Pet retailers can win with the right omnichannel strategy.
Pets have long been considered part of the family, but in recent years, their role in our lives has reached a new peak. As a result, the pet industry is booming, and it offers a real-time case study on how omnichannel retail and personalized marketing tactics are helping businesses see unprecedented success. Sophelle recently completed a thorough industry analysis on the pet sector. We’ve developed a robust report with recommendations for retailers seeking success in the industry. Here are the highlights…
The Pet Industry Is Booming
Pet industry sales hit $123.6 billion in 2021 and are forecasted to reach $154 billion by 2025. How is this possible? For starters, more of us have pets than ever before.
According to the American Pet Products Association’s most recent survey, 70% of households reported having pets in 2021 (up from 56% in 1989). That figure is expected to rise over the next five years, driven by key demographic groups including single-person households, Millennials, Generation X, and the aging population.
Beloved family pets are our exercise buddies, best friends, Instagram heroes, and stress relievers. Today, pet owners treat pets more like people than like animals. For example, consumers want human-grade food for their pets, leveling up to fresh, frozen, and made-to-order diets.
Moreover, owners seem to like the experience of customizing food, supplies, and services for their pets. Pet parents are buying an unprecedented amount of clothing, grooming products, toys, and accessories—all purchases they consider non-discretionary.
But pet owners aren’t the only ones driving industry growth—service providers are also playing an important role.
From pet-friendly patios and special menus to “yappy hours,” restaurants are joining the growing pet economy. Business is also booming for pet grooming, pet care, pet transportation, pet hotels, and other services focused on keeping animals happy and healthy.
The Pet Industry Is Recession- And Pandemic-Proof
The pet industry has been recession-proof for decades. In the past 10 years, favorable pre-pandemic macroeconomic conditions and increasing pet ownership (and the accompanying demand for pet products) accelerated industry growth, with a sales CAGR of 5.7%.
And even after the onset of the pandemic, the industry continued to thrive.
Pet retailers, most notably Petco and PetSmart, have experienced robust sales during the COVID-19 era, with online and brick-and-mortar retailers noticing a spike in demand and a bump in sales as pet owners stock up on staples like food and litter. Many consumers also gravitated online during the pandemic to purchase competitively priced products conveniently.
Additionally, an uptick in pet acquisition has generated a sales boom for higher-ticket pet goods such as habitats, carriers, bedding, and grooming tools, along with purchases such as toys and accessories.
The Future of the Pet Industry Is Digital
The pet industry is expected to continue growing, with new trends, movements, and technology in goods and services leading the way. Industry experts predict long-term, sustainable demand. In other words, the pet industry market is solid, stable, and only getting bigger—and its future is digital.
Check out our handy primer on the pet industry trends you need to know about.
Most consumers are already gravitating toward the convenience of online shopping to purchase products for their pets. A Statista Database Report from 2020 found that 45% of pet owners were motivated to shop online because it was more convenient than going into a store. And combining the sale of goods and services with ecommerce delivery and curbside pickup will dramatically accelerate revenue growth. The only thing better than being able to purchase pet products anytime, anywhere is not having to get the dog out of the car!
While approximately 75% of the market is held by mass merchandisers such as Walmart and Costco (27%); veterinarians selling prescription-based products (25%); and national big-box specialty stores like Petco, PetSmart, and Pet Supplies Plus (24%), online e-tailers such as Chewy have captured 10% of the market, indicating that digital direct-to-consumer will have a growing share of the market in the future.
It’s critical that manufacturers and retailers adapt their business models to capture meaningful market share in the digital space.
An Omnichannel Strategy Offers Pet Retailers a Competitive Edge
Competition to be the best pet industry retailer across all channels is fiercer than ever. The bar is so high that pet owners expect a genuinely immersive end-to-end shopping experience, both online and in-store. Big-box retailers, such as Petco and PetSmart, are no longer the only leaders in the industry. Direct-to-consumer brands such as Amazon and Chewy.com are promoting their own brands to disrupt the market and eliminate intermediaries’ margins.
But where there’s competition, there’s also an opportunity to win.
Successful pet retailers should develop and deploy inter-related, distinctive omnichannel capabilities that significantly influence the customer journey and support a unique experience at each touchpoint.
Five key omnichannel tactics can help pet retailers gain a competitive edge.
- 1. Marketplaces needed where customers want to be
To accelerate consumer experiences, retailers need a cohesive omnichannel strategy that’s consistent across all locations and devices. They are no longer confined to a few brick-and-mortar stores and an ecommerce website.
A pet retailer’s omnichannel strategy must now extend to social media platforms and other touchpoints such as in-store digital tools. The most successful retailers will capture and activate customer data to grow relationships and deliver a seamless experience across coordinated channels.
- 2. Customer insights and retail analytics needed to understand customers
Robust data analytics enable retailers to build better audiences and understand their customers by analyzing purchasing pathways and optimizing the marketing mix.
Pet retailers can examine critical metric-based statistics, execute personalized marketing campaigns, customize in-store and online experiences, and optimize customer lifecycle management based on consumer and sales data.
- 3. CRM needed to nurture relationships
Omnichannel pet retailers must utilize customer relationship management (CRM) solutions to improve retention funnel stickiness, accelerate engagement, manage loyalty programs, build advocacy, and increase customer lifetime value by incrementally raising the KPI.
Savvy retailers use a CRM solution with customer data platform functionality as the primary tool for clienteling, managing loyalty programs, and building communities with integrated social media share functionality.
- 4. Omnichannel capabilities needed to meet customer demands
Today’s consumers expect brands to offer various options for purchasing and picking up their orders, such as curbside pickup and BOPIS. Pet retailers that provide these expanded fulfillment options are well-positioned to meet customer demands.
- 5. Service needed to deepen relationships
By adding service offerings such as grooming, pet sitting, and training services, retailers can continue deepening relationships with customers and earn their business in multiple different areas.
The pet industry is rife with opportunity, and competitive retailers will be most successful when they leverage omnichannel tactics to better serve their customers.
Are you curious about the pet sector and want to learn more about our industry analysis? Please get in touch with Sophelle for a full report.
We base our recommendations on in-depth research and our wealth of experience. If you need a proven team of ecommerce professionals to support your growth, please contact us, and a Sophelle Practice Leader—not a sales rep!—will get back to you.