These days, pets – particularly dogs and cats – are provided with far more than a mere roof over their heads and fresh bowls of food and water. Rather, with the “humanization” of these animals that has occurred over the past few years, they are being spoiled with toys and treats much as if they were any other member of the family. 

"There is a simple way to determine whether or not a consumer's pet is "part of the family" versus just "an animal he or she has around the house," said David Diamond, President of David Diamond Associates, who is an adviser to top retail and CPG companies and a regular ECRM columnist. "It's a simple proxy question that gets to the heart of the matter; just ask: “Each year, do you buy your pet a Christmas present?” This turns out to be a very telling question, because every “real” member of the family needs to get gifts – and provides market researchers and pet products vendors, an incredibly simple way to find the target audience. These are the people who are driving the category growth."  

This growing trend isn’t just good for pets, but it’s also good for suppliers and retailers of pet products, as consumers are willing to shell out more dough to find new and unique products to keep their pets happy. Indeed, according to the American Pet Products Association (APPA), U.S. consumers spent more than $58 billion on their pets in 2014, purchasing everything from high-end food to organic treats, plush toys, and even designer outfits. And this spending will only increase; APPA estimates that in 2015, pet expenditures will top $60 billion. 

 
Because the category is seeing such rapid growth, companies are finding themselves with vast opportunities to expand the category in a variety of different ways. The following gives a few examples of the ways in which companies can build upon their pet business.

Home-cooked and Raw Foods:
Have you heard the old saying that after many years of co-living a pet begins to resemble its owner? Walk down the pet aisle in your local supermarket, and you’ll see that the same trends in pet food are starting to mimic those of human food – they are getting healthier and have fewer, more natural (and sometimes even organic) ingredients.

These new food offerings include freeze-dried treats and raw meats both of which contain less processed ingredients. Despite requiring some preparation from owners and a higher price point, these products continue to gain steam and not just in specialty pet stores but rather in mainstream retail venues.

However, companies looking to maximize on high price pet food products must balance these potential price premiums against the higher costs of transporting and storing such items.

Channel Blurring:
While the pet category continues to grow, the fragmentation of the channel continues to increase as well, and we’re starting to see a variety of non-traditional retail channels adding pet products to their shelves, such as hardware stores like Home Depot and dollar stores like Five Below.

Rx, OTC Services:
Even pet OTC products are seeing a boom; in 2014 pet owners spent over $14 billion on OTC medicine and supplies for protection and treatment of a variety of ailments, according to the APPA, and some retailers, such as Kroger and Target are even filling pet prescriptions. This added service is a great convenience for shoppers as they can drop off the prescription, shop for groceries (and pet food), and when they are done, swing by the pharmacy to pick up heartworm medication for Max, the family dog. 

While mass retail channels can offer better prices, pet specialty stores typically offer added value services like grooming and obedience classes with a personal touch that’s difficult for a chain to match. 

 
One area in which both the chains and specialty pet stores can better leverage to engage their customers is social media. Pet is among the strongest categories with the highest amount of shared content, yet retailers and brands still have room to enhance their connections with these consumers via strong social media storytelling. (See ECRM’s exclusive video Q&A with Brad Nix on Social Media and the Pet Category, Part 1, Part 2, and Part 3).

How is your brand celebrating Adopt-A-Dog month? Let us know in the comments section below!

Join others in the pet category as they present innovative offerings during ECRM’s Pet event taking place Monday, April 25th through Thursday, April 28, 2016 at Westin Chicago Northwest. 

For more information about this event please contact Melinda Young at MCYoung@ECRM.MarketGate.com or at 440-248-2190.