Pet Businesses Seek Online Revenue
Brick-and-mortar pet stores aren’t going anywhere soon, but more and more retailers are recognizing the advantages of e-commerce and attempting to grow online sales.
The focus on e-commerce makes sense. According to an October 2016 report by IBISWorld, Online Pet Food & Pet Supply Sales market research report, revenue from online purchasing of pet food and supplies increased in the five years leading up to 2016 at an annualized rate of 8.9 percent. The revenue from online sales now totals $4.9 billion, with the industry, as a whole, continuing to experience year-on-year growth.
So why is e-commerce becoming such a popular option? Online shopping offers convenience and choice, and it can be a great way to provide customers with detailed product information. These days, customers like to research their purchases online; and a strong and effective web presence can drive traffic into a brick-and-mortar location.
The influence of millennial pet owners on online sales is also significant. Millennial households in the U.S. spent a total of $10.6 billion on their pets in 2014, according to Packaged Facts’ February 2016 Millennials as Pet Market Consumers report. According to a June 2016 UPS whitepaper, UPS Pulse of the Online Shopper, in 2016, U.S. shoppers between the ages of 18-34 made 54 percent of their purchases online, which means it’s vital to offer e-commerce to capture millennial sales.
With this is mind, Pet Product News spoke to three businesses in the industry to find out more about how they are going about building online-based revenue streams, and the challenges and successes they’ve had implementing e-commerce offshoots to their businesses.
Chuck & Don’s
Chuck & Don’s Pet Food & Supplies is a pet store chain offering brand name, specialty and hard-to-find pet foods and supplies. It has 36 locations—25 in Minnesota, 10 in Colorado and one in Wisconsin.
The company is thriving, and it was featured on the Inc. 5000 list of fastest-growing companies in the U.S. in 2016. Chuck & Don’s recently moved into the e-commerce arena after acquiring Fetch, an online pet food and supplies retailer based in Minneapolis, earlier this year.
The company places customer experience at the heart of its efforts to repeat the success of its stores in the competitive online space.
“Because there are so many online retailers out there, we have to ensure that the Chuck & Don’s experience is consistent throughout all online and brick-and-mortar options,” said CEO Thomas Murphy.
The recent acquisition of Fetch is part of the company’s ongoing plans to become the leading pet supplier in the region. Chuck & Don’s recognizes the potential of e-commerce to bolster brick-and-mortar sales and offer greater choice and convenience to its customers.
Dog.Dog.Cat. is a retailer in South Lake Tahoe, Calif. The company has a loyal customer base in the area and is exploring options to expand its business with e-commerce.
“We maintain our website for customers to find and learn about our business with the intention of capturing them as brick-and-mortar customers,” said co-owner George Richter. “It is frequently the pattern of customers to check out retailers online before coming in to make a purchase. I fear without a decent website, customers would assume we have a poor selection in store—or not find us at all.”
For now, Dog.Dog.Cat. is offering products on Amazon using the Fulfilment by Amazon service. This allows the company to take advantage of benefits such as low shipping and advertising costs, and reach a wider audience for its products. However, with most sales currently being generated from the company’s brick-and-mortar location, it remains the focus of the business.
Looking to the future, Richter said the company plans to explore new ways to identify niches and strategies to build a profitable online business. Recent developments include an improvement in online product selection, locally targeted SEO and an update of the site to a newer platform.
Oscar Newman & CocoTherapy
Illinois-based business partners Charisa Antigua and Carmina O’Connor sell luxury pet clothing and accessories under their Oscar Newman label. They also offer organic coconut oil-based treats and supplements under the brand name CocoTherapy.
Although the business generates most of its revenue from selling wholesale directly to stores, it also sells to a growing consumer demographic that often prefers to shop online. After listening to customer feedback, Antigua and O’Connor found people were having difficulty tracking down the products they wanted to buy due to the limited stock that distributors were able to carry and the absence of stores in close proximity to many of the business’s customers. Determined to change this, they decided to develop an e-commerce platform as a way to offer their entire product line to loyal customers around the country.
In the future, the company envisions e-commerce playing an increasingly significant role. Antigua puts this down in part to the spending power of millennials.
“The millennial generation is generally marked by an increased use and familiarity with communications, media and digital technologies,” she said. “They tend to shop online and listen to referrals or reviews from their peers via social media.”
The company has faced several challenges related to offering e-commerce. When starting out, it was difficult to build awareness of its sites, direct traffic and convert visitors to buyers. Today, the challenge lies more with the ongoing effort to retain customers and manage customer service, inquiries and feedback in a timely manner.
After investing time and resources in e-commerce, there have been a number of tangible benefits, including the ability to quickly and easily reach target consumers when launching new products, and the capability to effectively test new promotions and special offers.