A Healthy Debate
While health and wellness products clearly represent a great growth opportunity for pet specialty retailers, the jury is still out on the best way to make the most of this burgeoning market.
Imagine if every time you walked into your local Walgreens, CVS or Walmart, you had to pick through an odd assortment of hair sprays and deodorants to find your multi-vitamins. And then, with your vitamins in hand, you had to comb the aisles looking for the family-sized bottle of ibuprofen that is on sale, only to find it tucked in between a rack of magazines and a display of deeply-discounted holiday candy. It simply would not make sense.
Instead, these retailers use a much more logical strategy, co-locating like-products in sections to make them easy to find.
Pet specialty retailers, of course, practice this strategy to some degree as well, putting like-items together on shelves. But most do not go so far as to segregate health-related products in the way a drug store chain or a mass merchandiser would. Until recently, there probably were not enough products on the market to call for such a strategy anyway.
But today the market is rife with products designed to treat and prevent a myriad of health conditions and generally improve pets’ health. The assortment of items available range from oral-care and skin-and-coat treatments to dietary supplements, functional foods, treats and weight-management products. Some in the industry assert that there is enough supply—not to mention, demand—in these categories to warrant a far more extensive and unified approach to promoting and merchandising these products.
It is an idea whose time has come, say some in the industry who see designated healthcare departments as a logical next step in the evolution of pet specialty retail. But others believe that pet owners and retailers would be better served by short-lived merchandising events that raise consumer awareness, as opposed to permanent cross-merchandising displays or departments boasting a healthcare theme.
Most everyone, however, is on the same page about one thing: products that fall into this ever-broadening health and wellness category are playing an increasingly important role in the overall pet market.
David Lummis, senior market analyst for Packaged Facts, a market research company, says health and wellness products are growing at about double the rate of other pet products. “Health product is a pretty broad term, but really anything health-related on the market is really on firm footing in my opinion,” he says.
The interest in all things health-related is coming from many angles. The category is being driven by consumer demand for solutions to common problems, as well as by forward-thinking manufacturers that design products pet owners do not even know they need until they are available. These companies are tapping into consumers’ growing willingness to take a more proactive approach to caring for their pets’ health, and hopefully avoid costly vet visits down the road. The end result is more business for independent pet stores, which are often the go-to destination for information and guidance on caring for pets and treating a wide range of minor ailments.
Retailers are also finding an additional revenue stream opening up to them as products that used to be available only or primarily through veterinarians become sellable in retail channels. Brands such as Bayer, Sergeant’s and Zymox have entered the pet specialty retail market, rather than focusing solely on the veterinary channel. For instance, Bayer’s Advantage II and K9 Advantix II were veterinary-exclusive products until recently and are now available in retail outlets. Pet King Brands has also recently made its Zymox brand of ear and skin care veterinary products available over the counter.
Lummis expects that this influx of tried-and-true products with veterinary history behind them will encourage pet specialty retailers to invest more heavily in those departments, and perhaps even create little store-within-a-store, drug-store-type environments.
So, this growing emphasis on healthcare related products may be pushing retailers into uncharted territory. The question is, are retailers ready to step up?
“It’s a puzzlement why it has been a little slow to catch on,” Lummis adds. “You already have plenty of products to choose from…I just don’t see those departments as fully established yet.”
Some industry observers contend that retailers risk letting a major opportunity slip through their fingers by not playing up the strength of health-related products. Corralling them into a unified section, they theorize, would help drive sales across all the categories in the health arena.
“I’m talking about creating the feeling that you are walking into a health department, as opposed to down an aisle where you have a bunch of stuff thrown in,” Lummis says.
This strategy, however, should be more than just a merchandising ploy. To become a go-to destination for health and wellness products, retailers will also want to be as knowledgeable as possible on the products they sell, and what they actually can and cannot do for pet owners and their pets.
“It’s not just about the merchandising and appearance; it’s about having someone there to [interact and follow up with customers],” says Lummis. “Really, the smaller the store, the more likely it is to have the owner in the store, and [that owner] can become the go-to person for information—almost like a pharmacist.”
According to Gary Ervick, executive vice president for Quaker Pet Products (QPG), this is a role that is a particularly good fit for independent retailers, which depend heavily on the relationships that are built when they provide valuable guidance to customers.
“You’re doing more than selling products,” he says. “You’re creating a unique bond between the store and the pet parent that goes beyond a transactional relationship.”
Needs of the Few and Many
Under the health and wellness umbrella, lifestage products, in particular, are gaining traction, with products for senior pets playing a starring role. “We have an important baby boomer contingent in the pet market who is increasingly aware of their own health and aging, and we also have an aging pet population, because pets are living longer, particularly because of the better health products and service they are receiving,” Lummis says.
