BY DAVID LUMMIS
Like people, consumer packaged goods (CPG) markets sel- dom change overnight, even figuratively speaking, and the U.S. pet market is no exception. Many of the foremost rends shaping the market—internet, consolidation, natu- ral/organic—have been in force for quite some time. To a decades-long pet industry observer like me, they can, on
their face, even seem old hat. Why, then, give them additional air-time? What makes these trends worth examining from the point of
view of right now is that—after one or five or even 10 years—they’re
still going strong, with all that signals about consumers and retailers
and product makers and marketers.
What renders these trends all the more noteworthy is their new
intensity, longevity notwithstanding. Few would argue that the U.S.
pet market, with its tenure and relatively slow-growth pet popula-
tion, has long passed the point where most CPG markets would be
considered mature. Yet, to the tune of billions of add-on dollars per
year, growth remains robust relative to markets of comparable size
and age. Pet has revealed itself to be a business like no other, a slew
of products and services that continues to build out in venues that
are increasingly intertwining, including online. There’s a no-holds-
barred emotional component not unlike that underpinning the myr-
iad products and services composing human child care, some more
essential than others and meeting every conceivable need at every
possible price point.
With future market growth primarily marketer-driven, the stakes
behind each retail, strategic or consumer thrust are greater than ever
as industry players increasingly seek incremental growth at one another’s expense. Meanwhile, pet owners want it all—readily attainable products and services that are at once top quality and competitively priced. The upshot is a U.S. pet market that is, as of right now,
evolving along the following lines:
Virtual reality: Pet market observers have been touting the prospects of the internet so loudly and so long that another shout out
might seem like crying wolf. But any way you slice it, e-commerce
is now truly coming into its own in the pet market. With Walmart
(plus Jet) now going head-on against Amazon and PetSmart (plus
Pet360 and Chewy.com) and Petco (plus Drs. Foster & Smith and
PetCoach) also pulling out the stops, internet sales are projected to
hopscotch to 13 percent of total pet product sales in 2017 and to as
much as one-quarter by 2021.
Between a brick and a hard place: With a huge selection of everything pet available online, brick-and-mortar pet retailers are feeling the squeeze, and none have the ability of a Walmart or PetSmart
to counterattack online. Where does this leave the independent pet
retailer? For most, the “pet specialty only” strategy is assuming a
deeper level of seriousness, as is folding in services both in-store
(think grooming and boarding) and online (think online ordering
and in-store pickup, or home delivery). Bright spots for independents
Longstanding trends in the pet industry continue to evolve and impact the market.
Top Trends Assume New Intensity
ABOVE: DAVID LUMMIS, LEAD PET-MARKET ANALYST FOR PACKAGED FACTS
BELOW: MILLENNIALS REPRESEN T ONE
OF THE FASTEST-GROWING GROUPS OF
PET OWNERS, AND THIS GENERATION IS
ALSO MORE CONCENTRATED IN URBAN
AREAS. THE URBAN PET POPULATION
REPRESENTS AN AREA OF GROWTH IN
THE MARKET, ACCORDING TO LUMMIS.