Pet Retail Is Booming – Here’s How Retailers Can Enter This Space

The Ongoing Humanization of Pets

By Anders McGillis, Principal, Management Consulting at Jackman

In 2020, pets thrived – adoption rates skyrocketed, shelters struggled to keep up with surging demand, and the recession-resistant pet industry reached record highs. We’ve been treating our pets like part of the family for years but our emotional connection with animals only intensified as lockdowns, social isolation, and stress took over. Families with no pets found themselves housebreaking a pandemic puppy and many existing pet owners decided it was time to get Rover a brother (or at the very least a new bed and some great toys).

Pets have been a source of support in the absence of normal human-to-human connection — 87% of consumers say their animal has helped them emotionally cope with the pandemic. And we’ve rewarded them for it. According to Pethealth Inc., in 2020, animal adoption rates were up 110% and fostering rates surged 197% from the year before. And, the U.S. pet industry reached a record $103.6B in total sales.

With numbers like that, it’s not surprising that retailers of all types and sizes are taking notice and looking for opportunities in the pet space. To stay competitive, pet retailers need to really understand their consumers and zero in on the benefits they offer the humans who are doing the buying.

Pets Are People Too

The strong emotional bonds we have with our pets are not new — nearly 90% of American consumers say they consider their pets part of the family — but they have been growing, especially among millennials. Millennials are delaying traditional life milestones; they are waiting longer to get married, buy a house, or start a family, in part, because it’s too expensive to raise children. Instead, they’re choosing to be “pet parents.” In fact, millennials represent the largest share of pet owners in the U.S. by generation (31%) and they definitely see their pets as family. Over three-quarters of female millennials (76%) refer to their pet as their “fur baby.”  

The continued humanization of pets has meant that we’re spending more on our animal companions and seeking higher quality products. Annual spending on pet food among owners increased by 36% between 2007 to 2017. Even amid a global pandemic, nearly half of Canadian dog or cat owners report spending more on pet products than they used to. Consumers are extending several priorities they have when shopping for themselves to the purchases they make for their pets — they’re prioritizing health and wellness, sustainability, and personalization, to name a few.

In the latest wave (May 2021) of the Jackman Human Insights Study, our ongoing proprietary consumer research, participants said the most important factor when deciding where to spend their money on pet products is whether the retailer / business offers items that promote health and wellbeing. Pet owners also want to buy sustainable products for their pets. They want features like eco-friendly packaging, foods with sustainable ingredients, and toys made of recycled materials. Having a customized collar and monogrammed dog bowl is no longer enough, consumers want pet food customized to meet their pet’s health needs, personalized medications and wellness products, food sensitivity testing, and even doggie DNA tests.

The Pet Industry is Changing

The business world has seen this growing opportunity, and companies of all shapes and sizes are getting in on the action. In 2019, Walmart expanded its in-store vet clinics and introduced Walmart Pet Rx, in-store and online pharmacy services for pet prescriptions. In November 2020, the retailer launched Walmart Pet Care, offering pet insurance as well as dog walking and pet sitting services. Early this year, Tractor Supply also announced online pet prescriptions and on-demand veterinary advice accessible through the company’s app. Target continues to expand its own pet brand (Boots and Barkley) and has recently partnered with several DTC pet companies, including Wild One, Brutus Broth, and Jinx to sell their products in stores.

Other companies that historically focused solely on humans are getting in on the action as well. Ben & Jerry’s launched Doggie Desserts, made of natural, pet-safe ingredients. And, resale platform Poshmark expanded to the pet category, acknowledging that by not operating in the space, the company was “not serving [customers’] entire family.” A spokesperson for the company said they were excited “…about merchandise that expresses style, like leashes, dog hoodies and costumes that show the personality of our community.”

What Retailers Need to Do

Our love for our furry friends is not going anywhere but what we want for them will continue to evolve. As the values, behaviors, and priorities of current and prospective pet owners shift, here is what pet retailers should be thinking about:

  1. Reacquaint yourself with today’s (and tomorrow’s) pet owner. People are the ones doing the buying, so understanding how to succeed in the pet industry begins with understanding the person behind the purchase. It’s important to recognize how much has changed for them in the past 18 months and how many new customers you have. Consider what challenges or changes pet owners (both first time owners and those who had pets pre-pandemic) may be facing as they leave their pets alone for the first time in over a year and go back to work. Tell them how you can help.
  2. Lean into the benefit you provide rather than the products or services you offer. The pet industry is getting increasingly competitive, as non-pet retailers expand into the category and disruptive DTC companies continue to emerge. Understand that you won’t win on functional dimensions such as price or convenience. Instead, ask yourself what your target consumer needs — are they looking for expert advice, educational content, community connection, or customized solutions?  Then, be clear on who you are as a brand and the benefits/solutions you offer.  
  3. Don’t think about consumers as just pet “owners.” Pet owners consider their furry friends to be part of the family (or even surrogate children), and retailers should do the same. Consumers want the same benefits from their pet products that they look for when shopping for any other family member — whether that’s sustainability, health, or personalization, but they do show up. Help shoppers feel like they’re making the best decisions for their pet’s health and happiness by offering trusted expert advice and ongoing education.

The love we have for our pets will outlast the pandemic and, as a result, the pet industry will continue to boom. In order to capitalize on this growing opportunity, pet retailers (both traditional and non-traditional) must gain a deep understanding of the humans behind the pets and focus on the unique benefits they can provide to these pet parents.

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