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Gauging the Competition

Posted: June 21, 2011, 1:10 p.m., EDT

Seeking their piece of the fat, financial pet-product pie, hardware, lawn and garden, and housewares retailers become players the pet marketplace.

By Wendy Bedwell-Wilson

The pet industry represents a $50 billion-plus marketplace. No wonder other retail outlets want their share of the kibble.

According to the American Pet Products Association (APPA), United States pet industry expenditures are anticipated to exceed $50.84 billion in 2011, and an increasing variety of retail outlets have tossed their hats into the ring to cash in on some of that revenue.

“Right alongside fertilizer and shovels, shoppers can now find pet products, such as doggie doors and lawn spot removers sold at many lawn and garden stores, nurseries, and major home improvement stores, including Home Depot,” the APPA reported.

In addition to home improvement stores and lawn and garden centers, housewares dealers have also tapped into the pet product trend. A stroll through any Target or Bed Bath and Beyond reveals a growing number of shelves filled of pet toys, beds, bowls and more, said Bob Vetere, president of the Greenwich, Conn.-based trade association.

“Store owners recognize that almost two-thirds of their shoppers already have a pet. By upping the number of offerings and size of a pet specialty aisle and by cross-promoting to shoppers, the greater the likelihood of someone thinking that they can get some of their pet supplies while they are in that store rather than making an additional trip to the traditional pet retail outlet.”
—Bob Vetere, president of the American Pet Product Association
Why? Customer convenience, Vetere said.

“As gas prices have become ridiculously high, more people are rethinking the need to make multiple stops when shopping,” he continued, noting that many consumers shop certain stores, such as department, hardware and garden outlets, on a regular basis.

“Store owners recognize that almost two-thirds of their shoppers already have a pet,” he added. “By upping the number of offerings and size of a pet specialty aisle and by cross-promoting to shoppers, the greater the likelihood of someone thinking that they can get some of their pet supplies while they are in that store rather than making an additional trip to the traditional pet retail outlet.”

It's open season for retailers, and the pet-owning consumers are in their sites, said Perry Reynolds, vice president, marketing and trade development for the International Housewares Association in Rosemont, Ill.

On Hardware Stores' Shelves

Sue Kintz, merchandising buyer, trim/pool/pet/stationery for Ace Hardware Corp. in Oak Brook, Ill., said that the chain's full line of pet products includes:

• Chains, cables and stakes
• Collars, leashes and leads
• Dog toys
• Cat toys and scratching posts
• Bowls
• Cat litter
• Grooming
• Flea/tick control
• Stain/odor removers
• Pet houses, beds and cages
• Electric fencing
• Pet doors
• Dog food, treats and rawhides
• Cat food

Their best-sellers, she said, include the chains, cables and stakes; collars, leashes and leads; dog food treats and rawhides; and cat food and litter.

“Many Ace Hardware stores sell pet supplies to meet the demand of our customers, who are looking to have their pet supply needs met in one convenient location,” she said. “Our vision is to have a complete offering of pet supplies, allowing our stores to become the pet destination within their local markets.”
W.B.W.

“As long as pet ownership remains strong and those owners continue to treat pets as family, all retail channels have the opportunity to join in this category,” he said.

Hardware Adds SKUs

The hardware channel, which has traditionally carried a range of pet essentials, has bumped up its pet product SKUs, said Sue Kintz, merchandising buyer, trim/pool/pet/stationery for Ace Hardware Corp. in Oak Brook, Ill.

“Ace has carried pet products, in some form or another, for more than 20 years,” she said. “Most of the focus is on dog and cat products, but regionally, some Ace retailers carry equine and other animal supplies. Many of our stores carry a bird niche, often shown in conjunction with pet supplies, including wild bird food and birdhouses.” 

In the fall of 2010, the nationwide chain added more than 300 individual pet supply products to support the growing category, Kintz said.

“The pet team will continue to add and refresh lines as we approach the summer months with new products and trends in categories, including upscale pet food and trendy toys,” she said.
The customers who shop for their pets at hardware stores, Kintz continued, are those who come in specifically for pet products, as well as those who find it convenient to shop for all their home-maintenance needs from one destination.

To compete against pet specialty retailers and big-box outlets, stores like Ace Hardware capitalize on shelf space and low prices, she reported. 

“Hardware competitors have little or no space devoted to pets,” Kintz said. “And we offer favorable consumer pricing that's less than other pet stores and other pet specialty stores.”

