Three executives from successful pet store chains discuss the role that the independent retailers play in brand building, and how ecommerce is affecting the dynamics between retailers and suppliers.
(L-R) Michael DiTullio, Bob Hartzell & Michael Levy
The pet industry has changed considerably over the past few years, and will continue to do so with the growth of ecommerce and natural grocery. Not too long ago, some larger pet food manufacturers and private-equity investors began predicting that many independent pet retailers would be gone within five years as the business moves online.
While it is true that ecommerce retailers are growing, many independents are growing too. There is room for both, but only if manufacturers step up and realize that independents play a crucial role in identifying trends and introducing new products to market.
Healthy dog and cat products make up the fastest growing part of our industry, and independent pet retailers and chains have been driving much of this growth with personal recommendations to consumers. When pet owners look for products like raw, gluten-free, all-natural and organic food and treats, many choose independent pet stores over the big chains because they trust them and value their recommendations. Historically, independents have introduced and endorsed to market most of the highest quality brands that are established today. However, many of the brands that were built years ago by independents have since been moved to Petco and PetSmart, and some have even crossed into the grocery and mass channel. Given this evolution, successful independent pet specialty retailers are paving the way for emerging brands.
Many manufacturers rely on independents as a way to get recommendations, test new products and get customer feedback. Independent-only manufacturers such as Champion, Fromm and Firstmate are great examples of companies that understand this and, as a result, have some of the highest growth rates in the industry.
This past March, a group of independent pet specialty retail chains representing over 300 stores met at Global Pet Expo to discuss the ongoing changes in our industry. The group met againt at SuperZoo, and the number of stores represented grew to more than 700. They discussed many of the recent changes in the industry, along with how manufacturers and distributors were incorporating the internet into their growth strategy.
An important part of the discussion centered on what manufacturers were doing to provide a level playing field. The consensus was that a number of the manufacturers with MAP or IMAP policies were not enforcing them. Additionally, some were allowing a greater degree of discounting, which had encouraged ecommerce to offer predatory pricing. On a very positive note, a number of examples of manufacturers who were doing a good job were highlighted too. Many of the retailers at the meeting said that they had made the decision to only support manufacturers who truly valued them by providing a truly level playing field.
While there was no specific plan among the independents to come to a consensus to enforce MAPs or which manufacturers to support, it was apparent that these successful retailers know which companies are supporting them, and that the support needs to be mutual. All agreed to meet again at Global Pet Expo in March, where the group’s store count is expected to grow to well over 1,000. It is also clear that independents will continue to be industry leaders by continuing to identify trends, work with principled manufacturers and help to lead the way in innovation in the pet industry.
Michael DiTullio is president of Especially for Pets, a seven-store retail chain based in Newton, Mass.
Bob Hartzell is president and CEO of Chuck & Don's, a Mahtomedi, Minn.-based pet specialty chain that operates 35 locations in Minnesota, Colorado and Wisconsin.
Michael Levy is co-owner of Oakland, Calif.-based Pet Food Express, which operates 60 stores in California.