I recently had
opportunity to look at pet retail industry in USA.The industry is growing by 6% a year and, like many other retail sectors, is going through some major changes.
In many retail leisure sectors, industry is splitting into commodity retailing and lifestyle retailing.
65% of pet products in USA are still purchased as commodity products via supermarkets and mass merchandisers, but growth sector are specific pet “box” store retailers who are introducing lifestyle retailing.
Petco has 5.4% of U.S. market and are introducing 12,000 to 15,000 square foot pet stores across USA.
Their rival Petsmart had 612 stores and 9.6% market share. Their stores are 19,000 to 26,000 square foot and include Veterinary Surgeons and a trial on Pet Hotel. I am sure these two companies will be fighting it out for pet supermarket dominance over next few years.
The traditional corner pet store seems to be sector that is losing market share and is down to 7.7% of market and I would not be surprised to see that shrink further while overall market expands.
Who is growing market and spending dollars? Pet Parents. These are singles, generation X and baby boomers using pets as child substitutes.
To attract this time poor but cash rich market sector, you need to provide an experience.
Distributors and retailers both need to be aware of how to build experience economy as it relates to pet industry.
Providing an Experience Customers are bored with seeing products on retail shelves, they are looking for more exciting experiences. The challenge is, are you in commodity business, selling products or are you providing an experience. Commodity sellers place tangible items on shelves and benches and sell units of product. The challenge is always to increase average sale per customer, one way of achieving this is to introduce service and services i.e. activities you execute. Many retailers have achieved this by providing delivery services, demonstrations, tasting stations and technical knowledge. Now is time for retailers to move on and provide an experience. This means we should create an experience for customer where they are fully engaged with what we are doing. In USA, Pike Place Fish Market is looked on as ultimate experience in Seattle’s retail scene. In Australia, Beechworth Bakery in Victoria, many would argue, creates same experience. Whilst in South Africa, Lifestyle Garden Centre is recognised as a global leader in experience market. The guide to building an experience is explained in book The Experience Economy, work is theatre and every business a stage by B.Joseph Pirie II and James H. Gilmore. Think of developing your business experience based on four key elements:
