One veteran independent pet specialty retailer reveals the challenges that keep him up at night, as well as how his store's approach to customer service helps him sleep easier.
Being an independent retailer in the pet industry is not for the faint of heart.
Competition for customer dollars has never been more brutal, with local independents, big-box stores, category killers like Walmart, grocery stores and Internet retailers all trying to carve out their slice of the pet pie. It is also a struggle to run a business while managing inventory, staff, regulations and taxes, and ever-changing customer demands.
It is enough to keep a retailer up at night, sweating the details of a business that can have its ups and downs, not to mention what might be lurking around the bend.
Rick Preuss, owner of Preuss Pets in Lansing, Mich., is no stranger to the challenges that come with running a retail pet business. He was introduced to this world at the age of five when his family opened a fish shop in the backroom of a house in Troutville, Pa., with his mother Lennah Jean Preuss at the helm.
“My mother navigated hard times, made tough decisions and ran this business not only with her mind but also with her passion,” says Preuss. “We started the store with every dime we could scrape up and borrow, and just about every dollar we made went back into inventory—and we were visiting our distributor every other day to replenish stock.”
Preuss credits his mother—who eventually built up the backroom aquatics business into a full-blown pet store called Noah’s Ark, before moving to Lansing to open Preuss Animal House in 1982—with much of the store’s success. Her philosophy toward customer service and staff, in fact, still serves as the store’s operational foundation today.
“Mom’s ethics and ability to connect with customers to find out how we can help them transferred through time and put us where we are today,” says Preuss. “She had a love of people more so than a love of pets—even though there is correlation between the two—and we still embrace that fundamental principle.”
Today, the main thing that has Preuss concerned revolves around customer service, as he continues to feel pressure to deliver the best possible experience to the store’s shoppers.
“If there is one thing that keeps me from sleeping, it is the concern that I’m not doing enough for our customers and not treating them the best way we can,” he says.
To deliver the type of service that helps him sleep easier, Preuss employs 65 people, including 12 managers, to run the sprawling full-line pet store, including its comprehensive aquatic department—the cornerstone of the business. Like many independent pet stores, Preuss Pets is very much a family operation, with Rick serving as president, and his wife Debbie and his 25-year-old daughter Kirbay as store managers. His brother Rob was the mastermind behind the layout, design and décor of the 18,000-square-foot retail space.
According to Preuss, the key to building relationships with customers and providing the experience that creates a loyal clientele has been the dedication, enthusiasm, energy and commitment of the store’s employees, who embrace the culture the Preuss’ have worked hard to build. “Our staff understands who we are, what we’re about, our principles and stand behind them,” says Preuss. “We find that most of the time they want to be part of that energy.”
The ability to provide customers with an education on proper pet care has been a particularly important part of the staff’s role, as it keeps Preuss Pets a relevant player in an increasingly crowded marketplace. “Customers come into a store, and they don’t know what it takes to keep an animal alive and doing well—if they just buy the animal [without the proper knowledge], their expectations are lowered,” says Preuss. “On the other hand, if customers [are informed] their expectations are expanded. That is where our education efforts come into play.
“It is our job to create relevance in an ever-changing marketplace, and we do a pretty good job at it by understanding that we are not going to service everybody, but we can provide an environment where customers can learn, grow and embark on a journey to be more successful with their pets.”
Preuss recognizes and accepts the fact that he has some tough competition, but he views it as a fact of business life and looks for the opportunities it presents. For example, since the chains and grocery stores focus on top-selling, namebrand SKUs, Preuss sees an opportunity for independents to fill a void by filling in the gap in big-box stores’ assortments.
“Chain retailers will eliminate some serious products because the numbers aren’t high enough and will just stock generic products,” he says. “While the demand isn’t as high, we will offer those products, and that gives us an edge in that category.”
Despite the fact that other local independent pet stores are often working with these same products, Preuss does not believe that such overlap saps the mom-and-pops from what makes them individually unique. “We have about 70-80,000 square feet of local independent competition, and even though we sell a lot of the same products, we are distinctly different stores and attract different customers,” he says.
When it comes to the growing impact of Internet sales on the pet specialty channel, Preuss views online retailing as a competitive mixed bag. “Online will play a much bigger part of the marketplace for some types of merchandise, but with respect to live-animal purchases, consumers aren’t going to feel confident going down that avenue,” adds Preuss, who says that more than half of the business’ revenue is in aquatics supplies, live fish, coral and related offsite services.
