Competing With Convenience
Brick-and-mortar pet retailers can effectively defend their market share from online competitors by making the shopping experience easier for customers.
Given that they are up against e-commerce giants offering rock-bottom pricing and the convenience of home delivery, it is easy to understand why many independent pet specialty retailers feel like they’re in a fight they simply cannot win.
Yet, while online shopping threatens to take a serious bite out of brick-and-mortar stores’ market share, traditional pet retailers do not have to just sit back and watch sales slip away. With some digital strategizing and support from partners in the industry, pet stores can protect their position as the No. 1 choice for pet-owning shoppers by stealing a page out of internet-based retailers’ playbook and beating them at their own game.
Of course, the reality is that most brick-and-mortar retailers cannot compete with the prices offered by online-only businesses, which may be operating at razor–thin or nonexistent margins. However, despite the perceived importance of price in e-commerce, research by Phillips Pet Food and Supplies found that cost is far from the only consideration. In fact, the company found that growth among SKUs that were discounted online was no stronger than that experienced by comparable SKUs with well-enforced MAP or iMAP policies.
“Although some see pricing as the most important online advantage, we simply didn’t see that in the numbers,” says Mike Lackman, chief digital and marketing officer at Phillips. “That tells us that convenience and selection are more important than price.”
While it does require some investment and a willingness to try out new business models, a number of pet specialty retailers are already proving that they can compete with the online outlets when it comes to convenience and selection. Step one, it seems, is looking at the internet as a source of endless opportunity to build business, rather than a necessary evil.
In a national survey by small business payroll services company SurePayroll, 42 percent of respondents said the internet really isn’t that important to their business. In some ways, they may be right—in-store, in-person service and interactions are one of brick-and-mortar retailers’ biggest advantages. As J. Nichole Smith, pet industry marketing expert, brand builder and author, points out, a retailer’s ability to let people touch and try products before they buy—not to mention offer valuable advice—is a huge part of building strong customer relationships.
However, by failing to invest in an online presence that represents the business well, storeowners may be missing a significant opportunity spark interest in their store and draw more customers through the door.
“Using a digital presence to get people into your store is a huge advantage,” Smith says. “If you can start building a relationship online and then meet them offline, you can solidify that relationship.”
Many retailers are familiar with the concept of showrooming—a practice where shoppers come into the store to browse products and get advice, then walk back out the door to look for a cheaper option online. However, the opposite phenomenon, known as webrooming—where shoppers research products online, then buy in-store—can work to retailers’ advantage. A 2015 study from PricewaterhouseCoopers found that webrooming is just as prevalent as showrooming, with 70 percent of those surveyed saying they browse online before making an in-person purchase and 68 percent reporting browsing in-store and buying online
Building Your Brand Online
In order to take advantage of this shopping behavior though, retailers have to make their digital presence as accessible and informative as possible. According to research conducted by Google with Ipsos Media CT and Sterling Brands, three out of four shoppers who found local store information helpful while searching online were more likely to visit the store in person. With this in mind, having information like pricing, availability of items, store location and business hours available and easy to find on the web can all help motivate in-store shopping trips.
The hardest part for most retailers is making sure the full breadth and depth of their product selection is represented online. For small businesses without personnel dedicated to maintaining a website, keeping that information up-to-date may seem impossible. However, there are a myriad of companies that offer technological solutions to retailers’ digital obstacles.
Liquid Retailer, for example, aims to help independent retailers compete better online by offering a range of e-commerce tools and services, including web design and development, local SEO and e-commerce administration. The company can help retailers use their existing POS systems to build an online product catalog without hours of manual data entry. Even if a retailer isn’t ready to start selling through their website yet, having stock online can provide a valuable resource for potential customers.
“The big key is that so many people use Google every day to make decisions about where they’re going to shop,” says Keegan Edwards, president of Liquid Retailer. “Visibility in the search engines and then having a good web presence is key, no matter whether you’re trying to build those orders online or build more foot traffic into your store.”
Pointy, a startup launched in 2014 by co-founders Mark Cummins and Charles Bibby, also aims to help retailers build online visibility. To this end, the company offers a device that plugs into a store’s barcode scanner, uploading product details and images to the store’s website as the products are scanned. Pointy then ensures that the store’s products rank highly in Google search results. This way, when someone nearby searches for a particular pet product, they find the retailer’s listing instead of just results from companies like Amazon or Chewy. The company’s founders say this strategy can help retailers attract customers to the store, where the business’ strengths can really shine.
“Your main strengths as a brick-and-mortar retailer are the experiences you create in store and your proximity to customers,” says Bibby. “By listing your products and appearing in local search results, you’re leveraging your online presence in a way that gets more customers into your on-street store.”
To the Pointy co-founders, it’s simply a matter of going where the consumers are. If all that a Google search for a particular dog food brand or toy brings up is the usual e-commerce giants, smaller retailers miss an opportunity to reach the customer.
“Having a web presence is a necessity for brick-and-mortar retailers,” Cummins says. “These days, when a consumer is looking for something, their first port of call is increasingly to search for it online rather than dropping into their local store.”
Building a comprehensive and informative website not only informs potential customers about what your store offers in terms of products and services, it also allows you to start building relationships. Smith advises retailers to look at their website as a way to turn newcomers into shoppers who are interested in buying before they even walk into the store.
