Koi Food, Services Among Top Sales Drivers for Pond Retail Sales
Retailers increasingly turn to foods and services as the pond equipment and supplies segment becomes more competitive.
While equipment for ponds is increasingly a tough sell on local pet store shelves, pond specialists and independent aquatics retailers have had success offering foods for pond fish while focusing on education and customer service.
Most aquarium-focused stores do not carry pond equipment. Rather, pond specialty retailers and pond installers garner most of the equipment sales in the category. However, pond food options are still popular and provide independent aquatics retailers with yet another repeat sales item to attract customers.
“In Austin, the pond hobby is pretty popular,” said Melissa Ellison, assistant to the manager for Austin Aqua-Dome, a tropical fish store in Austin, Texas. “We’ve always carried pond products, and we try to get new and updated stuff. The people who come in here needing pond products are … typically new people wanting to come into the hobby and try their hand at it. We do get a lot of repeat sales with pond food, that’s for sure.”
The trend in the industry has been for retailers to increasingly rely on maintenance, installation and repeat sales to stay competitive.
“Business models have changed,” said Andy Lam, owner of East Bay Koi, a koi fish and pond supply store in Oakland, Calif. “It’s definitely turned more to maintenance. … I’m start-to-finish. I offer full-service pond builds, construction and maintenance. I also directly import koi from Japan.”
Pond-related retail sales, however, still remain a challenge, many retailers reported.
“This year has been good for us,” said Mike Lucas, owner of Garden Ponds and Aquariums Unlimited, a pond supply store in Moore, Okla. “Installs are up, the maintenance service is up, everything in our entire company is up, except for retail sales. Retail sales are about $10,000 less per year every year. We’ve seen a declining trend year-over-year, since around 2012.”
Still, the category isn’t all doom and gloom. Offering pond diets allows most local shops to capitalize on a segment of the pond hobby that often performs well—fish food.
“In the pond [industry], there are very distinct customer bases,” said Chris Clevers, president of Hikari Sales USA, a Hayward, Calif.-based manufacturer of aquatic diets. “Very high-end consumers want the best product they can find and understand the benefits of higher feed efficiency on their pond environment and maintenance workload. Mid-level consumers are looking for products that maintain the health of their koi and offer some color enhancing or growth benefits. Finally, more casual pond keepers, who may have goldfish and other types of fish in their pond, are looking for a more general food at a lower overall feeding cost.”
Many customers are price sensitive, but retailers concur that those who are dedicated to koi in particular are willing to spend on high-quality dietary offerings for their fish.
“There’s two different types of customers,” Lam said. “There are those who want to spend as little as possible, and those who are koi-crazy and truly care about their koi. The true koi connoisseurs will spend their money on high-quality food.”
Education and Repeat Sales
Aquatics hobbyists often need guidance when it comes to making the best food selection to promote fish and overall system health. In the case of pond diets, however, customers are especially apt to take the advice of retailers, industry insiders reported.
“Customers almost always buy whatever we recommend,” said Pam Nunnally, manager for Azalea Aquariums, an aquatic pet store in Richmond, Va. “Either they come in knowing what they want, or they ask and we make a recommendation and they buy it.”
Lam said that customer education is key to maximizing the sales potential of the category.
“I focus on having a conversation with customers that come in,” he said. “You have to educate them.”
Though it can take a lot of effort for retailers to educate shoppers properly, doing so builds consumer trust and encourages repeat sales.
“Education is a pretty a big component of what we do and takes quite a bit of time,” Lucas said. “When we educate a customer well, they’ll come back and get their chemicals and everything else from us. Repeat sales are roughly 85 percent of our sales.”
Knowing the local market makes a significant difference in helping to drive sales, as well, insiders reported.
“Spend some time collecting information on your specific marketplace so you have a good idea what your area’s pond keeper mix looks like,” Clevers said. “Try to become involved with local pond and koi clubs to gain even more information. This is a very social group, and the time invested could pay off handsomely.”
Facing the Competition
Brick-and-mortar aquatics retailers face many of the same pressures in the pond equipment and supplies category that are present in the wider aquatics industry, as consumers are increasingly likely to go online for their purchases. However, having the right products in stock when a motivated shopper walks in the door is often the best way to compete.
“We get a lot of customers who ask if we can match prices for pond products they find on Amazon or through other outlets,” Ellison said. “We try to work with them as much as we can, but most of the time, they’re happy because they can get what they want right then and there.”
The trend toward private labeling foods is partially driven by this competitive pressure.
“That’s part of why we do private label,” Lucas said. “We notice a big difference, because when we sell private-label food, it’s difficult for customers to comparison shop on the internet. That’s a benefit for us.”
Stores set up to do installations have an advantage here, as they can directly market products, such as pumps and other equipment, to customers while in the process of planning and installing a water feature.
“We have a retail location, and we also do pond installations,” Lucas added. “I sell customers my own welcome kit with my private-label chemicals. That builds loyalty. Obviously, we sell skimmers, filters and pumps that way. When we do installs, customers will generally go with what we recommend. When customers see the displays we have in-store, they want to do it themselves or have us install it.”
While many customers still visit retail locations for their pond food products, there are those who prefer the convenience of shopping online.
“It’s difficult,” Lam said. “Everybody buys on Amazon these days, to the point where it’s killing my margin. There are customers that don’t even want to bother driving all the way down to the shop. They would rather make a few clicks and buy food on Amazon. Amazon has completely destroyed the retail market.”
No matter what, all aquatics retailers can benefit from carrying pond foods and equipment on their shelves. The potential for repeat sales is substantial for stores that nurture and maintain a loyal and growing customer base. And most customers prefer to visit as few locations as possible to purchase what they need, so retailers that offer a comprehensive product assortment stand to benefit.
“Pond foods and other supplies should be in the mix,” Clevers said. “It’s too large a category to ignore, and the customer base typically has money to spend.”
That said, retailers that really want to leverage the category’s sales potential need to be prepared with not only the right products, but knowledgeable sales staff, as well.
“The key is, retailers should have a pond expert on staff or spend some time training their team to be able to address pond keeper issues reliably, as this group tends to be well educated,” Clevers added. “… If retailers chose not to offer pond-related products, they are forcing their customers to go elsewhere.”