Techie Tails: Pet aisles are getting 'smarter,' and the demand for e-commerce options grows as grocers adapt to the digital age.
The humorous depiction of Astro, the dog from "The Jetsons" who takes daily walks on a treadmill, is no longer far from reality as pet owners continue to look for ways to use technology to not only make their lives easier, but also to make their pets' lives more luxurious.
A recent meme circulating on social media sums it up: Captioned "Sometimes I wonder if I spoil my cat, seeing him in with his iPad in his yurt," the image features a cat fixated on the screen display while cozied up in a kitty-sized tent. The hilarity of the meme underscores the way pets are living in this day and age, which gives grocers plenty of ways to fetch more sales.
Pet Aisles Get Smart
The techie mentality is trickling into the pet retail world. Manufacturers are beginning to offer high-tech items to help grocers move their pet aisles into the digital age.
For example, Nestle Purina has technology in the works that will futurize pet aisles with digital touchscreens that shoppers can interact with to find the best products for their pet, and then have those products highlighted in ' the aisle with under-shelf lighting.
Additionally, Freshpet is testing a "smart" refrigerator for its fresh pet food that can alert retailers when something needs to be repaired, and even when it is time to restock the product.
Referencing Samsung's smart refrigerator TV ad that reminds its owner they're almost out of milk, Scott Morris, president and co-founder of Secaucus, N.J.-based Freshpet, says, "We're using some of that technology to move toward a smart fridge" for retailers. It will be able to warn them "when the temperature is off, the lights aren't working, or the compressor that generates the cold air is using a lot of energy, which means it may break down soon. It may also be able to tell us if something is out of stock and needs to be reordered."
The pet aisles of many supermarkets are growing more and more reminiscent of the perimeter of the store as refrigerators begin to become a mainstay. With the demand for premium, fresh pet food on the rise, grocers need to start thinking more critically about refrigerator placement in pet departments to keep up with the needs of their shoppers.
Retailers can take a page out of Target's book when looking at how to modernize their pet food sections. According to Morris, the mega-retailer is exceptionally good at bringing in newer items and authorizing them early on, as well as merchandising and supporting them in high-profile locations such as endcaps.
Target has also been using refrigerated display cases for premium foods for several years. The trend has clearly caught on, evident in the success of Freshpet: The company had zero refrigerators in stores in 2006, and today it has 18,000.
"Refrigerators help retailers' aisles look good and even grab attention," Morris says. "You see a fridge with a big header and it draws you down the aisle, and I've seen evidence of that over the years."
Competing With E-Commerce
With e-commerce on the rise, some consumers are turning to online shopping to avoid lugging heavy bulk bags of dog food and kitty litter to and from their cars. However, this does not mean there is no hope for brick-and-mortar grocery stores. Building enticing pet sections that become a destination or spicing up a click-and-collect or grocery delivery service can help retailers hold their own in today's digital shopping climate.
For example, Morris says that because the company's products are refrigerated, and therefore difficult to ship, shoppers who desire these premium pet foods will flock to their nearest grocery stores to pick it up instead of logging into their Amazon account. For those who don't have time to grocery shop, the items can be hand-picked and delivered to people's homes through services such as the ever-growing Instacart.
Joe Toscano, director of trade and industry relations for St. Louis-based Nestle Purina PetCare, says the growth of e-commerce brings both good and bad news for grocery retailers.
"A retailer with a well-established pet department needs to have an in-store experience that's better than it's ever been," Toscano says. "Offering the right products at the right price and presented in the right way will help drive in-store sales. Grocery retailers tend to have shoppers in their stores almost weekly, so if they can show pet owners that they have in-store what the consumer is making an extra trip to pet specialty or online for, they can certainly win."
Additionally, Toscano calls click-and-collect programs "absolutely essential to meeting the lifestyle needs of today and tomorrow's ever-powerful pet shopper."
Peter Seidita, director of sales strategy and execution for Meadville, Pa.-based Ainsworth Pet Nutrition, further urges that consumers' go-to pet products be available wherever they shop, which includes online.
"Ainsworth Pet Nutrition is working with our grocery partners to share best practices when it comes to e-commerce insights," Seidita says. "We feel there are real opportunities to leverage brick-and-mortar assets and attract new customers with such things as pickup and delivery services."
