Americans spend more on their pets than ever before. By 2020, the U.S. pet industry is expected to reach $96 billion in sales, according to Packaged Facts, a market research firm. The 2017-2018 American Pet Products Association (APPA) National Pet Owners Survey notes that 68 percent of U.S. households own a pet, which equates to 84.6 million homes.
Dog and cat products and services drive the majority of sales for pet stores, but if you look deeper into the numbers, you’ll notice that 20 percent of sales are in the aquatic and reptile categories. Another interesting fact, according to the APPA survey, is the number of aquatic and reptile pets owned in the U.S. (represented in the millions): freshwater fish, 139.3; saltwater fish, 18.8 (excluding corals); and reptiles, 9.4.
So why key into the aquatic and reptile 20 percent when dog and cat categories account for as much as 60 percent of sales? The answer is that big box stores have concentrated their inventory investment in the dog and cat categories. If you walk into a Walmart or PetSmart today and you’re a saltwater aquarium hobbyist, you will find very few products on their shelves that you recognize in the way of popular brands. Petco performs somewhat better in brand recognition, but its space dedicated to saltwater is only about 10 feet, and with the exception of its magnet stores, high-end trending products are missing entirely.
What the big box stores don’t seem to realize is that hobbyists talk among themselves and are always looking for new and improved brands. So what ends up happening is that big box stores appeal mainly to beginners and end up eventually losing those customers to aquatic specialty stores, or full line stores with a good aquatic department, as they delve deeper into the hobby.
Unlike dogs and cats, aquatic and reptile animals need specialized care. As an example, a 29-gallon aquarium has to provide life support within the relatively small enclosed space provided, and if the environment isn’t just right, the fish won’t survive for long. The same can be said for captive reptiles in an enclosed terrarium environment. Therefore, consumers who own these types of pets will eventually be drawn to the pet specialty stores for information. And if handled properly, this gives the independent retailer an opportunity to retain the customer.
I do realize that the internet is a major factor these days. Walmart is in the process of developing its online presence into a mini-Amazon, and PetSmart and Petco’s acquisitions of major online entities have made the big box chains credible online competitors. Even with their online growth, they will still struggle to find viable ways to service livestock sales over the internet, giving brick and mortar pet specialty retailers another opportunity to capture sales.
The most important thing any retailer can do to compete with big box stores and the internet is to make the in-store buying experience as enjoyable and easy as possible. Worrying about every sale and obsessing over every penny of profit won’t build sales. In this 21st century economy, being willing to negotiate pricing is as important as having a decent inventory selection.
If you are spending the time to keep abreast of pricing trends and reflecting that in your store pricing and if you’re willing to do a little negotiating when it will close the sale, then you can compete against pretty much anyone. Aquatic and reptile product pricing isn’t as sensitive as the price of dog food, which has a full range of quality levels and price ranges that can be bought through mass, regional chains as well as from independent pet retailers.
Consider what your in-store experience is worth to your customers. Be upfront with them on your pricing, work with a basic formula and be able to justify why your pricing may be higher than someone else’s. And most importantly, if you do lose a sale, be gracious about it; dropkicking the customer out of your store won’t encourage sales growth and will probably earn you a negative online consumer rating.