Sector Spotlight: Pet Retail

It's reigning cats and dogs, and specialty retailers are taking a bite out of the pet supply market with personalized services and exotic products.
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Posted June 29, 2010

An upscale pet store in Denver sells a dog food gravy that comes in a wine bottle and is called Sauvignon Bark. Its comparable cat food gravy is called Meowlot.

Dog kennels around the country have private rooms with TVs and soothing music. Pet-supply retailers have added such services as professional photography, pet birthday parties, pet-sitting and photo-opp visits from Santa during the holidays.

Collars are studded with rhinestones (and sometimes with diamonds), pet clothing is branded and carry bags are made of genuine leather.

Local pet supply stores have become boutiques with names like Three Dog Bakery, Tails R Us, Bark-n-Bitches, Living Ruff, Pawparazzi and Barker & Meowski: A Paw Firm.

In an economy where expensive fashion items for humans are going unsold on shelves, pet owners seem to be pulling out the stops. Leashes, toys, harnesses and the rest have become high-end, trendy status items.

What’s happening to pet supply retailing is a reflection of the culture in general. As our population ages, empty-nest baby boomers are refilling their nests with dogs and cats, generally in multiple numbers, and indulging those pets in ways they used to indulge their children.

“It’s one of the fastest growing retail categories,” says retail designer and consultant Ken Nisch, chairman of JGA Inc. (Southfield, Mich.). “Every upscale mall has a specialty pet store. And it’s almost recession-proof. The last place people stop spending is on their children and pets.”

Local and regional pet supply retailers have been kicking up most of the dust. Nisch says the big national chains, like Petco and PetSmart, have tended to build their big boxes with a one-size-fits-all mentality. The mass merchants, like Walmart and Meijer – and even Lowe’s – have added pet sections. And all the supermarket chains have extended their aisles full of foods, treats, leashes and toys. “Those big box stores contain primarily open-sell gondolas with lots of assortment and value pricing but little editing and minimal information,” Nisch says. “Today’s pet owners are looking for more. They’re looking for guidance, information, nutrition advice and reassurance.”

That’s because pet owners today are faced with more choices than ever, says Jay Highland, director of brand communications at Chute Gerdeman Retail (Columbus, Ohio). “They want to know: Is the food organic? Are the grooming products safe? Will the pillow choke my pet? Is the bedding asbestos-free? Will the airplane carry-on case be comfortable? What specifically do I need to know about this mixed breed of dog I just adopted?”

Highland says pet retailers are trying to use store design to address those needs and questions. “The smart ones are using the core of the store layout as a place of information and animal advocacy,” he says, “whether that be a personal service desk in the front or a revolving display full of pamphlets and booklets or a computer terminal where people can get the answer to ‘How do I clip my cat’s nails?’ ”

Personalization is especially important, says JGA’s Nisch. “The smaller guys need to have that intimate, reassuring touch. They know the owners’ names and the dogs’ names. They sponsor local pet walks. They send birthday cards. Pet owners, who are a traditionally loyal bunch, begin to think of them as ‘their store.’”

Highland says pet retailers should think of their stores as a journey with purposefully placed merchandise areas that create interest and excitement. “The front of the store could have a grooming area or salon, a training area or a place to conduct classes on adoption,” he says, “to emphasize the retailer’s commitment to knowledge. Placing fashion items, such as collars, beds, clothing, toys and accessories, near the front door with a boutique presentation emphasizes fashion and tells new merchandise stories to returning customers.”

Highland recommends the aisles of merchandise be broken up into shorter runs, with lots of signage and shelf-talkers to cut through the confusion of so many choices. “Don’t depend on the shopper reading the labels or the brands’ point-of-sale materials to get product information,” he suggests. “The retailer should be the voice of expertise, telling shoppers what they need to know.”

And the 80-pound bags of dog food should be in the back of the store, just like milk in a supermarket. “That’s the commodity people will always come in for,” Highland says. “The front of the store is for things they didn’t think they needed when they came in.”

The greening of America has also spilled over into pet supplies. People now want to know which brand of food is the most nutritious, which chewable is organic and which toys are safe – no buttons or other loose ends to swallow, no toxic paints to make Mister Beau or Miss Mittens sick.

“Pet owners are an increasingly eco-minded demographic,” says Sat Garg, principal at AkarStudios (Santa Monica, Calif.), which recently completed a modern, green project for the California-based pet supplies retailer Healthy Spot, full of sustainable materials and energy-efficient lighting. The center of the store is a staging area for animal experts to lecture and for seminars on healthy pet practices.

If the smaller retailers are seizing the opportunity to be inventive, the national chains are not standing still. Petco is experimenting with an urban, small-box concept called Unleashed by Petco. Competitor PetSmart has added grooming, veterinary services and an upscale pet hotel to some of its locations. And they’re both taking advantage of their presence on the Internet by placing online stations strategically in the store that link the shopper to databases and libraries of information – and, of course, more merchandise for purchase.

“While these incremental approaches to innovation are taking place, the sector has never had a game-changer,” says JGA’s Nisch, “like Whole Foods, Apple, Target or Crate & Barrel. Maybe the current market conditions, and the competition from the local retailers, will push the national chains to become more creative and redefine the category.”

 

SIDEBAR: Air Pet Retailing

From the malls and strip centers to the neighborhood streets and downtown shopping areas, pet owners have more places than ever to indulge their dogs and cats. Now that’s spreading to the airport.

“Much as with their children, pet owners returning from trips want to reward their dogs and cats with gifts,” says Shane Martin, associate at Rowland+Broughton, a Denver-based architecture and urban design firm that completed a Jet Pets store in the United Airlines concourse of Denver International Airport (DIA).

“Travelers spend a lot of time captive in airports,” Martin says. “They arrive early for flights and, once through security, they’re trapped inside. Or they’re on connections, between flights. So people read, eat, drink – and shop.”

The retail inside DIA has been designed like a high-end mall and Jet Pets appeals to wealthy shoppers’ vanity, says Martin, with a lot of personalized baubles and bling, from breed-specific refrigerator magnets and stuffed animals to rhinestone collars, expensive custom tags, boutique travel bags and high-design dishes and bowls.

“It’s an emerging demographic that is influenced by reality TV,” he notes. “They see Paris Hilton doting on her dog, and they want to dote on theirs.” —SK