Source: Furbo
Pets rule the retail roost
Through a special arrangement, presented here for discussion is a summary of a current article from the blog of LoyaltyOne. The article first appeared on Forbes.com.
Pets are wrestling control over larger parts of household budgets, along with owners’ hearts, as demonstrated by Valentine’s Day. Owners were expected to spend $886 million this year on their pets for V-day, up from $519 million when the National Retail Federation first asked in 2008.
Overall, $72 billion was expected to be spent on pets in 2018, compared with $43 billion 10 years earlier, the American Pet Products Association (APPA) reports. From nutrition-specific foods to doggy cams and app-connected food bowls, pet-related products are feeding an industry with sales more than three times greater than children’s toys ($21.6 billion in 2018).
Pet-owning households in the U.S. now exceeds those with children — 84.6 million versus 52.8 million, according to the APPA. In short, pets are increasingly capturing the love once reserved for kids.
Saks, Zulily’s and Home Depot are among retailers offering niche pet products. Barnes & Noble, Bath & Body Works and Macy’s invite dogs into stores to browse with owners, recognizing the potential traffic boost.
But it’s in more specialized products and services where pet potential may be greatest for retail:
- At Miami’s Ocean Bal Harbour condominiums, residents treat their pups to a five-star grooming spa that features deep fur conditioning, de-shedding treatments, cooling eye masks and “Yappy Hour.”
- Pet Releaf in Littleton, CO, markets THC-free cannabis for pets as an aid for anxiety, seizures, arthritis and other pain.
- The app-connected Furbo camera enables owners to talk with their pups and release treats.
- Handicappedpets.com sells nothing but harnesses, diapers, blind halos and other products to help older or handicapped pets live comfortably.
The roles our domesticated critters play in our purchase decisions appear to be on a powerful curve, aided in large part by education and social media. Even an awkward-looking cat, Lil Bub, can attract two million Instagram followers (and you can buy a Lil Bub plush toy at Bed Bath & Beyond).
Which means a shopper doesn’t even have to own a pet to be influenced by one. For those who do, Valentine’s Day may be over, but St. Patrick’s Day is within days. And heck, you can start planning for Halloween now.
- Pet Owners Spending $75 Billion – How Macy’s, Bed Bath and Beyond and Others are Helping – Forbes
- Fewer consumers celebrating Valentine’s Day but those who do are spending more – National Retail Federation
- Pet Industry Market Size & Ownership Statistics – American Pet Products Association
- U.S. Toy Industry Retail Sales Generated $21.6 Billion In 2018 – NPD
- 12 Big Retail Chains You Didn’t Know Were Dog Friendly – Wide Open Pets
- Oceana Bal Harbour’s New Pet Spa Pampers Posh Pups – Forbes
- Pot for pets? Cannabis products marketed for animals – CBS News
- handicappedpets.com
- Furbo Dog Camera
- iamlilbub – Instagram
Discussion Questions
DISCUSSION QUESTIONS: Do you see similar drivers when it comes to spending on pets and kids? Will pet spending plateau soon or will it continue to present an increasingly broad range of opportunities in the years ahead?
Poll
BrainTrust
Zel Bianco
President, founder and CEO Interactive Edge
Georganne Bender
Principal, KIZER & BENDER Speaking
In my opinion pets and spending on pets follows a similar path as Bev Al. Whether the economy is good or bad, people still drink their wine, beer and spirits. Same with spending on pets. In fact, couples spend on gifts for pets of their adult children. I know this to be true, as we do this with our daughter’s dog.
This is a study in human psychology. It is a fact that pets tend to be a calming influence on us humans. Coupled with a generally accepted observation that we are a more anxious society in general than we were, focusing attention and appreciation on our pets is going to grow. And who doesn’t like to buy things for babies and infants?
Everything plateaus over time. After all, there are only so many pets the average person can maintain, and not every average person is a pet lover. That said, it is an expanding market.
And yes, there are similar emotional drivers when it comes to shopping for pets and kids. In fact, many people like their pets more than their kids, or opt to have pets rather than kids. But misanthropic households aside, there are parallels between the evolution of the “children’s” market and the evolution of the pet sector.
For example, adolescence — itself sort of an invention of the 20th century — now extends from ages 12 to somewhere in your middle twenties or beyond, as parents have redefined their responsibilities from preparing their child for the world to preparing the world for their child.
