Amazon today offers more than 200 million products online in the United States. Many other major retailers are striving to emulate Amazon by offering expanded listing beyond what they stock in their brick and mortar facilities. Major pet retailers are also beginning to offer dropship products from their established vendors, expanding their online product capabilities.
It is inevitable that this trend will continue since it makes perfect sense to maximize sales potential, especially based on the success major online retailers have experienced over the past few years. This trend should be a wake-up call to our industry and especially to independent retailers, who, I believe, are still a significant portion of pet-related sales. Never forget that our industry is based upon companion animals, and there is still a future for independents no matter how dominant Amazon and the like become.
In today’s marketplace, retailers can’t survive on livestock sales alone. There needs to be a mix of animals and supplies to make a store truly profitable. The average retail store has to turn its livestock inventory at least 12 times a year or the cost of maintenance and loss will eat up all of their profit. Adding dry goods ensures that there are products that will attract customers into the store while allowing the retailer to invest in less perishable inventory.
The independent pet retailer must formulate a survival strategy that will allow them to compete with the mega online retailers. They must build on their individual strengths and not just on price and availability alone because there is no way to beat an Amazon at the price game.
Independent retailers have several important factors going for them. The major advantage is livestock offerings, but even a store that only offers dry goods has a “showroom” that allows the retailer to display the product, explain how the product works and answer customer questions in real time.
You may say to yourself, “So what, the consumer can come in, look around, be educated and go online and buy what I have to offer!” That’s perfectly true, but what needs to be added to the formula is “recommendation” and “problem solving,” both of which are hard to come by online.
There are many review-based internet sites online but have you noticed that when you pursue them you generally don’t get the specific information you’re looking for? In many cases the review is just someone beefing about the fact that the product came in broken or that it took too long to receive.
If you build a reputation with customers that showcases your and your staff’s knowledge of the products you sell, you will create a following who will tell their friends. Many of the more successful stores I’ve called on do exactly that. Their customers look to them to solve problems and to recommend products that will make their pet’s life happier. Whether it’s about a dog, cat, bird, fish or reptile, people will have questions and will be grateful to you for honest answers and solutions.
It is a fact that Amazon and other online retailers will continue to apply downward pressure on retail pricing; there is no getting around that. It is your responsibility to seek the best prices you can from your suppliers. In many cases, distributors have a customer loyalty discount available and manufacturers run national promotions that distributors support. There are more and more manufactures offering MAP pricing. Although MAP is not a perfect solution, you should encourage them by supporting those vendors who have a MAP policy giving them your business and being vocal about it.
Whether you’re an aquatic store selling high-end lighting or a full line store selling crate training systems, confidently offering your expertise can ultimately make the difference between sales decline and sale growth. If you aren’t increasing your arsenal of offerings that are unique to your business rather than relying on just discounting, then ask yourself what the future holds for your business.