Posted: Nov. 18, 2011, 7:50 p.m. EST
Keep business booming and bring in new hobbyists with smart marketing and close attention to detail.
By Ethan Mizer
|Image by Clay Jackson/BowTie Inc.|
It’s no secret that, as with many other enterprises facing one of the most painful economic periods in anyone’s memory, many aquatics retailers struggle to keep their businesses afloat. They’ve been hit hard by declining sales and increased competition.
A Growing Chance for Success
However, with all of this pain comes opportunity. With changing marketplace circumstances, aquatic pets now offer retailers the chance to stand out and capture market share back from competitors. There is a perception in the industry that both full-line pet stores and independent fish stores have a chance to return to the foundation of the aquatics business: selling livestock.
“In the last year, we’ve had an interesting uptick in our business,” said Scott Nash, CEO of Aquarium Retail Holdings Inc., the parent company that owns Allpets Emporium and Allfish Emporium, in Tamarac, Fla. “I can’t help the sense that there is a resurgence in this hobby, with the additional interest we’ve been seeing. Given that, if the trend is correct and it continues, I expect other pet retailers would be taking a look at [livestock sales].”
Part of the increasingly favorable conditions in the market is due to a developing niche regarding specializing in live fish.
“The big box retailers [only] dabble in live fish, as far as we can see,” Nash said. “We want fish to be our core competency, and we dedicate more space to live tropical fish. We see a niche there that is not being filled.”
Retailers aren’t the only people in the industry seeing growth in aquatic livestock sales. Sandy Moore, vice president of Segrest Farms in Gibsonton, Fla., a breeder and wholesaler of a variety of aquatic pets, said fish sales are on the upswing.
“Aquatic livestock sales are rising, especially in freshwater, as it continues to have a lower start up and maintenance cost,” she said. “Where consumers used to buy aquariums for the challenge of fishkeeping and breeding, we’re seeing a trend towards purchasing aquariums to own a piece of living art.”
Those in the fish store business have frequently commented that competition is their number one concern.
|Planted aquariums can make excellent in-store displays to help draw in and educate customers. Image by Clay Jackson/BowTie Inc.|
“[Some fish retailers] want to complain that the Internet is killing them, but they aren’t meeting the needs of what the consumer wants,” said Patrick Donston, owner of Absolutely Fish in Clifton, N.J.
Challenges from Internet retailers constitute a serious issue for pet retailers, but in attempting to win a difficult battle with entities potentially advantaged in overhead costs and price points, the inherent edge of brick-and-mortar stores’ ability to put live fish right in front of customers is sometimes forgotten.
“It doesn’t make sense to put money into dry goods, when you can put your money into fish and the margin is better,” said Jason Schneider, owner of Fish R Us, in Houston.
Others in the industry agreed, saying they see a superior business position for real-world retailers offering live fish, especially over Internet-based competition.
“I think it’s probably the greatest advantage we have,” Donston said. “I know this from talking to people at reef clubs. If you talk to most people who keep fish, you’ll hear that they really don’t want to buy them online. They’re forced to buy them online, because their local fish stores don’t carry what they desire. They prefer to look at them, see them eat and buy them in person.”
At bottom, brick-and-mortar retailers’ logistical considerations in offering live fish win the day. Where some see an advantage for Internet retailers in dry good sales, a similar advantage—based on the material needs of keeping, transporting and selling live pets—exists for physical storefronts in selling aquatic pets.
“Customers come into the store to buy the livestock, and somebody has to sell the live goods,” said Leroy Dyke, owner of Fish Safari in Virginia Beach, Va. “People want to see what they’re buying. They want a quality animal.”
Rather than bidding on a lot of fish sight unseen, or guessing as to what species they are agreeing to purchase, customers’ desire to actually be in the same room with the fish they are buying means real-world retailers can out-compete rivals in cyberspace.
“The Internet [retailers] nowadays, the ones that do offer fish seem to have higher prices, and people like to see the fish before they buy it,” Schneider said. “That’s the feedback I get. When it comes to dry goods, everybody is trying to cut each other’s throat. But when it comes to fish, you can’t really compare prices.
“Some of the advanced hobbyists have a lot of money invested in their tanks,” he added. “They want to make sure [they get] what they want, health wise.”
Drawing customers in with live fish and invertebrates isn’t a slam dunk, however, and several considerations go into effectively retailing aquatic pets. First and foremost, selection is vital. And a wide selection helps keep customers in-store for a longer period of time.
