Pet product marketers and retailers might want to rethink their strategies due to an increasingly competitive marketplace, according to Packaged Facts.
Options include competing on price, incorporating premium and natural products into the product mix, improving merchandising, staging events and promotions, playing up pet treats, and becoming destination information sources (especially online), according to the report "Pet Product Retail Channel and Consumer Shopping Trends in the U.S."
Pet owners are shopping around, says David Sprinkle, publisher of Packaged Facts. Data from Packaged Facts' September 2011 Pet Owner Survey data show that nearly half (47%) of pet product buyers shop for these items at a variety of stores.
Additional Experian Simmons data cited in the report show that the percentage of dog or cat owners who are channel-loyal -- shopping for pet products in a single retail channel -- fell to 41% in 2011, down from 53% as recently as 2006.
Over the long term, three factors have greatly intensified competition: The expansion of the two big-box pet specialty chains (Petsmart and Petco); the growth of mass merchandisers and supercenters; and the rise of the Internet.
Budget-conscious consumers demand more value in the products they buy, chart out grocery shopping trips beforehand, and are willing to switch channels and brands to make ends meet or satisfy shifting priorities, according to the report.
There is still a strong upscale element to the pet market. But in the wake of the "premiumization" trend of the early 2000s, many pet owners have already done their trading up, and, with the recession that followed, some have since scaled back on pet spending.
Still, the pet market's strong prospects continue to attract new players, expanding the range of retailers vying for market share, according to the report. The players newly flexing their muscle include private label, further complicating strategies and options for traditional national brand marketers.
Packaged Facts survey data show high levels of “affection” for store brands among pet product buyers, 49% of whom are buying more store-brand food and beverage products for household use these days, and 45% of whom agree that "store-brand pet products are often as good as national brand name products."