May 2, 2017

Retailers have offered customer loyalty programs for decades. Remember the punch card? “Get your card punched each time you purchase from the store, and once you have 10 punches, you get $10 off your next purchase of $25 or more.” This was the extent of a consumer reward program—until recently.

If you look at retail internet sites, you may notice that some offer a similar concept, usually called Reward Points. If the consumer signs up as a member of that site’s community, he or she can earn points toward future purchases. Usually, points can be earned by writing a product review or replying to the site’s blog and when purchasing products from the site.

Over the past two years, I’ve noticed the growth of customer loyalty programs offered by internet sellers. I think there are two reasons why they have embraced the customer reward concept. The foremost reason is the ever-increasing number of internet sites. But another reason that’s just as important is that award points offered for site activity and purchases neatly get around most manufacturers’ Minimum Advertised Price (MAP) programs. Since they are not “advertising” a price, but offering a generalized awards program, they aren’t in violation of a MAP program.

MAP has always been a bit of a gray area. Some states disallow the practice, and others have specific regulations that create reporting and oversight requirements. So, with this new twist, what can brick and mortar retailers do to compete?

The pet industry will become irrelevant without pets. Yes, I know there is an ever-growing number of stores that don’t sell livestock, and that may work for some—so long as there are still the traditional retailers who do.

Brick-and-mortar retailers have some advantages over internet sellers. To begin, to get these reward points, customers have to sign up and become a member. Not all consumers want to do that. Of course, those who sell livestock have the obvious advantage of offering a real-time bonding experience. This is an advantage that is difficult for any internet or big box store to emulate.

Multiple industry articles quote total pet food and supplies sold on the internet to still be in the single-digit range with a wide variation from $4.1 to $9 billion (Petfood Industry) out of an overall $69.36 billion (American Pet Products Association) by the end of 2017. No matter what the pundits say, those numbers leave a lot of room for brick and mortar stores.

What can you do to compete with big box stores and internet sellers? Try out new ideas; don’t just turn on the lights in the morning. Think about what those other segments of the pet industry are doing and come up with a way to compete with them that fits your business model. You may not have exposure to the whole U.S., but within your city, county and state, you could bring in more business than in the past if you reach out for it.

If you don’t have one, create a loyalty program, and promote your services and connect with your customer base through Facebook and Twitter. Open your own Shopify e-commerce shopping cart and sell unique products that are hard to find or are specialty items relating to your specific business. Support consumer clubs and run regular instore promotions and key into “get out of your chair and come down to the store” items that you can buy in quantity at a discount from your suppliers and sell in quantity at a discount to your customers.

My advice is to not worry about the folks that come in, browse and then go home and buy on the internet. Try making them want to buy from you by making their time in your store an attractive and beneficial experience. If you do, I dare say they will be back sooner or later to buy food or specialty products from you because you are convenient and they haven’t forgotten that you were pleasant and helpful the last time they were in your store.

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