Pet food companies that have been in business in the last 15 to 20 years are going to face challenges in the next five years. Their reaction to those challenges will determine whether or not they will be around to see 2020, said John Stanley, president of John Stanley Associates, speaking on "Pet food retailing in 2020" at Petfood Forum 2015

“Some are saying the world of business will change more in the next five years than it has in our lifetimes,” Stanley said. “You are at a crossroads, and you can’t stay there very long.”

Stanley, who consults worldwide with retailers in perishable goods, said the pet food industry is in the enviable position of seeing good growth, but the coming changes could negatively impact many retailers and suppliers.

“We are all trained to stay in our comfort zone,” he said. “If your business doesn’t get out of its comfort zone in the next five years, it may not survive. Millennials don’t trust marketing.” 

“If you keep your current marketing strategy, they are going to be switched off,” he said. Stanley said research shows the millennials – people currently aged 14 to 33—make 93 percent of their purchase decisions from endorsements – not from marketing. Of those endorsements, 66 percent come from friends. He said baby boomers are used to interruption marketing, are heavy users of a brand once hooked and believe in marketing promises. Meanwhile, millennials want engagement and interactive marketing, they look for personal gestures from the supplier and want to be active co-creators. “So we need to give consumers something to talk about,” said Stanley.

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'The sooner we get rid of sales people, the more money we make," John Stanley told the audience at Petfood Forum 2015.

He said bloggers may be the new marketing channel. “If you don’t have a blogger who is highly successful promoting your product, you have a problem. You can influence bloggers by giving them their product. That has to start with the industry, not the retailer.”

The changes in retailing are also dramatic. Today’s consumers going from digital to physical to digital. Stanley said 50% of Americans start the purchasing decision at home with online research. Then they move to the retailer, but 90 percent will leave the retailer without making a purchase.

“Consumers are forced to wander a confusing store and deal with salespeople,” said Stanley. “The sooner we get rid of salespeople, the more money we make. Engagement is the key. We need people who are going to engage with the consumer. We look for people who make our day, people who put a smile on our face. If there are no day makers in the process, your business will go downhill.”

The other challenge is brick and mortar competing with online retailing. “We have to be developing an online strategy,” says Stanley. “Suppliers will be selling directly to consumers by 2020.” Stanley said forecasts of the percentage of sales that will be online led by 2020 range from 40% to 65%. “I don’t care what it is, but it will be a major percentage. You have to be preparing for that.”

  Petfood Forum was held April 27-29 in Kansas City, Missouri, USA, and attracted more than 2,000 professionals from the pet food industry.