 Lawn/Garden Stock 'Meat and Potatoes'

The lawn and garden channel has also opened its shelves to more pet products, reported Bob Mikulas, director of the annual National Lawn and Garden Show—so much so that trade show organizers decided to resurrect the pet products division.

“We did a pet event from 2000 to 2004 that ran in conjunction with the lawn and garden event, and we re-birthed it again this year,” Mikulas said of the event, which was scheduled for June 14 to 16 in Chicago. “The reason we’re doing this is we know from our previous history that there’s a lot of lawn and garden buyers that do buy some pet products.”

Mikulas sees an opportunity for pet product manufacturers to distribute their wares to a broader customer base.

“We feel that there’s some potential to have pet manufacturers look at different channels of distributions versus just going to traditional Global Pet Expo, H.H. Backer and those type shows, he said.

“Rather than hosting the big-box garden centers, such as Home Depot, Lowes and Walmart, the National Lawn and Garden Show draws “mid-tier buyers,” Mikulas continued. “It's much more broad based.”

What are lawn and garden outlet buyers shopping for?

“Mostly meat-and-potatoes stuff, like collars, leashes and bowls,” Mikulas said. “Some are doing dry and canned food, but mostly it's really basic merchandise. Not a lot of, say, holistic medical supplies or things like that.”

The hardware channel, which has traditionally carried a range of pet essentials, has bumped up its pet product SKUs as evidenced by these shelves at an Ace Hardware store.
The hardware channel, which has traditionally carried a range of pet essentials, has bumped up its pet product SKUs as evidenced by these shelves at an Ace Hardware store.
Housewares Extends Lines

Houseware retailers have also seen the value in stocking pet products, Reynolds said, and they have begun to integrate pet-related products into their offerings.

“There is significant anecdotal evidence that more retail channels are looking to pet products as a way to expand their business,” he said. “Kitchenware stores and chains are being selective, but they tell us that they are looking for unique pet items that will be attractive to their customers. Gift and catalog channel retailers seem also to have discovered that their customers respond to pet items. And several traditional housewares suppliers have begun to integrate pet-related products into their offerings.”

The foray has proven to be a lucrative one, he reported.

“The retailers who are carrying pet items are enjoying generous margins on these products,” Reynolds said.

He noted that rather than seeing themselves as pet retail competitors, housewares retailers view pet products as a natural extension of their product lineups.

“We don't think that many housewares retailers are aiming to compete with pet-specialty channels,” Reynolds said. “It appears that they are open to opportunities to showcase unique offerings that are an extension of their regular businesses.

“My cats eat out of bowls purchased at Crate and Barrel, and they eat in the kitchen,” he added. “That's a great tie-in for housewares retailers.”

“As long as pet ownership remains strong and those owners continue to treat pets as family, all retail channels have the opportunity to join in this category.”
—Perry Reynolds, vice president, marketing and trade development for the International Housewares Association
Pet Retail Remains Relevant

Regardless of the competition in the pet product marketplace, pet specialty retailers will remain a necessary segment of the industry, Vetere said.

“No matter how extensive the offerings are at these non-traditional outlets, there will still be a significant part of the pet-owning experience that can only be addressed in an outlet more primarily dedicated to pets,” he said, adding that everyday items, like traditional food and treats, could be more of a challenge, at least in the short-term.

“Once—if—gas prices start to come down,” he added, “it will be interesting to see if some people have permanently changed their pet spending habits, or if they move back to the more traditional outlets.”
 

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Reader Comments
Lucky for independents is the ability outsell theses guys with higher quality new to market products. In target or ace and your not in the specialty stores anymore.
Bob, Atlanta, GA
Posted: 11/9/2011 6:06:26 PM
Retail from my experiences has always been about lifestyle marketing. I had been in the hardware industry prior to the pet industry & we carried most pet supplies except dog & cat food. This was the early 80's & it made sense from the lifestyle marketing standpoint. Today it seems like it is the key to survival for those types of retailers. face it if you only need 8ft for those garbage cans why not use the other 4ft for pet supplies. This is what we have become in america. is it market over saturation? only time will tell. They used to say it brought more recognition to pet supplies.
Doug, New City, NY
Posted: 11/9/2011 4:22:40 PM
Thanks for the nice article!
Becky, Minneapolis, MN
Posted: 11/9/2011 1:51:15 PM
Pet specialty will need to be more careful/selective with our purchasing. Pressure vendors to choose one side or the other, and demand price control.
George, Reno, NV
Posted: 11/9/2011 1:21:52 PM
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