As competition from online giants such as Amazon intensifies, brick-and-mortar retailers are expanding their in-store and online pet supply game with on-trend food, treats, toys, services and more.
“E-commerce is challenging most market norms, and the internet more broadly is transforming the rest, such that bold steps are required,” according to the market researchers from Packaged Facts in their U.S. Pet Market Outlook, 2018-2019. The result, according to the Rockville, Md.-based firm, is a surge in innovation across all channels.
From all natural, protein- and nutrient-rich pet food to tech toys, today’s cat and dog supplies are increasingly high quality and driven by the idea that what’s good for people is good for their pets. Supermarkets are embracing the idea with new product assortments and shopper resources.
The website of Cincinnati-based Kroger Co. invites shoppers to “find specialty pet store quality, right where you already shop!” The grocer has added more than 90 new items, including natural, organic and grain-free pet food, as well as limited ingredient and specialty diet choices.
Bentonville, Ark.-based Walmart has a content-rich website that offers shoppers guidance on everything from how to shop for quality pet food to managing pet allergies to resources for new “pet parents.”
At a Store Near You
When it comes to heavy and cumbersome pet supplies such as cat litter or 20-pound bags of dog food, consumers are increasingly looking to online purchasing and home delivery options. This can curb traffic to grocers’ in-store pet aisles.
Pointy, a tech company based in Dublin, is hoping to change that with the creation of a device that drives traffic from search engines to the shopper’s local store.
Using a small electronic device that connects a barcode scanner and point-of-sale terminal, the Pointy box records the barcode number of a product each time it’s scanned, thereby automatically filling a store’s online Pointy page with inventory.
When shoppers Google pet supplies and more, the search generates local retailers using Pointy that have the product they seek.
“Our goal at Pointy is to make it as easy for a customer to find something in their local shop as it is to find it on Amazon or another e-commerce giant,” says Charles Bibby, the company’s chief technology officer, who co-founded Pointy in 2014 with Mark Cummins.
The device is also designed to be easy for retailers to install and use. “It’s plug and play,” says Brad Romero, owner of Ben’s Barketplace in Roseville, Calif., a natural pet store, which he describes as “Whole Foods for dogs and cats.”
Romero has been using Pointy for two years with positive results. “I think it works really well,” he says. “In searches, we come right up—sometimes ahead of PetSmart and Petco. That kind of validation is huge. By using Pointy, we’re leveraging our online presence in a way that gets more customers into our physical store.”
Pointy requires a one-time payment of $499. There are no monthly fees. The price includes the Pointy device, a continuously updated product page and a product listing in organic Google search results.
Once in store, shoppers at Ben’s Barketplace experience the retailer’s unique differentiation, namely personalized nutrition consultations with each pet.
Ben’s Barketplace also specializes in raw cat and dog food. “We sell more raw pet food than anybody in the West: 500 pounds a day,” says Romero, who is a former canine trainer for the California Highway Patrol. He believes raw pet food is the way animals were meant to eat. “That’s how we extend lives,” he says.
“Online retailers like Amazon and Chewy.com offer dried food or freeze-dried. They tried raw and [because of delivery issues] it didn’t work,” he says. “We avoid competing with those platforms because of our variety of raw food and our customer service.”
Ben’s Barketplace recently expanded, opening two additional locations in the Sacramento area this year.
Better for Benji and Felix
The “U.S. pet industry continues along a healthy growth trajectory,” reports Packaged Facts in its recent U.S. Pet Market Outlook, which values the market at $26 billion. Pet food is the largest pet category, representing 39% of the total market, and it’s growing—up 5% in 2017 and 2016 respectively, according to the company.
“Much of the growth in the pet food market can be attributed to the rapid acceleration of online sales, particularly with behemoths Amazon.com and Chewy.com,” says David Sprinkle, research director for Packaged Facts. “Internet sales of pet products are outpacing and even stealing sales from other channels, notably pet superstores.”
But, as Ben’s Barketplace has discovered, with increasingly health-conscious consumers seeking more nutritious and wholesome options for their furry family members, offering a selection of raw and fresh pet food may provide brick-and-mortars with a competitive edge.
Scott Morris, co-founder of Freshpet, a Secaucus, N.J.-based supplier of fresh, all-natural, minimally processed refrigerated dog and cat food, is helping grocers take a “fresh first” approach to the pet aisle and drive sales in-store.
“As a refrigerated product, Freshpet creates much more purchase frequency than when a consumer buys a 20-pound bag and doesn’t come back to the store for weeks,” Morris says. “It creates a constant consumer purchasing cycle up to 50% faster than traditional pet food.”
Launched in 2006, Freshpet “gently cooks” its cat and dog food using pasteurization to retain the health benefits of the ingredients.
Freshpet is focusing on sales through brick-and-mortar stores, including Target, Albertsons and Whole Foods. “It’s not really available online,” says Morris. As a result, retailers avoid “showrooming”— when consumers visit a store to shop a product and then purchase it online.