As for the practice of customer “showcasing,” Preuss is not overly concerned. While some shoppers come in to get information then purchase the products somewhere else, he feels that once they experience his staff’s energy and enthusiasm and absorb the store’s ambiance, they will return.
“Of course showcasing happens, but at the same time, if [customers] feel the energy in our store and they understand what we are all about and the kind of service and benefits we deliver, they are going to think twice about leaving,” says Preuss.
“I can’t tell you the number of times I’ve heard customers say that they want to buy [products] at our store, and maybe, we aren’t dead-on in price, but we make them feel comfortable spending the money with us.”
One of the biggest challenges in providing the level of service that inspires such customer loyalty is retaining staff members long enough to consistently deliver. High employee turnover is a given in the retail industry, yet Preuss Pets enjoys a relatively high retention rate, with the average part-time employee’s tenure coming it at around two years.
Kirbay points out that many of the part-time employees are college students majoring in aquarium science or something animal related, so employment at Preuss is not only a job, but a practical learning experience upon which they can build their careers. In addition, Preuss Pets considers staff as an extended family and treats them as such.
“Students discover that Preuss is one of the rare places in Michigan where they will actually be able to work hands on with aquatic systems and pets, and also learn basic customer service theory that they can use as a stepping stone to further their careers,” says Kirbay. “Also, our college students tell us that since they are away from home in a kind of foreign place, it is nice and a comfort to be able work in a store where they feel like they are part of a family.”
Surviving and Thriving
Economic downturns are tough for all retailers and can affect independents especially hard. However, several years ago, Preuss Pets was challenged with a one-two punch.
Just as the market crashed, Preuss was notified that the major road in front of the store entrance was going to be torn up for an eight-month storm sewer project that was great for the community and environment, but bad for the merchants affected.
As an environmentalist, Preuss recognized that even though the construction would hurt his business and was an inconvenience, it was a necessary project. He took positive steps to mitigate the liability.
He posted large billboards on the sides of his building trumpeting the value of the project, and utilized an old utility bread truck with arrows painted on the sides to promote the store and direct customers its store entrance. He also partnered with the local “Support Grand River” organization.
“One of the things we did was to participate in a parade, and we gave some local kids who were in the parade T-shirts to wear with the motto ‘1.6 Billion Gallons.’ Everyone who read the slogan wanted to know what it stood for, and it resulted in positive attitudes and increased awareness of the project and our store,” says Preuss.
The retailer has also been able to buck downward trends in categories known to be hit the hardest during the recession. For example, Preuss has not suffered any real decrease in the small animal and bird categories. In a pecking order or all the departments, aquatics has remained on top of the heap, representing the store’s major draw, while small animal, reptiles and birds are all on a similar financial standing, followed by dog and cat supplies.
“Last year, the bird department showed an increase, and the small animal category was fairly neutral,” say Preuss.
Preuss feels that part of the reason for the success of these departments is the fact that each is like its own store, with distinct themes and specialized, dedicated staff members.
“You won’t have passionate, interested and excited employees if they can’t exercise [their own] passions, and that means keeping them in a department,” says Preuss. “Having an employee that is a jack of all trades dilutes the purpose.”
Even though Preuss Pets posted lower sales during the recession, the weak economy never jeopardized the integrity of the business. In fact, Preuss points out that this past winter’s power outage and resulting fish fatalities was more costly then the losses caused by decreased customer demand.
Into the Crystal Ball
Even though legislation concerning the pet industry does not cost him any sleep, Preuss keeps current on what is happening with extreme animal rights activists especially as it relates to aquatics and other segments of the industry.
“It used to be that the only coral people saw were dead coral reefs on TV. Now, living coral in aquariums is common, and people have coral so healthy that it sometimes grows out of their fish tanks,” he says. “It makes no sense to outlaw marine animals and [prevent] responsible people from enjoying them.”
Looking at the industry as a whole and how it will hold up under mounting pressures—from live-animal sale bans to competition from Internet and mass retailers or grocers—Preuss predicts that the future of independent pet retailers will hinge on their commitment to the customer. If they can focus on making an unwavering commitment to their shoppers, he says, the bottom line will basically take care of itself.
“I hope that there is enough consciousness raising so retailers will provide true value to the consumer by focusing not so much on selling animals and goods but seeing the true opportunity in marketing successful relationships with pets,” he says. “That means [developing] a more compassionate-centered approach to pet care by not treating animals as a commodity.”
It is an approach that he says will also help inoculate the independent channel from the ever-growing competition from the outside.
“More and more companies are chasing after the dollar,” he says. “The more they do, [the more it will] contrast against genuinely compassion-focused retailing that keys in on what customers want and need.”