July 1, 2014

A growing number of pet retailers have responded to the economic stagnation of recent years by adding pet-related services in an attempt to expand sources of revenues.

According to an industry report issued by the business research firm IBISWorld, 22 percent of pet retailers added specialized services to their product offerings as recently as 2010, and it is believed that in subsequent years the trend has at least persisted, if not accelerated.

The investment would appear to be a promising one, as the American Pet Products Association reports that spending on pet-related services grew 40.6 percent between 2008 and 2013.

The most common service retailers are adding appears to be boarding and grooming, a natural extension of a pet retailer’s resources, staff knowledge and facilities, but still one requiring a good deal of space and additional staffing.

Dog boarding, whether overnight or in a day care setting, involves a lot more than just a space to confine the dog. The leading boarding facilities offer play areas, grooming, activities… one emerging trend even involves storytelling. A pet retailer who wants to expand into boarding needs to do more than just set up a makeshift kennel. In order to compete for business with the top facilities, it needs to explore best practices and find out what dog owners are really looking for in a boarding facility.

Grooming is a service many retailers already offer. Those who are thinking of adding it should recognize that, while easy access to targeted customers absolutely offers a strong business opportunity, it’s not a slam dunk to make a profit. A wise approach is to research the cost of supplies and materials, as well as prevailing trends in pricing, to ensure that a grooming service can actually earn a profit.

Granted, grooming offers the potential for upselling because grooming customers, once in the door, might spend on other items they would otherwise never have purchased. But, conceiving a service as a “loss leader” is usually not a good strategy. If you’re going to offer grooming, crunch the numbers and be sure the grooming itself can make you money.

Doggie Massage

Hey, you like them? Why wouldn’t your dog? Dogs can’t necessarily tell you where it hurts or where they’d like a little extra attention, but the well-trained doggie masseuse can still be a best friend to your customers’ best friends.

Massage services involve relatively little cost, requiring little more than a properly equipped table and a service provider who has the right combination of skill and patience. And while many states do not require licensing or certification for those giving pet massages, a retailer might consider requiring them anyway, if nothing else to help separate the truly qualified candidates from those who merely claim to have the proper credentials.

A good approach to quality control in hiring here would be to find established doggie massage services and ask if any talented interns have come through their organization. Then again, such an organization might be interested in contracting to perform the service itself, which might be a simpler way for the store to go.

Pet Photography

Many pet owners consider their pets members of the family, and that means the pets belong in family portraits just as much as other family members. That doesn’t always go over too well, though, at traditional portrait studios.

With relatively limited space requirements, a pet retailer can augment its revenue by giving families with pets the opportunity to pose for portraits involving every member of the family, regardless of whether they walk on two legs or four, or have gills or feathers.

Here there are two primary approaches retailers can take, both of which carry pluses and minuses.

On the one hand, a pet retailer could hire its own staff photographer, which presents an upfront addition to overhead but also offers the potential for significant revenue in that an effective marketing program could yield significant sales. Since just about everyone who comes into the store is a pet owner, the use of in-store marketing and social media would be targeted in a high-value manner, and would have a good chance of generating positive results.

But aside from overhead, another negative of this approach is that it puts the onus on store employees to market the service.

Another approach would be to simply lease space to a photographer and let the photographer deal with the management and marketing of the service. The benefit here is that the store only has to provide the space, and the revenue stream is consistent and predictable, without any other overhead being required.

A potential drawback, though, is that an outside party operating on your premises might not operate entirely according to your procedures, and if you’re not involved in the marketing of the service, you have no control over its success.

A lessee who takes good pictures but doesn’t know how to market the service, and they are, of course, two totally different skill sets, might decide after a month or two that the business isn’t yielding enough return to justify the cost of the lease. Even so, such a separation would still be much easier for the store to handle than discontinuing a service the store itself was administering.

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