The Mark of Millennials
The importance of e-commerce is largely being driven by millennials, who demand access to the most premium products in the most convenient way possible.
Toscano says that at 75 million strong, millennials are not only the largest living generation, but are also now the largest pet-owning generation. Citing data from American Pet Products Association (APPA), millennials surpassed boomers by three percentage points last year to account for 35% of all U.S. pet parents, and are getting their first pets by age 21 on average, compared with the typical baby boomer, who waited until age 29.
"This generation will make a big impact on the category, as they decide how to allocate their $3.39 trillion in buying power on their 'starter children,'" Toscano says. "Millennials demand more from their own food than other groups, spending a premium for healthier fare at a rate that's 1.5 to 2 times the rate of boomers, according to a 2015 Nielsen Global Health and Wellness Survey."
Building Up and Building Out
E-commerce aside, there are still plenty of shoppers who are looking for an exceptional in-store experience, and the pet aisle is no exception. Many retailers have been targeting these pet-loving, brick-and-mortar shopping consumers by thinking of ways to make their pet sections a destination.
For example, Minneapolis-based Lunds and Byerly's has stepped it up a notch by attaching Bone Marche pet markets to some of its stores. The pet boutiques are separate from the main store, with an independent entrance, meaning pets are welcome in the store as long as they are leashed. A pet waste bag and disposal area are located outside the entry doors of Bone Marche, which stocks premium products across all categories covering a variety of species, including cats, dogs, rabbits and even fish.
"The pet department in most grocery retailers has continuously been a key driver for traffic," says Leslie Yellin, EVP of Moonachie, N.J.-based Multipet International Inc. "Retailers have figured out the strength of the pet department by knowing that most trips to the store in some way involve pet."
Toscano says a retailer Nestle Purina recently worked with has also found success in expanding the space and offerings in its pet department. "To accommodate these new opportunities, this particular retailer expanded their space dedicated to the pet department in their stores and brought a number of new items into their mix," he says. "They supported the additions and the entire space with a balanced promotional strategy that highlighted the new and gave the appropriate spotlight to the existing brands that have been the foundation of the pet department. In doing so, their pet department continues to perform at a high level."
Many manufacturers are willing to work with retailers to help ensure they are making the most of their pet sections, even if they don't have the room or resources to expand. For example, Seidita of Ainsworth says the company offers a shopper marketing initiative, dubbed Pet Aisle Conversion and Engagement (PACE), to its retail partners, which helps them "incorporate in-store signage and best practice shelving principles to alert consumers of high-quality brands and recipes--like Nutrish--conveniently available in-store," he says.
Ainsworth also helps its retail partners with a variety of merchandising options that can call attention to products. "We continue to create innovative and educational shippers, pallet displays and in-store signage to educate consumers on pet food ingredients, quality and the benefits of super premium brands, and use creative and impactful direct mailers, in-store coupons, IRCs and clip strips to drive our in-store presence," Seidita says.
Another way for retailers to win over shopper loyalty, especially among millennials, is to do good in their communities and even on a national level. According to Toscano, millennial pet shoppers are more receptive to retailers and brands that run promotions supporting a charitable cause, such as purchases linked to donations or that offer a sustainability platform. "Millennials also tend to seek out (and stay loyal to) brands and products that are supporting their local communities," he says.
One retailer doing an exceptional job in this department is Sunbury, Pa.-based Weis Markets, which has been running its Paws for Pets program every May for a decade. In the initiative, shoppers are given the option to review a list of items needed at pet shelters to purchase and place in a donation cart at the front of the store; to make a donation at the register; or to donate online. The program is estimated to have helped over 150 local shelters this year and raised a record $309,000 in 2017.
"Every year, it has grown in terms of customers engagement," says Ron Bonacci, VP of marketing and advertising at Weis. "It's been a real success for us, and we have adopt-a-thons in which the shelters come to the stores and we do events. It's a satisfying cause to support. When they say that more than 60% of households have a pet that is part of the family, there is no better way than to help that need." He says he often comes across a few store managers that have ended up adopting a dog at the events themselves.
