Supermarket customers are looking for luxury and comfort for their animal companions.
To capitalize on this trend, retailers need to evolve their pet aisles into an oasis of high-quality, mutually appealing nonfood items, retailers and other experts told SN.
With U.S. pet ownership at an all-time high, pampering the pet aisle with valuable information, upbeat decor, and the same care that is taken with people products is the way to keep animal lovers happy.
As Dan Spears, director of HBC and GM, Ingles Markets, Asheville, N.C., put it, "Appeal to the human because the dog doesn't get much say in the matter."
Even with just the right product mix, supermarkets are still faced with the challenge of getting the consumer down that aisle.
Through merchandising, retailers need to communicate to their customers: "You're coming here for milk and bread anyway, so take a look at our pet aisle and see what we've got for you there," said Bob Vetere, managing director of the American Pet Products Manufacturers Association, Greenwich, Conn. "Supermarkets must make sure that the pet aisle is an impressive-looking place, a fun place and a happy place to be."
An inviting pet aisle is important because stores are marketing to a consumer looking to dote on an object in their life that provides unconditional love, Vetere said. Having a great pet aisle will improve the overall image of the store as well, he said.
"Make it funny, make it happy, make it silly and you'll find that people are attracted to it," he said.
In a lively pet aisle, customers also want to see new items on at least a monthly basis, said Robert Keane, spokesman, Stop & Shop Supermarket Co., Quincy, Mass. "Customers want new and different kinds of dog and cat toys, fun and cute items."
Next year, Bashas' is going to incorporate an inviting pet department into the rest of the store by working on endcap tie-in opportunities with grocery, according to Cathy Kennedy, nonfood buyer, Bashas,' Chandler, Ariz. "We also have 2-foot by 5-foot power panels that we utilize on the pet aisle and do off-shelf displays in pet," Kennedy said.
American pet ownership is currently at an all-time high, with 63% of all households owning a pet, according to the 2005-2006 National Pet Owners Survey of the APPMA.
Additionally, pet product spending is at a projected $35.9 billion for 2005, positioning the pet industry at 60% larger than the $20 billion toy industry and 33% larger than the $24 billion candy industry, the survey said. About 25%, or $8.8 billion, of this consists of nonfood supplies and over-the-counter medications, it said.
This is a serious treat for supermarkets selling pet products.
"In the nonfood pet market, the buying trends have been good for Bashas'," Kennedy said. "Bashas' nonfood pet products category is up 15%, while the remaining pet market [food items] is up 7%," she said.
"Two words -- upscale and variety," said Keane, referring to current developments in nonfood pet supplies. "We're seeing much more demand for 'luxury' pet items this year -- fancier cat beds, fancier collars, and coats and sweaters that look like they were made by Ugg [a fashionable Australian footwear brand]."
Baby boomers filling empty nests with pets, and young couples postponing starting families and instead spoiling a family pet, are contributing to the industry's growth, according to APPMA.
"Humanization of pets is one of the strongest current trends," Vetere said.
APPMA's survey reveals that 80% of dog owners and 63% of cat owners purchase holiday gifts for their pets, at an average of $17 per gift.
What this means for merchandising is finding products that will attract the owner.
"As a consumer, you tend to think in human terms even though you're thinking, 'What would my pet like?"' Vetere said. For instance, while a golden retriever might prefer to have another old tennis ball, that's not what the owner thinks when he or she is in the store, he said.
Rather, consumers are apt to purchase fetching items like rhinestone collars and sweaters looking like they came from the doggie or kitty runway.
"Customers want ceramic dishes with prints that will match their kitchen's design," Keane said.
That said, the most important element to maintaining the pet aisle is to balance product selection and clientele.
"If you're in Ames, Iowa, you don't start carrying thousand-dollar sweaters and dog collars. In the same way, if you're in downtown Manhattan, you're not going to carry electric fences," Vetere said.
Knowing its customers is especially advantageous for supermarkets whose clientele isn't likely to be attracted to the store just for its pet aisle, Vetere said.
Supermarkets need to appeal to pet buyers from their intrinsic advantages of trust, frequency and convenience, Vetere said. "In the same way Wal-Mart has to appeal to consumers on a value level," Vetere said.
To illustrate loyalty to customers who are loyal to their pets, Stop & Shop provides health information in the pet aisle, "just like you'll find in the rest of our store," Keane said. Displays tell how much to feed a pet and detail the benefits of certain kinds of food, among other things.
Stop & Shop also carries a store-brand "Companion" label that offers nonfood items such as pet shampoo, cat beds, and dog and cat leashes, Keane said.
This past year, Bashas' began providing health information and tips for pet owners by dedicating a full page of its monthly "Fresh is Best" magazine to pets and pet owners, Kennedy said.
Bashas' also advertises in "Fresh is Best" with listings of price and item. "We also do a lot of temporary price reductions on pet items," Kennedy said.
On a regular basis, Stop & Shop advertises offers such as 20% off dog and cat toys, "or something similar," Keane said.
These types of merchandising and advertising are becoming increasingly important because pet spending does not appear to be slowing, according to APPMA. It sees 5% to 6% growth in the foreseeable future.
"Pet is a very high margin category and we have made some good changes in the past year in merchandising the nonfood pet items with grocery pet items, which has helped increase sales," Kennedy said. Next year, Bashas' plans to do cross-merchandised tie-ins with the grocery department to offer a free nonfood pet item with the purchase of a food item," she said.
Bigger Selections
Consumers' movement toward high-quality pet items is causing supermarkets to reorganize, making room for variety.
At Bashas', Chandler, Ariz., carrying the right items for each subcategory is part of the strategy. Most of the retailer's stores have gone to hybrid pet sets -- pet categories with a selection of two or more major brands -- to battle competition from large pet outlet stores like Petco, San Diego, and PetSmart, Phoenix, said Cathy Kennedy, nonfood buyer. "In the past, grocery accounts were either strictly a Hartz Mountain [Secaucus, N.J.] pet set or Sergeant's [Omaha, Neb.], based on contracts that stated that a certain percentage, usually 95%, of the set had to be made up of most of their items. Within the past three to five years, most accounts have changed that and have gone to a much more flexible contract with either of the two majors or no contract at all, so that they can have the top-selling [stockkeeping units] for each subcategory from other suppliers, like Pet Center and Kong," Kennedy said.
With a big variety of items, keeping the pet aisle well organized is important for catering to customers, said Dan Spears, director of HBC and GM, Ingles Markets, Asheville, N.C. "Keep the dog products together, the cat with cat, and mix bird and small animal, making it easy for customers to find what they want."
