Friend or Foe?
Everybody is getting into the pet specialty market, and the amount of competition micro independents face these days is unbelievable.
We are competing with huge “independent” multi-store operations, big-box stores, grocery and mass-market chains, online specialty and online mass-market sites. We might have to add another group to that list—our distributors.
Surely, that can’t be right, you might think. A distributor is crucial to the micro independent not only in keeping our shelves stocked, but also to work as our voice to the manufacturer for specials, promos and deals—not selling to end customers.
Recently, Phillips Pet Food & Supplies announced it had acquired PetFlow.com, an online pet specialty retailer. PetFlow made a huge splash in 2012 by being ranked as one of the most talked about retail and consumer merchandise companies on Facebook. At that time, it was second to Walmart. In that same year, Forbes magazine rated it No. 72 in a list of America’s most promising companies with revenue exceeding $72 million. That was around the time that other online pet food sites were coming to the market, so I’m not sure PetFlow has kept up that momentum.
In the news release from Phillips and the information that followed, the company was adamant to stress, “We will not compete with you.” Why would Phillips buy an internet retailer? It states in the release that local stores need tools to help them with technology changes and consumer demands for convenience. Phillips’ answer was to buy PetFlow and retool it to benefit independents. The distributor has already made changes to PetFlow that might be beneficial to the independents. For example, it has added an area on the homepage that says, “Shop your local store,” and the website must tie to visitors’ internet location, because when I visited the site, it had my store information. I do like that. Many times customers find out about a specialty product and assume it’s not available locally because they’ve never seen it in the big stores. If the consumer is looking at a product on PetFlow, they will see that there is a local option.
However, while I certainly see that as an advantage, I don’t like seeing my name associated with many brands that I do not recommend. As I was writing this, most of the “top brands” that appeared next to my store name were brands I do not carry or recommend. In fact, the first one listed is a brand I absolutely do not recommend, and I feel very strongly about the overall safety of that brand.
The announcement also mentioned that retailers will be able to offer items they don’t stock in their store by having them shipped to the customer and generating a profit. I know it’s early, but it sounds like drop shipping. Does drop shipping work for anyone? I’ve always been suspicious of those middleman-type companies. I just hear the carnival barkers yelling, “You can own your own business—no overhead, no inventory, no hassles of shipping!” If I’m selling something to the customer, I want to know it’s in stock, will be shipped when I say it will be shipped, and that if there is an issue, I’m in the direct loop to resolve it. Typically, that’s not the case with drop shipping. Here’s the thing: I don’t need help selling to the customers that walk into my store. I need help selling to the customers who buy their goods online.
The logistics behind all of this really make my head spin. If Phillips is changing PetFlow slowly to only benefit the independents, does that mean it will eventually stop selling online? What about products that are offered on PetFlow but not available in my area? There is a brand of dog food currently on PetFlow that Phillips does not distribute. Is PetFlow a way for Phillips to work around territory agreements? What happens if somebody visits PetFlow and there is no local retailer? Does that mean Phillips will sell directly to that customer?
I don’t like the idea of a distributor selling directly to consumers, but I suppose we need to get all the information and facts first. All that I have seen so far is an announcement and some PDF information on the company’s website. It states the official launch will be at SuperZoo and is encouraging people to stop by and learn more. Although I think a distributor selling directly to consumers is a violation of the distributor/retailer trust, I must give Phillips credit for taking the initiative and trying to figure out a way to get the independents on the computer screen in front of those internet shoppers. I encourage everyone to stop by Phillips’ booth and find out all the facts. You know I will.