Handling the Holidays
The holiday selling season can be a boon to pet specialty stores, provided that retailers have the right merchandising and marketing plans in place to take advantage of shopper's yuletide cheer.
As the pet humanization trend has made our four-legged loved ones more prominent within the family unit, the holiday season has become the most wonderful time of the year for pet stores. Pet owners are increasingly including their companion animals in the yuletide gift-giving tradition, which represents a great opportunity for retailers to not only capture a significant share of holiday budgets, but also build brand recognition.
“During the holidays, not only current customers, but people in general, are in a shopping frenzy,” says Kim Lash, president of Pet Food Warehouse Limited, a retailer with locations in South Burlington and Shelburne, Vt. “The holidays are the best time to showcase your store and merchandise so the experience is mesmerizing and creates a stronger bond and loyalty with all who enter your business.”
However, success during the holiday season is not as simple as hanging a few strings of garland and displaying a handful of red and green toys or treats; it requires a well-crafted sales strategy that covers all facets of merchandising and marketing. To gain some perspective on the approach that pet stores are taking with their holiday planning, Pet Business recently conducted an online survey of specialty retailers, which covered everything from purchasing to promotions to markdowns. The results reveal that while there are some significant variations in certain aspects of retailers’ holiday strategies—particularly in the timing of holiday-merchandise orders—there are also a number of clear trends that are pervasive throughout the channel.
The biggest consistency gleaned from the survey was in the product categories that pet stores focus on during the holiday season. More than 70 percent of pet store owners and operators who participated in the survey said that they stock holiday-themed merchandise, with toys and treats at the top of most retailers’ list. In fact, 86 percent of respondents indicated that toys are a prominent part of their yuletide product mix, and 79 percent said that treats play a similarly important role.
Todd Ruppenthal, president of The Happy Husky Bakery in Evanston, Ill., places particular importance on the role that treats play in driving holiday register rings. “Because we’re a bakery, treats are always big for us,” he says. “For example, we make a gingerbread dog house that is hugely popular.”
Also popular for The Happy Husky Bakery are gift baskets that combine the store’s fresh-baked treats with items such as holiday-themed pet bowls. Priced anywhere from $25 to $40, Ruppenthal says that these baskets are a particular favorite among customers of his online store, because they are easy to ship to distant pet lovers.
Conversely, Ruppenthal says that while holiday-themed toys are good sellers in his brick-and-mortar store, they are not quite as popular with Internet shoppers because they tend to be impulse purchases. “Toys are always the first thing that most people think of when they are holiday shopping for a pet,” he says. “But they are often purchased almost as an afterthought while people are shopping for other things.”
The Best Effect
No matter which product categories a pet store decides to feature in its holiday merchandising plans, Hepzibah Rogers, managing member of Thunderpaws Canine Solutions a retail and dog-training business in Seguin, Texas, says that it is vital that the products truly reflect the retailer’s approach to high-quality pet care.
“We have found that the key to good holiday product sales is ensuring that each of the products is still representative of the quality that we offer in products year-round,” says Rogers. “At one time, we offered some lower-quality items that were holiday themed and found that they really did not sell. Just because it is red and green (or blue and white) doesn’t mean that the customers will lower their standards.”
Special holiday-themed merchandising displays also factor heavily in pet stores’ fourth-quarter plans, with more than 60 percent of surveyed retailers indicating that they use these displays to grab the attention of shoppers. Melanie Parks, owner of Wag N Tails in Coronado, Calif., says that she features holiday-themed displays prominently in her store. “It looks good when most of the holiday merchandise is focused in one area to make an impact,” she says. “I found that it is best to [place it] closest to the front entrance. We also really dress up the front window with holiday merchandise.”
Of course, even the most attractive holiday-themed displays and a great mix of gift-worthy products will produce little in the way of sales without foot traffic coming into the store. With this in mind, many pet stores utilize special in-store events to generate excitement within their aisles. For example, 46 percent of pet retailers surveyed said that they offer pet photos with Santa to draw in holiday shoppers.
Charitable events can be another great way to pique the interest of pet owners during the season—a point that is not lost on Claudia Loomis, vice president of Cherrybrook, which operates four stores in New Jersey. “We set up a Christmas wish tree in our stores,” she says. “We ask local shelter and rescue organizations what they need. They give us a list, and we make up paper ornaments for each items on the list, which customers can select from the tree. They purchase the items, and we place them in a decorated donation box.”
Almost as important to having a good strategy for driving fourth-quarter sales is planning for how to deal with any holiday merchandise that does not move off the shelf. Central to such planning is a markdown strategy.
While nearly half of the retailers Pet Business surveyed indicated that they do not mark products down until after Christmas, some actually start doing so as early as two weeks before. And then there are the retailers who do not mark down holiday merchandise at all (16 percent). However, the ability to resist markdowns will often depend on the type of products in question. Naturally, consumable items such as treats cannot simply be packed away until the next holiday season, but merchandise such as toys certainly can.
“My plan is not to put anything away, but I don’t feel that we have the margin to do big markdowns,” says Connie Kamedulski, owner of Animal Fair Pet Shop in Ridgefield, Conn. “I will mark down about 40 percent from Dec. 26 until Jan. 1, and then it vanishes. I will put it away until next year, rather than sell at or below cost. Sometimes we completely sell through, but not in 2013. I probably will not buy for 2014—I have plenty of good-quality Christmas-themed toys put away.”