Many manufacturers are prepared to meet this demand head on, having developed products and established brands specifically designed to address the needs of this growing population. QPG, for example, launched its Silver Tails line in September. Silver Tails is a broad line of products designed specifically for senior pets, including a hand-held massager, a dental care system, bamboo-charcoal pet bed covers and mats, magnetic therapy collars, support harnesses, and age-appropriate chew toys and treats. The launch was a direct response to data the company collected on the senior pet population, which Ervick says is at about 80 million pets— 48 percent of the overall pet population.
He says retailers should respond by creating senior pet departments—whether that means a display, a kiosk or something more elaborate—and then aggressively merchandise and promote the fact that they are committed to improving and possibly helping to extend the lives of their customers’ senior pets.
Still, in a $50-billion industry, there is certainly room for dissenting opinions on how retailers and manufacturers merchandise and promote product. Not every manufacturer is keen on the idea of designated health product sections, at least not all-encompassing, soup-to-nuts departments that cross-promote anything and everything that has a health-related claim on its label.
David Everson, vice president of marketing for pet food manufacturer Natura Pet Products, which produces brands such as California Natural, EVO and Innova, says food and nutrition certainly play a major role both in the prevention and treatment of health problems, particularly as it relates to weight issues and allergies. Still, he says, retailers should continue to segregate food in a section of its own.
He adds that while a store may choose to have a skin and coat section, for example, he wouldn’t advise cross-merchandising a food designed to promote skin and coat health with a supplement or topical treatment designed for the same purpose. Nor does he recommend that stores set up a permanent senior or healthcare display.
“If we are getting into different options to configure a store, what we’ve learned is that trip drivers for this consumer are food and, on the cat side, litter,” Everson says. “Once these consumers are in the store, they may seek other options. Based on the data I’ve seen, I think you’d still keep your foods and litters apart.”
On the other hand, he does see the value in marketing and merchandising strategies designed to draw customers’ attention to the breadth of product available to meet various needs.
“We do recommend life-stage merchandising—even crossing categories for a merchandising event, for example, a puppy endcap that would include items you’d need to get your puppy off to a healthy start,” Everson says. “Similarly, I’d be very supportive of a senior endcap, including nutrition [products]. What that does is help consumers see it in the consideration set.”
Everson warns, however, that when it comes to selling health remedies and treatments, it is important to know when to steer customers out the door and to their veterinarian. Retailers, explains Everson, need to define some clear boundaries to avoid misrepresenting the limits of their knowledge. Understanding where to draw the line between being helpful and overstepping that line remains key.
“Consumers now have more information and therefore feel empowered to diagnose and treat—in some cases that may be appropriate and in many cases the best thing they can do is see a veterinarian,” he says, adding that retailers may not be aware of all the treatment options that are only available through veterinarians.
Dr. L. Phillips Brown, vice president of marketing and regulatory affairs at Nutri-Vet—a supplier of animal supplements and medical supplies—agrees that retailers will have to be responsible and reward customers’ trust in them by being well informed and using common sense.
“If somebody comes in saying that their dog has had diarrhea for a week, then the retailer needs to say, ‘I think you should see a veterinarian,’” he says. “Retailers should develop relationships with vets in their area, so they are not giving bad information.”
Meanwhile, as health-related products continue to flood the market, retailers will be called upon to serve as intermediaries between manufacturers and pet owners. Store employees are on the front lines, delivering important product information face to face and helping guide consumers’ purchasing decisions. It is a role they should not be afraid to embrace, say many manufacturers.
“As a manufacturer, I get frustrated because there is a big gap between the end purchaser and me—so how do I know that my message is getting to that end purchaser?” Brown says. “This bridge, this educational trail, sometimes gets real thin.”
Retailers, he says, need to be that bridge. Brown adds that this is especially important in light of the fact that there is so much information floating around on the Internet—some factual, some not so much.
“The web is like a rumor mill,” he says. “The web is good and bad. The retailer’s job is to translate that [information].”
Another way retailers can help customers sort out their options, he adds, is by not giving them too many. Brown says retailers should opt to keep the assortment lean and mean.
“I’m seeing what I call SKU rationalization,” he says. “Instead of having five products that are joint-care products, they narrow it to two or three. That reduces the confusion for the shopper.”
Of course, independent pet specialty retailers have to decide for themselves the best way to capitalize on the opportunities presented by the growth of health-care related categories. Many will embrace some version of the store-within-a-store concept to merchandise products that fall under the widening umbrella of health and wellness products, complete with department-specific signage and much fanfare. Others will choose to continue merchandising products pretty much as they do now, with products grouped by categories far less broad than “health and wellness.” But however retailers choose to handle these products, the role they play in this segment of the market cannot really be understated.
“Pet owners should look at their animals holistically—you bathe them, you check their ears, you check their eyes, and give them good food and supplements,” says Brown. “And that’s what a retailer needs to deliver—a big cloud of wellness that surrounds the pet.”