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7:47 PM   September 18, 2014
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Grab a Slice of the Stimulus Pie

Federal legislation could provide tax benefits and increased sales.
By Deanna Glick

Retailers can encourage customers to pump up the economy with their rebates. (Courtesy of Birken and Bailey’s)
Thanks to the federal government, taxpayers will soon have more money to spend. And there’s no reason why they shouldn’t be doing that in pet stores.

With a little marketing savvy and simple promotions, retail experts say pet stores could easily grab a slice of the $152 billion Economic Stimulus package passed earlier this year in an effort to rev up the nation’s sputtering economy.

The measure will provide a total of about $106 billion in tax rebate checks, due in mailboxes beginning this month, including up to $600 per working individual and $1,200 per married couple plus $300 per child for families with children. The legislation also provides new tax incentives for job-creating business investments.

According to the National Retail Federation, most of the money will be used to pay down debt or bulk up savings accounts. But about 40 percent of it—nearly $43 billion—will find its way into the marketplace. Those in the pet industry say retailers should start working now to see that some of it spent in their stores.

“The reason you can be comfortable you can get a chunk of that rebate check is that pet owners are going to go to pet stores anyway to buy food,” said Barry Berman, founder of NexPet Retailer Co-op, adding that the key is to entice customers to spend a few extra dollars on impulse buys. “The main advantage pet retailers have is that pets are cute and that gets people’s attention. They can use that cute factor to compete against other retailers. A couple of fun ideas with a tie-in to Uncle Sam would help.”

Promotional Prime Time
Beyond the chance to beef up sales, retailers who plan to improve software systems and expand or remodel their stores also stand to benefit from the legislation (see Business Builder on page 55). For those with a taste for a smaller investment, retail experts suggest it’s prime time for a promotion. Simply offering discounts and spending as little as $100 on a banner or fliers and a few hours planning an in-store event could boost overall sales, one treat or toy at a time.

Attractive displays of items can encourage pet owners to splurge. (Courtesy of Moochie and Co.)
“The idea is to give added value to what government is giving away,” said Doug Poindexter, president of the World Wide Pet Industry Assn. “Any time things are tough, you don’t sit around. You work to drive traffic to your business. Retailers should be doing that stuff anyway, but particularly when the economy is soft. During these times, people tend to turn toward home and family, and pets are a part of that. People may not be buying big TVs, but they can buy a $2 toy for their dog and the dog goes nuts and they’re happy.”

Add-on sales are particularly important for success in the pet retail market, Poindexter said, adding that impulse item sales, along with the 40-pound bag of food customers have to buy, are key to raising profits.

Maureen Meister, owner of Natural Pet Wellness Center in Hamburg, N.Y., said she may do some external marketing but mainly plans to capitalize on her current customer base.

“We have a good-size client base, and if we get those people to get an extra treat, that would be great,” she said. “They are your first and biggest source of revenue. Just putting something gimmicky at the counter might make them spend an extra $3.”

The time is also right to reach out to new customers with markdowns and advertising to increase store traffic. Berman suggested holding an event or competition that involves bringing pets into the store. A pet fashion show is always fun. Or have a kids’ art or photo contest in which they submit pictures of their pets. Retailers can offer free treats to participants who bring in entries along with their pets.

“It’s a way to overcome the hesitation of people to go out and drive, spend money on gas and shop,” Berman said. “It’s an activity. It’s not a good idea to remind people times are tough, but it’s a good idea to remind people about their pets. I think it’s important to do any in-store event that involves the relationship with their pets and bringing them into the store.”

Advertising Strategies

The Checks Are in the Mail 

  • Plan a sidewalk sale
  • Put up patriotic decorations
  • Pay a person to dress like the Statue of Liberty and hold a banner outside the store
  • Organize an in-store event, such as a kids’ art contest or pet fashion show
  • Print up fliers or have buttons made to advertise promotions
  • Offer “gas money” coupons equivalent to the cost of a gallon
  • Hold a no-tax sale
  • Offer rebate check-cashing services
  • Donate a portion of sales to charity to appeal to customers’ emotional side of spending
Whether throwing an event or a sale, dressing up a person like the Statue of Liberty on a street corner with a banner, or having employees wear buttons that provoke buying ideas for customers, Pacific Store Design Inc. owner Chris Miller said a successful marketing strategy is all about emotion.

“People like to be entertained,” he said. “Seventy-five percent of retail sales are impulse. So that means for every $10 a person plans to spend, there’s another $30 burning a hole in their pocket. You have to separate customers from their wallets. We need to find a way to occupy space in our customers’ minds. People buy for two reasons. One is to feel good and the other is to not feel bad.”

For this reason, retailers may be able to aspire to more than selling a few extra treats after customers receive their gifts from the government. Mike McCahill of Retail Store Planning Inc. said retailers need not be afraid of reminding their customers that they have this money and that they should be spending it to stimulate the economy.

“Don’t be afraid to put it out there,” he said. “Another ad is another ad, but reminding them they have this money and that it’s for stimulating the economy is important. It’s our job as retailers to get that money back into the market. The majority of the economy is supported by small business. That’s the engine.”

In any case, Miller said, any promotion timed for when customers receive a windfall should be worth the relatively small investment of time and money.

“The time spent on planning could be a five-minute meeting in the back room or an hour at home the night before,” he said. “You might spend $50 to $200 on buttons or fliers. Selling one extra fish tank or puppy during the promotion and it works for free.” <HOME>


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