Shop and Giant shoppers, as well as those on Peapod. But our assortments aren't the same, so it's hard to do targeted posts.
We have done a few things tied into local events and charities that assist animals. Our social media person posts pet information regularly.
570 Lake Cook Rd, Suite 310
Deerfield IL 60015
Convenience Store News
CSNews Supplier Guide
CSNews for the Single Store Owner
Private Label ⇒ Store Brands
Independent Grocer Network
The Gourmet Retailer
Directory of Convenience Stores
Hispanic Retail 360
|© 2014 Stagnito Media. All rights reserved.|