Online retailing is changing the game for pet parents.
Specifically, 40% of pet owners are opting to buy pet products online, up from 37% the previous year, and notably higher than results from 2014, according to U.S. Pet Market Outlook, 2017-2018. The report, from research firm Packaged Facts, highlights mergers and acquisitions, retail channel trends, and pet owner demographics and spending habits.
According to Packaged Facts, a large percentage of pet product sales growth is online. Not only are higher numbers of consumers buying pet goods online, but they are spending more of their pet product dollars online. Further, an ever-increasing number of consumers agreed that they purchase pet products online more than they used to.
“E-commerce has accelerated its shift from being a Wild West boomtown toward becoming the market's retail California," said David Sprinkle, research director, Packaged Facts.
One factor spurring this growth is an increase in merger and acquisition (M&A) activity since 2016. This includes Mars' purchase of VCA Inc. and other veterinary practice consolidation; PetSmart's acquisition of Chewy.com, and Walmart's acquisition of jet.com. Each deal has contributed to the structural remix of the pet market, the report revealed.
“Brick-and-mortar retailers and manufacturers are scrambling to regroup to avoid losing ground. Retailers are adapting to compete with the Internet's—specifically Amazon's—ballooning strength in pet product sales,” Sprinkle said. “Brand manufacturers are adapting because their entrenched lock on shelf space is increasingly irrelevant for shelf-stable online purchasable products such as dry and canned pet food or cat litter.”
To compete, traditional retailers need to step up their game beyond beefing up their own online presence. For example, specialty pet superstores, such as PetSmart and Petco, are capitalizing on their established relationships with customers who know what to expect from the in-store experience and from the services offered there.
A critical differentiator for pet specialty stores are non-medical pet services, such as grooming, boarding and training. Indeed, as premium products have become increasingly available online, services are what make pet specialty stores stand out, according to Packaged Facts.
Supermarkets are also fighting to retain their share of the pet market against pet superstores, discount-driven Walmart, and of course, online retailers. Supermarkets are increasing the size and scope of their pet care departments, sponsoring pet contests, running promotions with animal rescue groups and even filling pet prescriptions at stores with pharmacies in an effort to lure pet owners into the store, the study said.