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Why Pets Matter to People... And Business

May 4, 2015

There's a growing opportunity for retailers to continue to sustain and grow their pet aisles. Have you walked into your local grocery store lately and watched how the number of pet products for sale is increasing? 

There's a strong reason for that. Pets matter to people. More and more.

Therefore it needs to matter for suppliers to stay relevant and anticipate growth by partnering with retailers and tell the story about consumer trends.

How much do they matter? According to the American Pet Products Association (APPA) 395 million pets continue to live in 83 million American households. These include 56 million households with dogs, 45 million with cats and nearly 38 million with other pets such as fish (16.1 million households), birds (6.9 million households) and reptiles (5.6 million households). Dogs and cats in particular have kept their special place in American culture.

The majority of dog and cat owners consider their pets to be members of the family, and most owners think of their dogs or cats as being vital to their mental and physical health. Reuters.com reports that 97% of doctors overwhelmingly believe there are health benefits to owning pets.

According to DogVacay; 85% of people would rather spend a Friday night in with their pets than out at a party; over 75% of people would rather snuggle with their pets than their significant other; and approximately 83% get their pets gifts for the holiday. 

So what... right?

Here's a great quote from a pet-lover that sums it all up... "Without my pets, my wallet would be full, my house would be clean, but my heart would be empty."

Manufacturers know (or should know) that to compete in the pet space and capture the consumer, you need to be laser-focused on: size of the pet category; new product trends; changing pet owner needs; and know cross-channel trends of where consumers are buying certain products.

A critical insight about pet products being sold in brick & mortar, is the importance of supporting pet food, which is a low-margin, high-turn business, with pet accessories, which deliver high margins but low turns. They go hand-in-hand.

While most trips into the pet aisle start with a planned pet food purchase, pet owners will often be thinking about a possible non-food purchase as well, whether a rawhide chew for their dog or a grooming product for their cat. Well-planned cross merchandising that triggers such impulses can boost not only the total ring for that shopper, but give a healthy boost to the gross margin of the basket.

In fact, Nielsen data demonstrates that a basket with a nonfood pet item will gain an average margin lift of 37%!

For example, the GMDC/Nielsen GM Hierarchy shows that the average retail for cat food in the grocery channel is $1.44, whereas the average ring for a cat accessory is $4.73, while a cat HBC product averages $7.26. For dogs:  food averages $3.80, accessories $4.72. Health and wellness products average $5.43, while flea & tick products average $8.99. These numbers identify a case for effective marketing and merchandising support, alongside food products, to ensure the shopper adds complementary products to their basket -- making a significant incremental lift of high-gross margin for the retailer.

For out more about the GMDC/Nielsen GM Hierarchy here

Here's the good news. Global Market Development Center (GMDC) will be launching a formidable Pet Research Study that answers and addresses all your questions before the end of May 2015. And, most importantly, outline progressive action plans that closes the gap between retailer and supplier collaboration in order to innovate merchandising.

The countdown is on. The study will explore how brick-and-mortar retailers can effectively respond with savvy marketing to a growing challenge of Internet retailers, particularly with disruptors such as Amazon Dash threatening to further reduce shopping trips and mission.