Posted: July 18, 2013, 12:30 p.m. EDT
By Anthony Stoeckert
Like all business ventures, owning a pet store is a 24/7 endeavor that involves developing solid customer relationships, tracking industry trends and remaining passionate about your operation. Yet another factor is competition, and in this day and age, when customers are presented with a barrage of options, developing and following a plan to stay ahead of the competition can be vital to survival.
"Anyone selling pet supplies is a competitor in a broad sense,” said Del Peterson, president of Northwest Pets, with locations in Eagle and Meridian, Ind. "The local and national pet store chains we have in our area and other local independent pet stores are our direct competitors.”
Peterson said those competitors can include national pet store chains, such as Petco and PetSmart, and stores like Wal-Mart and Target, both of which sell pet supplies. And of course, online retailers are a significant part of the mix.
Get in Line to Beat Online
Heidi Neal, owner of Loyal Biscuit Co., with three Maine locations in Belfast, Camden and Rockland, said her competition comes from other pet stores, grocery stores, Wal-Mart and "definitely online.”
Although we are well into the Internet age, one small business expert said some business owners remain unaware of how online retailers affect their bottom line.
"Physical competition is very evident,” said Bob Negen, owner of WhizBang Training in Grand Haven, Mich., which offers training and products to retail businesses. "The competition that isn’t evident, that isn’t obvious, is online. It’s amazing how many people lose competition online and don’t know it.”
However, Negen added, there are ways to usurp online competition: Focus less on the competition; focus more on holding on to your customers.
"The best way to get people to give [you their business] is to offer them a loyalty program,” he said, adding that when a customer joins your loyalty program, they are indicating approval of your store and your ability to track the types and frequency of their purchases.
For example, if a loyalty-program customer comes in to buy pet food every other week and then suddenly stops, you can then call or email them to determine the reason. Perhaps the pet died, or maybe the customer moved or is buying from a competitor. All of these answers can tell you something about your business.
"It’s as simple as picking up the phone or emailing and saying, ‘I haven’t seen you for a while and just wanted to make sure everything is OK with you and Buster or Fido,’” Negen said. "And let them respond.”
It’s a simple step people often don’t muster the courage to take, Negen added.
Another problematic Internet issue that occurs is "showrooming,” a practice where people enter a store, ask a lot of product questions and then leave to make purchases online.
A good salesperson sees this phenomenon simultaneously as a problem and an opportunity, Negen said.
"If you let somebody walk, it means you haven’t been very skillful,” he said, adding that keeping those customers often starts with your sales team.
"Selling is a skill,” Negen said. "The majority of independent retailers I know don’t have skilled sales teams. They have people who know their products and are passionate about pets, but they haven’t trained people.”
Some retailers reported that if you can’t beat ’em online, join ’em online.
"You might want to have a website and offer some products for convenience,” said Ellen Rohr, founder of venture capital and consulting company Bare Bones Biz in Rogersville, Mo. "Even better, make it an experience to visit your shop. Engage all five senses. Starbucks over-roasts its coffee so it smells strong and great. Pulls you into their store. What can you do with design, smells, things to do, to touch? Could you have kid- and pet-friendly activities?”
Northwest Pets made the leap and sells products online.
"I think one of the greatest threats to brick-and-mortar stores over the longer term is the potential for Internet sales growth,” Peterson said.
"Because of that, we launched our own online store several years ago and have worked hard to upgrade our Web sales platform. Online retailers offering free shipping on dog food orders over $50 and potentially same-day delivery could be a real challenge to us, but we do have the staff knowledge and personal touch that an Internet site can’t match. That won’t necessarily prevent showrooming of pet food sales in the future, however. This has already impacted the aquarium side of the pet industry, it seems. Internet competition impacts pricing, as well, which could erode our gross margins.”
Pet stores must find a way to stand out as unique from the competition, said Rohr.
"If you are perceived as the same, then price becomes the differentiation,” she said. "The low price wins. If you are cleaner, organic, sustainable, local, nicer, more humane, more pet friendly or whatever is perceived as different and better, you can woo folks from you competition and charge more.”
While focusing on your own operation is important, knowing thine enemy can help retailers stay ahead of the game. According to the U.S. Small Business Administration, understanding what works and what doesn’t for the competition can help retailers promote their own strengths and develop a niche. The organization suggested researching Yelp, Angie’s List, Google Reviews and local websites to shop the competition.
"We are constantly researching competitors,” said Chris Watts, co-owner of The Petropolitan in Dallas. "I check all their reviews and have my staff read them as well. It’s very important for us to understand what they are doing well and not so well.”
Loyal Biscuit Co.'s Neal said she gathers most of her information about competition from customers.
"We also visit the other stores to do price checks,” she said. "We don’t respond directly to any competition, really. We just keep doing what we are good at and continue to work to make us the destination of choice.”
Peterson said Northwest Pets researches one aspect of the competition by visiting the larger retailers.
"While we don’t secret shop our local independent competitors, we do visit the big chain stores from time to time,” he said. "We watch advertising closely to see what our competitors are doing from a promotion perspective. I am constantly price-checking our products versus online competitors, as well.
"We respond to all of this by trying to be price competitive but not necessarily the price leader,” Peterson said. "We focus on providing great service through staff training and an in-store experience that others can’t match. After all, customers can’t take their pet shopping online, which is still a big part of why our customers like visiting our stores.”
Discover What’s New
Offering the best new products is another way to keep customers and draw in new ones.
"We set trends,” Watts said. "We are not afraid to put ourselves out there and be the first ones to offer products. We are also so involved in all communities that we have a huge group of faithful clients because of everything we do.”
But deciding what new products to offer can involve a balancing act because offering poor-quality products can backfire, retailers reported.
"We are always looking for new products that the competition doesn’t have,” Neal said. "It can certainly be tricky because unless you can see the product first-hand at trade shows or events, it is hard to tell the true quality of a product. Many times, I will call and ask for a sample first so I can see just how well it is made and test them out on my own dogs. If it passes with them, then we bring it in.”
Monitor Price Points
Cutting prices to attract or keep customers might seem like a no-brainer, but most experts say it’s a bad idea. The U.S. Small Business Administration cautioned that a price war against new competition can result in such consequences as lowering the value of a store’s brand and product, making it difficult to return to a normal pricing structure, drawing in customers who care only about price and making your store seem like a follower, not an innovator.
Negen cautioned against price obsession, and said chances are there’s an online retailer that can offer lower prices than what’s possible for you. There always will be those customers who go for the lowest possible price, he said, and store owners must let them go.
"The concept is full value,” he added. "Full value is provided as you provide value in multiple ways, not just price. And you have to explain that full value to your customers.” <HOME>
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