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If You’re Not Winning in Pet, You’re Losing
Pet care category ranks number one in total store sales, and holds major opportunity for retailers.
Nestlé Purina PetCare
October 11, 2016
5 Min Read
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It's more than just puppy love. American consumers spent a record $60.28 billion dollars on their four-legged friends last year, and sales are projected to climb to nearly $63 billion in 2016.
Experts credit growth to the deep love, bond and responsibility owners have for their pets. In fact, more than 80 percent of owners view their dog or cat as a very important family member.[i] And as millennials delay marriage and children, pets are taking their place as the most pampered member of the family now more than ever before.
So what does it mean for retail? The pet care category (including food, litter and supplies) is actually ranked number one in total sales out of 265 categories sold in US supermarkets, drugstores, mass market retailers, military, commissaries and select club and dollar retail chains.[ii] In fact, seventy-three percent of US households buy in the pet category, and when you consider that the lifetime value of a pet owners’ pet purchases has increased to over $14,000 (up 27% since 2008) – it makes sense why pet is the big dog in center store, growing over $2.5 billion each year since 1994.[iii]
Thus the pet shopper should be considered amongst the most valued consumers in the grocery and mass channel, as these shoppers spend a whopping 31 percent more per trip, versus non-pet shoppers.[iv] What’s more, dry dog food is the number two trip driver to supermarkets, ranked in front of milk and second only to pharmacy.[v]
“In short, we believe that if you’re not winning in pet, you’re losing,” says Paul Cooke, Vice President and Director of Trade & Industry Development at Nestle Purina PetCare Company. “We know that the loss of a grocery pet shopper leads to an overall twelve percent loss in grocery store trips.”[vi]
Furthermore, according to Nielsen, lost converted pet food and litter shoppers reduced their total grocery spend by 2.4 billion vs YAG, and almost one billion of that decline can be tied to lost pet trips.[vii]
“So prioritizing the pet category in-store and catering to these shoppers has never been more important to the health of total store sales,” says Cooke.
How do retailers capture share of the pet shopper’s wallet? While pet is very different from most center store categories, in that purchase is so often tied to emotion, there are several steps retailers can take to win in pet.
Right Place & Right Price: The first step to capturing this shopper’s attention is to ensure they know that you carry the products their pet needs, and at a fair price. Leading your pet aisle with a dedicated pet-themed end-cap helps attract attention and delivers a 28 percent increase in category dollars.[viii] To help shoppers more easily find their go-to pet products, consider shelving dog and cat in separate vertical sets and on separate sides of the aisle. Research also shows that grocery stores offering pet food in a manner that is quick and easy for their shoppers has the greatest impact on shopper loyalty. In fact, having the right assortment and good everyday value round out the top three loyalty drivers for grocery retailers in pet food.[ix]
Optimized Assortment: Just as there are a wide array of pet owners, you need to carry the right product mix to appeal to as many of them as possible. A pet parent’s nutritional philosophy is typically guided by their relationship with their pet, as well as their own nutritional preferences. For example, the pet humanization trend and real food movement have sparked growth in the natural pet food segment. So while offering natural pet food options is an opportunity, carrying a balanced variety of brands at varying price points to ensure you’re fulfilling each pet parent’s needs is critical.
“With the shrinking shelf space in center store and variety demands of shoppers today, it’s become increasingly important to optimize assortment in order to achieve maximum category growth and meet shopper expectations,” advises Felicia Mooty, Director of Category Leadership for Nestle Purina Pet Care.
Navigational & Inspirational Imagery: The final puzzle piece is bringing pet to life within the retail aisle. An overhead navigational sign will not only help guide shoppers, but will signify that pet is an important category to your store. Adding signage that defines subcategory sections (i.e. dry dog, wet cat, litter, supplies, etc.) will further help guide shoppers, and point-of-sale and informational signage within the subcategory sections can help influence purchase behavior and provide important cues to shoppers. Keeping in mind how this is a highly emotional category, beautiful imagery that captures the bond dog and cat owners feel with their pets is important to establishing shared values with pet parents and providing an environment in which they feel inspired to shop.
As we see no signs of pet spending slowing down, retailers have the opportunity to put renewed focus on their pet department. While establishing the right product mix, retail display and value equation is certainly key, equally important is connecting with the pet shopper on an emotional level. Appealing to pet parent could hold the key to increasing total store sales, and as data shows, if you’re not winning in pet, you’re losing.
[i] Purina Pet Attitude Study, Q3 2016
[ii] IRI Public Information
[iii] American Pet Products Association Industry Trends CMI Analysis
[iv] Nelsen / CMI Analysis – State of Pet Shopping Facts
[v] Nielsen Category Fundamentals Study 2015
[vi] Nielsen Analysis – Homescan Panel, Grocery/Dollar/Sam’s/Walmart Banner Annual 2014 vs. 2015
[vii] Nielsen Custom Channel Facts, 52 wks ending 8/6/16 vs. 52 wks ending 8/5/15 and Nielsen Custom Buyer Flow, 52 wks ending 8/6/16 vs. 52 wks ending 8/8/15
[viii] Nielsen Grocery Pet Audit 2012
[ix] Nestle Purina rQFD Pet US 2015 Survey
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