The current “omnimarket” landscape in the pet industry — which includes the availability of a perplexing array of products from a multiplicity of convenient sources — means that marketers must compete aggressively and substantively for consumer mindshare and customer loyalty.
Cross-shopping in the pet food space
As reported in Packaged Facts’ recent “U.S. Pet Product Retail and Internet Shopping Trends,” this holds especially true in the retail/e-tail arena, where cross-shopping for pet food — buying pet food at more than one place — is common both within and across channels.
In the mass market, cross-shopping is especially high between Walmart and Target, as rival supercenters — at an index of 204 (with an index of 100 representing the norm), such that shoppers who buy pet food at Walmart are, additionally, twice as likely buy pet food at Target as are pet food shoppers on average (see Table 1). Cross-channel is also high between supermarkets/grocery stores and Target (at an index of 168) or, to a lesser degree, between supermarkets/grocery stores and Walmart. Target pet food customers show a very high level of cross-shopping for pet food elsewhere.
Within the e-commerce arena, cross-shopping is very high between rivals Chewy and Amazon — at an index of 174, such that shoppers who buy pet food at Chewy are, additionally, three-fourths again more likely to buy pet food at Amazon than are pet food shoppers on average.
Within the pet specialty channel, similarly, cross-shopping is very high between PetSmart and Petco (index of 231), though not between these pet superstores and other pet stores, a classification spanning the newer set of regional chains/franchises as well as traditional local/independent pet stores.
Across channels, cross-shopping is especially prevalent between Walmart and Amazon, as general market behemoths. Conversely, there is a notably low level of customer base overlap between Walmart and pet stores other than PetSmart or Petco.
Loyalty to pet food brands
Pet food brands have it relatively easy, loyalty-wise, aided by pet parent reluctance to challenge their pets’ digestive systems by switching pet foods. (Supplementing pet foods with treats, toppers and add-ins, including from the kitchen, is another story.) MRI-Simmons data show that 87% of dry dog food purchasers buy only one brand, as do 79% of wet dog food customers. Brand loyalty is only slightly lower in the cat food section, at 85% of dry cat food purchasers and 75% of wet cat food purchasers.
Brand loyalty rates edge up by a few percentage points among those with only one dog or one cat, and moreover have edged up slightly since 2007 — despite or perhaps partly because of the current diversity of brands, which could push more shoppers into the comforting arms of the familiar.
Even so, brand loyalty rates for dog or cat kibble did temporarily notch down in the wake of the Great Recession, and this inflationary era similarly poses some threat of consumer downshifting in the tier of pet food brand purchased.
At the intersection of retailing and branding are store brands, which can tie in neatly to customer loyalty and reward programs, and by extension into successful digital marketing strategies. Among pet food shoppers who buy private label, 79% only buy store brand dry dog food, 78% only buy brand wet dog food, and 81% only buy store brand dry dog food. Few leading pet food brands, whether mass-market or specialty/superpremium, do as well by this loyalty metric. Caveat: In terms of brand loyalty, store brand wet cat food falls at the other end of the spectrum, with only a 49% sole usage rate.
Some of the brand loyalty strength of private label pet food is anchored by Costco’s Kirkland Signature and Sam Club’s Member’s Mark, as wide-ranging superbrands. For this reason, warehouse clubs are relatively spared from having to share pet food customers with other channels.
US pet industry reset: Physical, digital shopping trends