The Death of the Independent Pet Store?
How can small independent pet stores survive in a rapidly changing industry?
The pet store industry is highly concentrated. PetSmart and Petco—the two major players—account for 60 percent of total revenue. The remainder of the industry is made up of small chains of pet stores, small franchises and family-owned stores.
In recent years, pet industry growth has been fueled by a wave of consolidation that looks set to continue. Increasing numbers of companies are being bought out, and the market share of the two big boxes is only expected to grow in the next five years.
The main players are proving difficult to beat on some counts—lower prices, wider product selections and the convenience of online sales being three major selling points for consumers. Some small stores have struggled to compete, resulting in decreased revenue and even store closures.
Despite this, many small pet stores continue to thrive and grow—carving out a unique place in the industry and offering benefits that can’t be found at the big-box stores.
Keys to Success for Small Retailers in the Current Marketplace
A useful resource for small pet retailers is this year’s IBISWorld Industry Report, “Pet Stores in the US. The report identifies several key factors for success in the industry, giving guidance on how to stand out from the big players and grow a successful business.
Among the key factors most relevant for small retailers is the importance of employing a capable and trained staff. With the ongoing trend toward the humanization of pets, pet owners increasingly value a connection with staff that have knowledge of the industry and the products best suited to their pets.
Small stores are well positioned to take advantage of niche product marketing and cater to a particular demand—for example, personalized diets for pets. The great advantage for small independent stores offering this approach is the high level of customer service that can be delivered.
Trained staff can assist customers and offer personalized advice that the big-box stores simply can’t compete with. With the difference in price between the big boxes and the independents being relatively insignificant, many pet owners are choosing to shop at small stores that offer the level of customer service and advice they require.
The knowledge and personalized advice small stores can offer represents an advantage over the big-boxes, but the increase in e-commerce still remains a threat to independents.
According to Packaged Facts, the purchase of pet products online grew 38 percent in 2014, with around a third of pet owners now buying pet products online. This is a trend that small pet stores would be wise to consider. Small retailers are often intimidated by the cost and logistics of keeping a large enough inventory for online sales, but drop shipping can be a relatively simple and cost-effective solution for small stores who want to offer e-commerce.
Aside from creating a personalized customer experience in-store, the best way for small pet stores to stay competitive is by extending the customer experience online. To stand out in today’s marketplace, stores should cultivate a strong web presence, offer online sales, and market directly to existing and prospective customers.
While it’s true that the big-box stores are staking a larger claim in the industry, stores that look closely at consumer trends and adapt to the marketplace are proving they have the resilience to succeed into the future.
Richard Rowlands is a writer and marketer for the pet industry, and a keen pet enthusiast. He works with pet businesses to improve their marketing and increase profits. To find out more, please visit his website.