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Beating the Competition

Jason Kamery//February 10, 2014//

Beating the Competition

Jason Kamery //February 10, 2014//

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There are several challenges of owning a business that independent pet retailers face.

It could be dealing with the expanding of their business and building a customer base, finding, training and retaining good employees, increasing sales volume or maintain profitability.

In recent years with the 2008 economic crises, the economy has always been one of the biggest concerns to retailers according to the previous years of the Pet Age Retailer Report. As the economy continues to improve, the biggest challenge retailers now face is competing with independent, big box, mass market and/or online stores. According to the 2013-14 survey, 61 percent of retailers say competing with independent, big box, mass market and/or online stores is their biggest challenge in the coming years.

Pet Age spoke to several retailers all over the country to ask them to talk about how they compete with the competition.

David Hale of SomethingFishy Inc.

Q: Tell us about you and your store.
My name is David Hale and I Own SomethingFishy inc. in Cleveland, Ohio for more than 22 years now. I have been in the pet industry since I was 15 years old. I have been raising fish for over 36 years. I have been to the Great Barrier Reef and collected in the Amazon. I started doing the maintenance service prior to opening my first full line pet store but focused on aquatics. It was trial and error but learned a lot on the first go around on my own. Fast forward a few years and I went back full time in the business and purchased my own building. This is a specialty store and is all Aquatics and is Fresh water only but have did salt water I the past. We are known for quality cichlids which many are bred within our own hatchery in over 300 tanks. The show room has many display tanks of many types of fish and a planted tank. We also have a fish tank in the wall and in the floor when you walk in.

Q: Explain the type of competition your store faces.
Everything and everyone is competition these days. The big box stores I do not look at as competition that much and if anything they help my business by referrals because aquatics is not their strong area as it is for us. The obvious is the internet which is our best friend and our worse enemy. The well known, starting with the letter “A”, is a problem not just for us but any business these days. Then we have many vendors, wholesalers, etc., selling online or direct to the consumer which puts more of a squeeze on making a profit. Then there are basement sellers selling everything under the sun while they have full-time job so they do not need to mark up what they sell so they sell cheap to make a buck here and there while they hurt the bricks and motor stores. You can blame the wholesalers selling to these people. You also have local clubs/auctions that can hurt the business. Then you have eBay, Craigslist and now Facebook which is like Craigslist on steroids. There’s a Facebook page for everything for everyone selling everything or giving items away for free! It’s scary.

Q: What are some of the challenges you have had to face with the competition?
To sell or not to sell a product? Buy more for less to make less? Being used for my knowledge and lose sales to customers because of the prices that I cannot match on the internet or the guy selling out of his basement of his home.

Q: How have you overcome those challenges?
Always promote knowledge and customer service. We know what we are doing.
It’s a constant battle and I am always paying attention what’s going on. I am constantly thinking ahead and planning my next move what to do and not to do. Keep on the distributors on what they are not paying attention to like the basement sellers that are not legitimate businesses. They do not always know unless someone tells them.
I freshen up display tanks with new decor or livestock to give our customers ideas what they can do with their tanks. Buy more that sells more and get rid of product that does not sell or sold too cheap on the internet. Email blast customers on what’s new or what’s on sale or info about a certain fish or product.
Have healthy stock and clean tanks, Always!

Q: What advice would you give another retailer who may be facing challenges like yours?
Sometimes you have to reinvent the wheel but at the same time leave some things alone because the customers like the way things are. You have to pay attention what’s going on in the industry and watch the internet for what is happening now, tomorrow and so forth. Need to know what’s hot and what’s not for your location and customer base. It’s good to be known for a niche as in knowledge about a specific type of livestock so you become the go to shop for having them in stock and know what you are talking about. Stream line product selection on what sells and what does not. Price point certain products for repeat visits by your customers. I feel the lost leader sales are not worth it because many customers will hold out to buy something you will not make money on and then they do not buy anything else.
Host a meet and greet from your Facebook page with free donuts and coffee before opening or pizza party after hours. Buy from a local non-chain business or maybe have them sponsor the event. Promote local so it stays local as much as possible.  Think outside the box at times to get ahead.

Biff Picone of Natural Pawz

Q: Tell us about you and your store.
Natural Pawz was opened in 2005 by Biff Picone & Nadine Joli-Coeur a husband and wife team.  We opened it because of our passion in providing healthy and safe products for dogs and cats.  We both left successful careers in high tech to make a difference in our local community.  We believe in being involved and contributing to the local rescue, shelter community.  We have grown to 12 locations and plan additional growth because we make a difference in pet’s lives and our customers are our best supporters.

Q: Explain the type of competition your store faces.
It seems everyone is jumping on the band wagon trying to get more of the pet space.  It is no secret the big box stores are getting into the business as well as grocery.  This has put pressure on the bigger pet chains of the world to look to find ways to differentiate themselves but they are still caught up in the big box store mentality.  We differentiate ourselves by insuring we carry products our customers can relate to.  Our competitors are not loyal to manufacturers and will sell what they can make the most money on regardless if it’s in the best interest of the pet.

Q: What are some of the challenges you have had to face with the competition?
More from other smaller independents who try to undercut the pricing, which I believe undercuts the value of the products.  Some retailers rely solely on price and that is not a long term or winning strategy.  We do not use our size to undercut or overprice.  We follow our manufacturer guidelines, smaller retailers appreciate larger independents who do not practice predatory policies and do nothing to increase sales but steal from one another.  Independents need to work together.  The more healthy independents in a market the better for all and more importantly the pets who benefits from the products we offer pet parents.

