Packaged Facts’ recent study on Pet Product Retailing in the US (February 2015) reports that two-thirds of pet product shoppers are loyal to one leading retailer or, at least, to one single retail channel. Pet owners are more loyal, retail-wise, in their purchases of pet medication and pet supplies, but tend to do more shopping around for petfood.
Pet owners have a variety of reasons for choosing where they shop for pet products. Packaged Facts survey data show that convenience plays a big part in retailer choice for half of pet shoppers. Price is the next main factor, with two-fifths drawn by low prices and a fourth by promotions and sales. Product selection, in turn, plays a key role for a fourth of pet product shoppers.
Loyal shoppers are of course valuable customers, and retailers employ various tactics to win this loyalty. In keeping with the reasons pet owners give for choosing where they shop for petfood and supplies, product pricing is invariably key to the mix, as evidenced by Walmart’s ongoing success with everyday low pricing (EDLP), including in the pet product aisles. PetSmart has been countering with heavy price promotions, at times storewide. Moreover, both PetSmart (with PetPerks) and Petco (with PALS) rely heavily on shopper loyalty programs featuring substantial savings. Pet product shoppers’ high interest in coupons also underscores the power of competitive and special pricing.
But also essential to the shopper loyalty equation are compelling brands. For years, consumers have been drawn to pet specialty stores due to the wide product selection. More recently, supermarkets and mass merchandisers have begun focusing on offering a wider choice of petfood options, paying special attention to premium and natural products, including in their store-brand offerings. Nearly one-fifth of pet owners strongly agree that the quality of store brand products impacts where they purchase their petfoods. Other factors toward building customer loyalty include corporate responsibility and environmental consciousness. The former is especially important in the pet specialty channel, particularly in terms of animal welfare.
In addition, as is consistent both with the importance of convenience in consumers’ choice of retailers and with the growing share of pet owners who buy petfood online, home delivery of petfood is increasingly impacting the shopper loyalty equation. Packaged Facts survey data show that 12% of dog owners and 11% of cat owners are already having petfood regularly delivered to their homes, rising in urban areas to 19% of dog owners and 14% of cat owners (see Figure 1). In more general terms, about one-third of dog owners and cat owners like the idea of home delivery for petfood. Petfood is well-suited for regular delivery in being an essential product consumed at a steady rate, and for which brand switching is somewhat infrequent.
Amazon.com, already an 800-pound-gorilla in one-stop shopping as well as the most popular single website for pet product purchases, will be a daunting competitor in this arena. Many of the barriers to petfood delivery are mitigated by Amazon Prime membership, with its free shipping and quick delivery. There’s also Amazon’s Subscribe and Save, which allows pet owners to schedule their food delivery ahead of time and save a percentage of the cost, as well as Prime Pantry, where pet owners can pay a flat fee for delivery of one large box of goods. In this context, the weight and bulk of petfood, long the highest hurdle to online sales, is now likely to make home delivery that much more appealing, including for an aging Boomer generation.
Petfood retailers and marketers should take heed that retailer preference, brand loyalty and home delivery are, for a significant segment of consumers, likely to intertwine. Packaged Facts survey data from January 2015 show that 19% of dog owners who had switched dog food brands within the last three months were opting for regular delivery of dog food, compared with only 12% of dog owners overall, and 17% of cat owners who had recently switched cat food brands were opting for regular delivery of cat food, compared with 14% of cat owners overall. Petfood choices, therefore, may increasingly be sealed with an online click.