Only half of pet product spending will take place in a store come mid-decade, underscoring the notion of how the pet industry has transformed into an omnimarket, according to Packaged Facts, a market research firm based in Rockville, Md.
“The U.S. pet market is in the midst of a reset that has multi-front competition blurring the lines between the once distinct, but now increasingly merging, segments of pet product retailing, pet services and pet care,” officials said in a statement.
Officials characterize the pet industry as “omnimarket” to emphasize that pet industry players aren’t simply competing across brick-and-mortar channels and the internet, the dynamic acknowledged by the term “omnichannel.”
“Instead, ‘omnimarket’ encapsulates a new era of multiple-front competition that—simultaneously and somewhat chaotically—crosses former borders between medical versus non-medical, products versus services, food versus non-food products and pet owner demographics,” officials said. “This new era of multiple-front competition is fueled by booming e-commerce in pet products, but as importantly is being shaped by the competitive reactions of traditional pet product manufacturers and retailers.”
David Sprinkle, research director for Packaged Facts, added that from the retailer point of view, omnichannel focuses narrowly on brick-and-mortar plus internet.
“Omnispending, from the consumer behavior point of view, similarly recognizes that consumers now routinely spend in-store and digitally—such that by mid-decade only half of pet product spending will take place in a store,” Sprinkle said. “As importantly, however, pet owner spending is broadening across a transformed set of products, services and high-tech product/service hybrids, while the top tier of competitors aggressively cross borders to compete for consumer mindshare and customer loyalty.”
This reset of the U.S. pet industry, according to officials, ever more sharply focused on customer convenience as well as pet health and well-being, is characterized by:
- A permanent remix of physical and digital shopping behaviors;
- A growing role for direct manufacturer-to-consumer selling and shipping, along with retailer-based autoship and same-day delivery;
- The continued diversification of the veterinary sector through clinic/store, pop-up and at-home vet and pet care service options, along with digital pet health monitoring and online pet pharmacies; and
- Expanded and reconceived pet acquisition, adoption, in-home set up and training/obedience services.
In related news, Packaged Facts officials have found that e-commerce’s eminence in the pet market is not tied to a pandemic sales boost. In a recent Packaged Facts survey, 40 percent of pet product shoppers claimed they shopped online more for pet products due to the impact of COVID-19. But as Sprinkle pointed out, the uptick in e-commerce shopping in the U.S. pet industry won’t be reversed even as restrictions are increasingly lifted and the vaccine becomes more widely available, because consumers have become acclimated to the ease and convenience of online ordering.
“The pre-coronavirus surge in internet sales of pet products had already spurred a massive pet market investment in e-commerce logistics over the past several years, which has helped shored up the products side of the industry and will continue to do so,” Sprinkle said.
Even before the pandemic, e-commerce sales were a primary pet market driver, with more than $5 billion worth of non-food pet supplies sold online in 2019, with e-commerce accounting for an estimated 21 percent of product sales, according to officials. As a result of the pandemic-driven accelerated consumer migration online, Packaged Facts officials said that they expect e-commerce to surge to 35 percent of the non-food pet supplies market by 2024.
Even durable items that had been resistant to shifting online in the past—whether due to the “touch factor” (as in the bed category) or because they have traditionally been impulse purchases (as in the toy category)—are seeing a growing share of internet sales, officials said.
“Accordingly, now is the time for retailers to up their game by exploring incentives for online ordering for home delivery, ‘click-and-collect’ (buy online, pick up in store/BOPIS—or, in the age of coronavirus, curbside), and subscription-based sales,” officials added.
Sprinkle will address some of these trends at the upcoming Global Pet Expo Digital Access, which is set for March 24-26 and presented by the American Pet Products Association (APPA) and the Pet Industry Distributors Association (PIDA). Details can be found here.
For more of PPN's coverage on pet business, read: