The market channel opportunities for pet food and products are ever-expanding: pet specialty stores, supercenters, grocery stores and wholesale clubs are just some of the avenues pet owners have when shopping for their furry friends. But one channel — the internet — has seen incredible growth just in the last year, and it’s likely to continue to gain ground as consumer shopping habits shift towards convenience, accessibility and competitive pricing.
E-commerce in the pet food space: a look at current patterns and growth
E-commerce was one of the hot topics at 2019’s Petfood Forum, with good reason: 17% of all pet product dollars in the U.S. were spent online in 2018, according to Packaged Facts’ “Pet Market Outlook 2019–2020” and David Sprinkle, research director for Packaged Facts, during his Petfood Forum presentation “Online, Omnichannel, Omnimarket.” And while more dollars are still being spent in brick-and-mortar establishments (see Table 1), it’s hard to deny the lure of the online space when it comes to selling opportunities.
TABLE 1: Internet purchases were responsible for 17% of all pet product dollar sales in the U.S. in 2018, putting e-commerce firmly in the middle of the pack when it comes to popular purchasing channels for pet owners. | sellingpix | AdobeStock
According to Nielsen data presented by Mike Black, vice president of marketing for Profitero (an e-commerce performance analytics platform), at Petfood Forum 2019, the e-commerce numbers for pet food specifically are equally compelling. In his session “Pet Food on Amazon and Beyond,” Black pointed out US$3.6 billion in e-commerce pet food sales in 2018, marking 11% of total sales in the category and a very substantial 53% growth compared to brick-and-mortar growth of 0.7%.
Where, specifically, are these online dollars going? Unsurprisingly, Amazon.com tops the list of preferred digital pet product purchase hubs, with Walmart.com and Chewy.com coming in close behind, according to a Packaged Facts consumer survey of pet owners (see Figure 1). Chewy and Walmart are also the two closest price competitors to Amazon when it comes to pet products: according to Black, in 2018 Walmart.com’s pricing was only 1.6% more expensive than Amazon.com on average for pet supplies including food, and Chewy.com was actually 2.3% cheaper.
FIGURE 1: Unsurprisingly, Amazon.com is at the top of the heap when it comes to online spaces pet owners choose to purchase through, with Walmart.com and Chewy.com rounding out the top three. | katusha | AdobeStock
There are other considerations besides price keeping competition fierce in the online pet space. A “price wars” study conducted by Profitero in the fourth quarter of 2018 revealed that Chewy is seen as a specialist in pet products, where Amazon is still looked at as a one-stop shop, catering to two different types of customers. According to Packaged Facts, age also plays a factor, with the largest percentage of pet owner households in the age categories between 18 and 54 saying they do their pet product shopping online. It is worth noting, however, that in this day and age, 8.8% of even pet owners in the 75+ age category can be found purchasing their pet products online.
How to take advantage of e-commerce in pet food
If you’re ready to begin taking advantage of e-commerce opportunities, or are already in the space but want to ensure you’re optimizing your benefits, what do you need to focus on? According to Black, there are three key elements to accelerating e-commerce: availability, traffic and conversion (see Figure 2).
FIGURE 2: There are three keys to a successful online sales presence, and knowing how to maximize availability, traffic and conversion goals can boost sales significantly in the digital space.
Availability
When it comes to availability, there are three key components: your product must be in stock (so you should aggressively monitor “out of stock” notices, according to Black) and you must have a variety of product available; your pricing must be competitive in the online space; and you must pay attention to first-party and third-party sales analytics to ensure you’re being found where products are being sold.
Traffic
Next, your products must be visible to potential purchasers in order to draw traffic, and that’s where the focus on your place both in various online categories and in search engines comes into play. According to Black, 70% of shoppers never click past the first page of results in an online search; unsurprisingly, this means that sales are heavily concentrated on page 1 search results.
It is worth it to put effort into learning how search engine algorithms work and what keywords are most important to your brand: products that move up to the bottom of page 1 search results see an 84% boost in sales, making it to the middle of page 1 results in a 100% boost and getting to the coveted top of the list can achieve a 152% increase in sales, according to Profitero data.
Conversion
Finally, conversion: once your customers have been made aware of your product and have found exactly what they want, you must get them to click on the “Buy” button. To do that, there are three things to keep in mind: the power of ratings and reviews, product content (i.e., the quality of written or visual content you use to market your product) and competitive pricing.
The right marketing can be a huge boon to the company that utilizes it properly, according to Black. Adding a video where there wasn’t one previously, for example, can lift sales an average of 55%. Increasing the number of images can lead to a 23% boost on average. And adding high-quality written descriptions and other content can boost sales an average of 8%.
The future of e-commerce in pet food
Brick-and-mortar stores are still playing the majority role in pet product purchasing, but there’s no doubt that the internet is on its way up in the rankings. With plenty on its side as a convenient sales platform from the consumer point of view, it’s worth looking into to ensure your company is getting the most out of your e-commerce goals.