Q: How have you overcome those challenges?
Making sure we get our message on, who we are and what we stand for.  We are very selective on hiring retail salespeople.  Many times the perception of your store is set by the way a customer is serviced by the store employees.  Making sure you are slow to hire and quick to fire are the rules we live by to ensure we always have the best qualified people in our stores at all times.  We also work with manufacturers to offer our customers the best products and ensure we always have them in stock.  Nothing hurts a small business more as when a customer comes in and you are out of stock.

Q: What advice would you give another retailer who may be facing challenges like yours?
Develop your vision and purpose.  Stay true to those principals and do not be swayed.  If you deviate you just become a smaller version of your competitors and they will “eat you alive”.

Nancy Okun of Cats n Dogs

Q: Tell us about you and your store:
Cats n Dogs, Playful Stuff For Humans & The Animals Who Train Them, started in 2006 as a home toy party business selling unique toys for cats and dogs. Within one year, we opened a 300 square foot shop adding quality treats. Three years later the business moved into a 900 square foot location and included premium food. 2011 brought a move into a 1,835 square foot location greatly expanding food brands, treats, natural remedies, pet lover’s gifts, bedding, strollers, carriers and a large selection of collars, leashes and harnesses.
South West Florida is extremely seasonal with a large influx of “snowbirds” from November through April. More than 65 percent of the permanent 160,000 residents in our immediate area are over the age of 62, many on fixed incomes and in recent years hard hit by the recession.

Q: Explain the type of competition your store faces:
As we expanded; other local independent pet supply stores closed their doors due to the economy. The big box stores added premium lines of food and treats. Every time one of the brands Cats n Dogs offered sold out to a big box; we filled that void with a new brand.

Q: What are some of the challenges you have had to face with the competition?
One of the biggest challenges was, and has been, introducing new brands to customers. We decided early on not to carry brands big boxes sold. However, we special order food for customers those brands we discontinue and match pricing. Samples of newer brands are placed on countertops so customers who bring their dog into the store can taste test on the spot. Others go home with sample bags even if we have to make samples ourselves by opening bags. Cans of food are often given for free. We remain cost conscious at all times. Items priced too high will sit on shelves. For example, 90 percent of treats sold are priced at $10, and under.
When a pet has an issue with itchy ears, hot spots or thunderstorms we offer samples of at least two different natural products to test before buying. Our strength is knowledge of the products, how and why those specific ingredients will work.

Q: How have you overcome those challenges:
Our store guarantees every bag of food and treats. If the kitty or pup decides they don’t want to eat that kibble, pet parents are encouraged to bring the bag back and exchange for another. We won’t sell any consumable after the expiration date, checking dates on packaging monthly. This helps to set us apart from the big box stores. The store doesn’t sell pee pads, litter boxes or dog houses. Much to their surprise, we advise customers where they can find those items at the best price and we even write down directions how to get to other stores.
Because we don’t have the advertising budgets big box stores do, Cats n Dogs works hard to keep our name in front of the public. We’re active in fund raising for numerous local rescue organizations, have established relationships with local publications, other pet related businesses and vets. Open seven days a week with two full-time owners and one part-time employee, keeps us personally involved with customers and their pets.

Q: What advice would you give another retailer who may be facing challenges like yours?
I believe you need to have a love of animals and people to enjoy this business. Become an information source and customers will tell others. That’s how to complete with the big boxes.

Mike Grayson of Art in Motion Pets

Q: Tell us about you and your store.
Our store is 6,000 square feet. We started our business 23 years ago solely as a leasing business.
Our home was zoned commercial and we began carrying pet supplies, actually setting up a *store* in our home.
We had 700 sqaure feet of *store* in our home when we moved into our first store front approximately one year after we began our leasing business. The first store was 1,200 square feet in a building that was a former car wash across the road from Wal-Mart.
After one year, we outgrew that space and moved eight blocks up the road to a 2,800 square foot building. After one year we began looking at options to expand and had our existing 6,000 square foot building built.
We were rolling the dice on the size of the building. In hindsight, we wish we would have built larger.

Q: Explain the type of competition your store faces.
The farm stores, Big R and Tractor Supply are within one mile (on the same road as us).
The internet is quite frustrating. We are happy that sales tax is now being applied to online purchases as of Jan 1st.
Wal-Mart is a thorn in the side of every small business, isn’t it?
Of course, PetSmart, is always lurking in the shadows.

Q: What are some of the challenges you have had to face with the competition?
Competing with pricing, advertising and size.

Q: How have you overcome those challenges?
Educating our customer base on the importance of shopping at locally-owned small businesses. When people understand it, they feel guilty shopping elsewhere for their pet supplies.
I try to buy smart. I scour sale flyers and watch for email deals from our distributors.
We have a loyalty program in place to entice our customers to shop with us.
We have fun at our store. Givers get. Offer something as simple as a raffle for a gift card. Customers remember that kindness.
Q: What advice would you give another retailer who may be facing challenges like yours?
Play hard. Be competitive – watch your prices. Match prices if asked, match store hours. Shout the shop small message from the rooftop.
Make your store fun with activities and events (in store and on social media).
Be kind to customers. Go out of your way to speak to them, talk to their children, and learn their pets’ names.
Most importantly, clean your store. paint. simply changing the light bulbs really brightens up your inventory.
When we travel, we stop in pet stores all over the country and 9 times out of 10 they are smelly, unorganized and a dusty mess.
We are all working our fingers to the bone, dealing with taxes, insurance, shoplifters, and employee issues (should I keep going). There is no excuse to have a dirty store.
Go through this Pet Age magazine and grab the name of every store mentioned. Follow them on Facebook. We can get ideas and inspiration from each other. We are all in this together!

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