Manufacturers have also been doing their part. For example, Ogden, Utah-based American Nutrition Pet Brands sponsored the Arizona Pet Project's 15th annual Hero Awards, which "celebrates the heroic efforts of service or personal survival by animals who have acted to save the life of a person, performed services within the community or overcome their own circumstances to survive and thrive against the odds."
"We believe in giving back for meaningful causes at American Nutrition," said Steve Mills, SVP of customer brands and co-manufacturing, in a statement. "We are honored to again be sponsoring this amazing event and to be able to increase our participation from 2017. There's nothing better than celebrating heroic animals while simultaneously raising funds and awareness for a well-deserving organization, and it's something we've been looking forward to since last year's event."
35% Amount of U.S. pet parents who are millennials, now the largest pet-owning demographic.
Source: American Pet Products Association
21 Average age at which millennials get their first pets, vs. 29 for the the typical baby boomer.
Source: American Pet Products Association
$26B Overall pet food sales in 2017.
Source: Pet Food in the U.S. 13th Edition, Packaged Facts
Pet Owners Hold Key to Success as Center Store Volume Migrates Online
The online pet shopper spends twice as much as the in-store only pet shopper, making them a priority target when building your e-commerce strategy.
What's feeding growth in e-commerce today? Just ask Amazon. The e-retail giant reported its number two best-selling brand is its recently acquired recently acquired Whole Foods Market[R] 365 Everyday Value[R]. Amazon now leads US online grocery in market share with 18 percent--double that of closest rival Walmart. (1)
With around a quarter of American households currently buying some groceries online, web-based grocery sales are expected to increase rapidly --growing by 20 percent year over year, and with 40 percent of center store volume expected to migrate online by 2020. (2)
With these projections, e-commerce may feel a little like the 'wild west' to grocers.
But capturing a piece of the online pie doesn't have to entail an immediate overhaul to how you do business. It may be as simple as identifying the biggest opportunities, and building your strategy from there.
Take the pet department for example. The Pet Care category (food, litter and supplies) is currently ranked number one in total sales out of 265 categories sold in US supermarkets. (3) In fact, 73 percent of US households buy Pet. (4) But did you know that pet owners who shop online spend twice as much on pet food and treats than in-store only pet shoppers? (5)
Growing at over $2.5 billion each year since 1994 (6), Pet has long been the big dog of center store. And with almost a quarter (23 percent) of pet sales projected to move online by the year 2020 (7), below are some simple ways to meet your pet shoppers' needs, and promote customer loyalty.
Navigation is Key
Showcase in-aisle signage that communicates your e-commerce solutions, i.e., home delivery or curbside pickup. Invest in SEO to position your site as a top result when consumers search for pet products online. Prioritize Pet on your store homepage so that it appears above the fold, or create a special Pet landing page.
Prioritize the Best-Selling Brands
Ensure that your online assortment mirrors your in-aisle selection. Position your best-selling brands prominently on your pet landing page, and feature engaging brand content, such as product photos, video and ratings & reviews.
Make Checkout Easy
Offering an autoship service will not only allow your shoppers to save time and money, but will also increase repeat buyers. Simplify your online checkout process and be sure to communicate free shipping options. Partnerships with services like Instacart provide a turnkey way to provide these benefits to your customer.
Offer a Variety of Fulfillment Options
Home delivery through services like Instacart, Shipt and Peapod[R] are growing in popularity, as is click & collect. The key is to clearly communicate these options both in-store and online. It's also important to link your in-store and online inventory to ensure a seamless process.
No doubt the grocery business is changing rapidly due to the emergence of e-commerce.
As the category leader, Nestle Purina[R] offers strategies to capture the valuable pet shoppers' sale, both in-store and online. Prioritizing Pet is important to building your overall e-commerce business, and potentially doubling your pet sales over the next two critical years.
(1.) One Click Retail
(2.) The Digitally Engaged Food Shopper Report, FMI and Nielsen
(3.) IRI Public Information
(4.) American Pet Products Association Industry Trends CMI Analysis
(5.) Nielsen Custom Panel 52 wke 6/24/17, Pet Shopping Tracker--Online vs Offline Report, 2017 and Nielsen Category Fundamentals, 2017
(6.) American Pet Products Association Industry Trends CMI Analysis
(7.) Nielsen (AOC) + Gfk (PS) + 1010 (e-commerce) 52 wke 8/12/17 and NPPC Proprietary Internal Forecast
What's on the Menu for 2018?
