Just about every pet retailer is trying to devise a winning strategy for engaging Millennials, but will doing so require them to move away from the brand equity they have worked so hard to build with shoppers over the years? The answer just might lie in the outcome of the newest initiative from Whole Foods.
The Austin, Texas-based chain, which operates more than 400 grocery stores in the U.S., Canada and the U.K., recently announced that it would be launching an entirely separate chain of stores aimed at Millennial shoppers—complete with a new name, a lower pricing structure and an emphasis on technology integration. It is the latest development in the company’s well-publicized struggle to recreate the meteoric growth it experienced in the not-so-distant past.
While there are some obvious differences between Whole Foods and the average independent pet store, they share enough similarities to make the grocery chain a good bellwether of the dynamics playing out in the pet specialty channel. For example, much like mom-and-pop pet shops, Whole Foods has seen its competitive advantage of focusing on natural and responsibly-sourced products erode over the past few years as mainstream retailers have increasingly incorporated the same types of fare onto their shelves.
At the same time, Whole Foods and independent pet retailers face a considerable challenge in shopper demographics. A declining population of Baby Boomers, whose disposable income has fueled the market for super-premium products, and the growing impact of Millennial shoppers, whose tighter wallets and unique shopping patterns are making retailers rethink their traditional approach to selling, present a problem for which it seems no one has the perfect solution.
Could Whole Foods’ plan to invest in developing a new chain of stores be the key to sparking a new era of growth for the company? Only time will tell; but Petco has had some success with this approach in the rollout of its small-format Unleashed by Petco stores, the growth of which has seemingly outpaced its big-box outlets.
Independent pet stores, however, need not—and frankly cannot—emulate Whole Foods’ strategy to court Millennial shoppers. For these retailers, a much better course would be to further refine their established retail brand to adapt to the changing marketplace.
Will it be easy? Of course not, but the fact is that the next big, difference-making product trend is out there, just waiting to explode, and adjustments can be made to better cater to convenience-minded and price-conscious Millennials. But the ability to take advantage of these opportunities will require vision and perseverance on the part of retailers—and that includes believing in the brand you worked so hard to create.