“It’s the No. 1 draw to their store and it keeps shoppers in their store,” said Steve Rook, senior vice president of sales and marketing for Rolf C. Hagen (USA) Corp., headquartered in Mansfield, Mass. “Fish are the only pets customers don’t get to physically engage with and hold. The great thing that happens when you’ve got a great selection of aquatic life in your store is that it’s beautiful: People will go into the fish department in a well-done aquatics center and stare at those fish for way past the amount of time they planned to spend in that store.”
Retailers consistently said that stocking a variety of species contributes to their success.
“I think why we have great success is I have the biggest, largest, most diverse collection of probably any retail fish store in the United States,” Donston said.
“In the aquatics part of the industry, [the pets] aren’t companion animals,” Donston continued. “It’s definitely more of a hobby. And hobbyists want to collect. You need a pull, you need a draw. Customers can buy dry goods online. You’ve got to have the collection of fish. It’s the draw; to me, it’s the best draw.”
To accommodate the demand for variety, and to open up new markets, retailers can consider expanding their saltwater offerings, or begin stocking marine offerings if they don’t already.
“We do about half freshwater, half saltwater,” Aquarium Retail Holdings’ Nash said. “Most of our money is made on the saltwater side. Saltwater fish are harder to take care of, and they’re more expensive. Those aspects keep some smaller retailers out of the saltwater fish business. However, they drive business in our fish room. They have a higher price point and they tend to have higher margins.”
Displays of Greatness
Though keeping tanks filled with attractive and saleable offerings is important, store owners also have to pay attention to how fish appear on shelves.
“Don’t think that having nice fish alone will sell fish,” Segrest’s Moore said. “Presentation, cleanliness and customer interaction are all vital to selling fish.”
Attractive displays filled with lots of fish do a good job of drawing customer attention.
“We have the back walls of our full-line pet stores lined with aquariums,” Nash said. “I think the color and appeal adds a lot to the store. As customers walk into the store and see the back wall with the color popping, we think that adds a lot to the shopping experience.”
Store owners reported using a variety of aquarium display approaches to sell live fish.
“It’s important that the tanks stay full,” Nash said. “Nobody wants the last fish in a tank.”
One traditional technique is to stock many smaller tanks with minimal décor and a wide variety of fish.
“We use a traditional display approach,” Fish R Us’ Schneider said. “All we do is fish. We have about 600 display tanks. We’re known for African cichlids and saltwater fish.”
Setting up over-the-top, beautiful or innovative setups designed to grabbed customers’ attention is a strong in-store marketing tactic retailers can use to rise above competitors.
“We have a large shark tank in each store, and that’s part of our branding,” Nash stated. “It’s a feature that draws people into the store, and it helps us prospect for new customers.”
A middle-of-the-road approach, featuring a mix of display and sales-focused aquariums, can build a shop’s appeal without cutting into its ability to offer a wide variety of fish.
“We have a few properly set up, nice displays with a lot of sale tanks that are less furnished, for our ease in setup and maintenance,” Fish Safari’s Dyke said. “[Retailers should keep] a nice planted tank, a nice reef tank, to show customers what they can do. The other tanks are maintained to be accessible, though with some decorations that can quickly be removed, so we can quickly sell fish. Also, this helps to prevent spooking fish.”
Sales and Education
Once retailers have customers in the store and “on the hook,” they may still need to offer incentives and additional inducements to make the sale.
“Promotions are key to driving aquatic sales,” said Mike Tuccinardi, sales associate with Segrest Farms. “Your livestock and dry goods distributors are constantly offering you promotions that will give you more variety and margin. Try three-for-$3 fish sales, or put tanks on sale when you get a great deal from your distributor. Mix up the promotions so they don’t get stale, and track the results so you won’t repeat a promotion that wasn’t effective.”
However, livestock sales promotions can have mixed effectiveness, according to some retailers.
“We do offer some promotions, and we’ll occasionally offer 25 percent off,” Nash said. “But our main marketing technique is our employees. Their care and attention makes customers more comfortable buying. Each of our employees is hig
hly trained. They have experience in the fish world.”
The need for educated sales staff is echoed throughout the industry.
“I think education is key,” Donston noted. “It’s one of the biggest responsibilities and one of the opportunities independent retailers particularly have. When the guest meets a knowledgeable person who is polite and has great sales skills, that’s really what sets [a retailer] apart.”
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