“About 7% to 8% of pet food is now sold online,” Morris says. “Five years ago, it was zero. Seven percent or 8% may not sound like a lot, but it’s starting to be a big deal.”
With quicker purchase cycles and a lack of online presence, Freshpet is driving premium pet shoppers to the store more often, Morris says. “The margins are also significantly above where the category usually is,” he says.
Today, Freshpet is sold through 18,000 stores across the U.S. “Retailers who have had the most success with our products put the fridge in a highly visible area,” says Morris, pointing to Target, which brought in the product a couple of years ago with the idea of merchandising it on an endcap only during the line’s introduction. “It did so well, they left it on the endcap,” he says. When customers encounter a refrigerated case unexpectedly, it disrupts their shopping behavior, and they stop to take a closer look, he says.
While Morris says Freshpet represents 2% of national dry and wet dog food sales combined, in some stores, where the refrigerated case is in a highly visible area, Freshpet represents 10% to 12% of the store’s total dog food sales.
In October, two national retailers will expand their refrigerated pet food sections to 8 to 12 feet of refrigerated case, creating an “island” of fresh pet food, Morris says.
“Retailers know how powerful fresh food is,” he says. “We’re changing how retailers think about the pet category by putting fresh first, and taking the same ideology surrounding the perimeter and bringing that to the center of the store.”
Billed as the most attended pet industry trade show in North America, SuperZoo was established by the World Pet Association in 1950. At its June exhibition in Las Vegas, SuperZoo press contact Kate Blom-Lowery identified natural food and treat products, pet technology and “made in the USA” as top trends.
“Made in the USA is a big deal right now,” says Peter Ostapowicz, marketing communications specialist for OurPet’s Co. in Fairport Harbor, Ohio. OurPet’s showcased its new electronic cat toys, feeding solutions, waste management solutions and Tootsie candy plush dog toys at SuperZoo.
“An increase in quality is also something that retailers are putting an emphasis on, especially in food, drug, mass,” says Ostapowicz, whose company works with grocers such as Kroger and Publix. “We’ve seen demand for high-quality products in pet stores, and now we’re seeing that from grocery stores because they know people care about their pets.”
OurPet’s cat toys and Pet Zone brand of stainless steel pet bowls are its biggest sellers in supermarkets.
When it comes to pet supplies sold online vs. in-store, Ostapowicz sees advantages for both. “Customers want to see and feel a toy while they are grocery shopping,” he says. OurPet’s electronic toys especially lend themselves to in-store exploration, so shoppers can see what the toys do when turned on.
Consumers are seeking satisfying sources of lean protein, from beverages to snacks and ready-made meals, like never before. Why shouldn’t Spot enjoy the same diet?
“Today’s pet parent is educated on pet nutrition, willing to research ingredients, and simply wanting the best for their four-legged family members,” says Rashell Cooper, marketing director for Redbarn Pet Products, Long Beach, Calif.
With that in mind, Redbarn recently introduced Protein Puffs, a low-calorie, protein-packed treat for cats and dogs.
Redbarn partnered with one of the largest human-grade caseinate suppliers in the world. Caseinate is a milk-based protein commonly found in food products such as protein shakes.
“As we strive to listen to our evolving pet parents and their purchase decisions, we’re particularly proud of this partnership, as it allows us to focus on the progressive health and wellness mindset for cats and dogs,” Cooper says.
The healthful treat is packed with 75% protein and essential amino acids and is less than 1 calorie per treat. And Protein Puffs are made in the USA.
Free of grains and artificial preservatives, colors and flavors, Chewy Louie is Redbarn’s new line of dog treats and chews. These minimally processed chews made from natural ingredients also act as stress relievers while supporting a dog’s dental health.
Tech and Mortar
“The Pointy service works well for every brick-and-mortar retailer, whether they’re an independent or a chain, as it allows them to display their inventory online in real time in a way that is optimized for local search,” Pointy Co-Founder Charles Bibby says.
Getting customers in the door is step one. Following up with a personalized shopping experience once in the store is the key to building repeat business.
“Use technology that creates a personalized in-store experience,” Bibby says. “Today’s customers want informed, customized experiences in which retail professionals make recommendations tailored to their specific needs and create an in-store environment that cannot be mirrored online. Technologies such as Bluetooth beacons and interactive displays can help retailers to achieve this.”
Blue Apron for Buddy?
With the heightened focus on pet nutrition coupled with consumers’ constant demand for convenience, what’s next? Meal-kit delivery services for pets?
Packaged Facts has named home-delivered pet food as a U.S. pet food industry influencer in 2018 and beyond, pointing to companies such as PetPlate and Just Right by Purina. The researchers report that nearly one-fifth of pet owners are using home delivery of pet food (whether customized or noncustomized orders).
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