As the pet industry prepares to launch itself into the future, manufacturers are getting more innovative with their pet food offerings to ensure they are meeting the demand for premium options that assuage consumers' health concerns. In the new report Pet Food in the U.S., 13th Edition, Rockville, Md.-based market research firm Packaged Facts estimated that overall pet food sales increased almost 6% and topped $26 billion in 2017.
Here are the top pet food trends that Packaged Facts foresees making a mark in 2018:
Home-delivered pet food. Meal kit delivery might no longer be just for humans. Personalized offerings have been hitting the market that offer customizable options such as fresh and homemade-quality foods. Examples include PetPlate, The Farmer's Dog, JustFoodForDogs, Ollie and Just Right by Purina.
Foods with preventative benefits. In the Packaged Facts February/March 2017 National Pet Owner Survey, more dog and cat owners (76% and 71%, respectively) than in previous years of the survey agree with the statement "High-quality dog foods/cat foods are effective for preventive health care."
Micro-targeted and functional pet foods. More pet parents are looking for foods that meet their furry friends' specific nutritional needs. Examples include age, breed, size and weight, activity level, indoor vs. active and type of fur, as well as allergies and other chronic health conditions. These food options often contain functional ingredients such as probiotics, omega fatty acids and glucosamine.
DIY pet food. Many pet owners supplement their pets' diets with homemade food such as grilled meat and cooked vegetables, as well as enhancing meals with additions including mixins and toppers. Pet food makers are catering to this need by creating products that can be personalized, or used in combination with other products, such as raw and dehydrated pet food that involves some preparation and allows for further customization by the pet owner.
New directions for proteins and other ingredients. Innovation around protein has been rampant in recent years as pet food producers launch new products to meet consumer interest in protein, including varieties of single proteins, proteins as the first ingredient, multiple proteins and exotic proteins. Packaged Facts experts say this trend is largely linked to the rising popularity of ancestral formulations that aim to recreate the diet of dogs and cats before they were domesticated.
Crazy Products for Crazy Critters
Here's a look at some of the most interesting and innovative pet products on the market today.
Multipet's Aromadog line
The perfect find for pet parents who want to give their dogs some homeopathic TLC. With every squeak, the toys release a calming blend of lavender essential oils into the air, helping improve the dog's mood.
Apollo Peak Cat Wine and Dog Beer
Have you ever wished you could crack a brew with your dog? These all-natural dog beers are brewed with fresh herbs, whole chicken broth and other functional ingredients. The beverages come in playful names such as Twisted Tail Ale, Extra Special Biter and Oatmeal Snout. Cats, the more sophisticated species, have the option to sip on libations such as White Kittendel, Catbernet or Meowtini.
Petkin's Cool-to-Touch Poopbags
Helping to make walk time a little less unpleasant, these handy bags are cool to the touch and freshen users' hands with menthol as they do the dirty work.
Petzi Treat Cam
Pet parents who miss their furry friends while away or at work can now watch what their dog or cat is doing during the day right from their smart device with this nifty gadget, which provides a snack on demand when verbal commands are obeyed via a "universal treat launcher."
iFetch Too Interactive Ball Thrower
Constantly throwing a ball for an overeager dog can be exhausting. This automatic option can launch standard-size tennis balls both indoors and outdoors. The balls can be launched 10, 25 or 40 feet, and there is also an option for a variable setting to keep dogs engaged and guessing.
The world's first game console for dogs. The interactive game keeps dogs busy for hours and offers treats for continued stimulation.
Caption: Target was an early adopter of refrigerated display cases for premium foods.
Caption: Apollo Peak cat wine is available in Pinot Meow, White Kittendel, Catbernet and Meowtini varieties.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Quarterly Pet Report|
|Publication:||Winsight Grocery Business|
|Date:||Mar 1, 2018|
|Previous Article:||A Fresh Take on Discounting: Wakefern's Price Rite banner takes on a new look and feel to reflect changing expectations of the value-minded shopper.|
|Next Article:||An Appetite for Exclusivity: Retailers' investments in private label perishables continue to freshen trust, quality and loyalty bonds with shoppers.|