Three generations ago dogs often ate table scraps, now they have customized bongs for their organic, CBD-infuse, mood modifiers and quinoa-Wagyu beef treats between meals. The free market has anthropomorphized animals to the point that owners actually think of them as “people” who should have the same rights as people do.
The other day I was in a Starbucks and a woman sat her (wet) dog down on the counter in front of the register while she signed over her second mortgage to buy a latte. When the barista objected to the toy poodle’s posterior being co-located on a space where people were about to pick up food and drinks the irate customer responded, “You wouldn’t want me to set him on the ground would you?”
Of course, the simple answer was, “yes,” but that’s another story.
In a world like this, while that plateau exists, it is too far away for us to see it clearly yet.
The spending on pets is so similar to spending on kids that many kids products companies think of pet products as a natural extension. After all, once products pass all of the regulatory and quality hurdles required for kids, they are good to go with pets. Personally, I can confidently forecast a sizable uptick in my pet spending this year after adding a perfect senior rescue dog to my pack a couple of months ago!
As long as people are waiting longer in life to have children, the spending on “fur babies” will continue. Income that was spent by previous generations for the expenses of raising children is now being passed along to today’s lucky pets.
On a less transactional level, pets allow people to connect. Both through story-telling be it via social media or co-workers around the lunch table, as well as in person at parks, parades, and pet-friendly establishments. Humans are social creatures and with the world becoming more and more digital, pets are a connection point that allows us to relate to the outside world – and even feel connected to something at times when we might feel isolated. America’s lovefest with its pets won’t be slowing any time soon, and I think that is a very good thing for society.
To my knowledge, at least nobody is bribing college admissions officers to gain acceptance for their dogs and cats. Beyond that, pet owners (or “pet parents,” as we are now known) are remarkably indulgent consumers.
Some of the rapid growth is due to demographics — “empty nester” Boomers who treat their pets like the children who no longer live at home, and those children who are forming households but not ready to have their own kids. And some of the growth comes from clever marketing segmentation: There are more varieties of dog food than what you’ll find in the cereal aisle.
Somebody could write a treatise about our tendency to humanize our pets and its impact on consumer spending. At this point, there is no end in sight.
I remember reading a survey that said women spend more time choosing a gift for their pet than they do for their spouse or significant other. I think that about says it all. In some ways pets are the new kids.
As the number of pet owners increases the purchases of pet products will increase. As the disposable income of pet owners increases, the purchases of pet products will increase. At some point these conditions will plateau but, in the short term, sales of pet products will increase.
Pet people will continue to spend on the basics as well as new(er) products like automatic litter boxes, electronics, CBD and other wellness products.
There’s certainly no evidence suggesting a plateau is coming. Rather, in the U.S., as household size continues to shrink I’d expect pet ownership to continue to rise. With fewer kids, the natural human tendency to nurture and be engaged with another being turns to pets.
This shift right now even seems to be an unusual point in society where shopping tendencies reflect a very long-range shift. Evolving family and society reduced the need to have many children and increased the reasons not to. It’s kind of a stunning place in the history of mankind.
While claims of humanity changing were made about digital, it turns out the place we see it truly happening is the increase in pet ownership. Great irony here as well as great opportunity.
Based on the last census we have more unmarried adult Americans than married. Many have figured out pets are better than children or spouses. Unconditional love. Cheaper. Much less subject to addictions. Very forgiving. And often very cute. How often on social media does a pet owner identify themselves as a mom or dad? Look the cross section of pet foods from vegetarian, to letting you match your meal to theirs. Look at the pet hotels that pet super stores are opening. Or the troubles food merchants are having dealing with health regulations and “emotional support” animals.
This is great for virtually every category of retailer, as the pet segment transcends food, apparel, etc. Innovative partnerships could arise from building out this market.
We always hear about “Pet Parents,” but several years ago I conducted a groundbreaking research study that identified three distinct segments within the high-bonded pet owner macro-segment — and of the three, Pet Parents are NOT the most doting or the ones who spend the most money on their pets. No doubt spending on pets will continue to increase, driven by both demand and supply: 1) consumer need/desire to provide for their pets, 2) more and better premium options for food, services, and accessories in the marketplace, and 3) advances in both traditional and non-traditional medical treatment for companion animals, and 4) the broader availability of consumer knowledge of all of the above via social media. It is definitely here to stay.
We have a small dog who is absolutely spoiled. I don’t think we are different from most families with a pet. The pet brings total joy and we pay that back by giving them the best life we can.