“Creating a space that feels awesome and interesting and fun so that people are actively getting more and more excited about you, that is really key,” Smith says. “That person is much more likely to buy from you now or in the future.”
Going Door to Door
Investing in a strong digital presence can help retailers compete with e-commerce on the virtual front, but offering the most convenient shopping methods is also essential. By incorporating store pickup or delivery options into their business models, retailers can provide a good incentive for customers to stay loyal to their local pet store, rather than being lured away by online outlet’s discounts or free shipping.
“When these companies set up, they’re looking to poach customers from all over the country,” says Edwards. “Their hope is they can lose money in the short term by offering a big discount to steal that customer away and make them a long-term customer. For the independent retailer, it’s really an opportunity to protect their own backyard and a way to insulate themselves from the threat of e-commerce.”
While the logistics of adding these kinds of services might seem like an overwhelming task or a drain on resources, there are several ways that smaller retailers can ease into it. Edwards suggests starting out small with a store pickup option, which can help stores figure out a cost structure and system for taking orders and packing them up for the customer.
If that process goes well, the business can start evaluating what type of delivery model might work best. Far from being one size fits all, delivery services can be tailored to fit a store’s capabilities and meet its customers’ needs by asking the right questions beforehand. To start, Edwards suggests evaluating the geographic area in which delivery can be profitable, what delivery rates the store would need to charge and if it’s feasible to offer free delivery for orders over a certain amount.
Tailor your Approach
For some, the thought of building and maintaining an online ordering system might seem like too big an obstacle, discouraging storeowners from offering delivery service at all. However, Giovanni Senafe, owner of Bentley’s Pet Stuff, advises retailers to work with what they already have. Bentley’s recently acquired a delivery company and has complete online-ordering capabilities, but they started out by taking orders over the phone.
“People think they have to have the best website and all the products listed, but when we started you had to call in your order to the store,” Senafe says. “I would bet 40 to 50 percent of our customers still phone in their order or text it, even though we have a fully functioning website.”
Bentley’s has more than 60 locations in multiple states, but much smaller retailers can be successful in the delivery realm too. Senafe recommends offering customers that convenience in whatever way works for the business today.
“My best advice is to do what you can,” he says. “Don’t wait until you build that perfect system. In that time you’re losing the business that’s already there.”
For Furry Friends, Inc., a single-store retailer in Colorado Springs, Colo., delivery is the foundation of the business. Owner Debbie Brookham started the company in 2002 as a home delivery service operating out of a warehouse and opened a retail storefront five years ago. While she says having the right web platform has been a definite boon to the business, the overall priority for success in delivery is providing a consistent, positive experience.
“There is a personal customer experience the same as if they were walking through your door,” Brookham says. “The details are imperative.”
The customer experience element was also a major consideration for Bentley’s. Initially, the company contracted out its deliveries to a third party, but the lack of control over what experience that left the customers with led Senafe to decide to purchase a delivery company and bring that part of the process in-house.
“It would keep me up at night knowing that the final step in a transaction with a customer was in the hands of a third party that we had no control over,” Senafe says. “The biggest challenge was making sure that if a customer is receiving product from Bentley’s, if they have a question at that moment, it’s somebody that can actually answer them or help them.”
As Senafe realized, delivery is part of the customer’s shopping experience and can impact their perception of the business overall. While managing every step of the process can present a challenge, Brookham encourages retailers to view their deliveries as a branding and marketing opportunity.
“Pretend that your truck is a moving billboard all around town,” she says. “It can’t just be your car or an unmarked vehicle; let your community know that you offer home delivery.”
Having a vehicle out on the road with your store’s logo and information on it can quickly get the word out and build demand for your delivery service in the area. That publicity can be key in letting people know that there is a local, convenient alternative to e-commerce outlets.
“The people that are also using [online retailers], when they walk into the store and realize they can get delivery from a local store, they’re absolutely all in,” Brookham says, noting that people are often eager to support a local mom-and-pop business. “It’s easy to change them once they recognize you can do the same thing, only better.”
As with in-store interactions, independent retailers have the ability to add a personal touch to delivery services. Brookham says that her store’s online checkout has a special instructions box to allow shoppers to personalize their order or make specific requests, and Furry Friends includes a free bag of biscuits with every delivery. These personal elements can help convey the same sense of individual attention and care that a customer would receive when shopping in person.
The Power of Partners
Retailers aren’t the only ones adapting to better compete with online outlets—distributors are also finding ways to up their digital game and provide support and new opportunities for their retailer partners in the process. For example, with it’s recent acquisition of PetFlow, Phillips is developing resources to help stores offer a high-quality web experience and competitive delivery service, elements they say are key to retailers’ continued success.
“With nearly half of all households in the U.S. belonging to Amazon Prime, many shoppers have simply become accustomed to using the internet to have things delivered,” Lackman says. “Retailers without a solid online presence backed up by a competitive home delivery option will have a hard time staying relevant with the consumers for whom this is most important.”
Through the new Endless Aisles platform that Phillips is developing, retailers will be able to offer their customers an expanded selection of product options for immediate purchase along with delivery to their doorstep. The deliveries will arrive in a box clearly marked with the retailer’s name, and Phillips plans to help retailers market these services to bring online shoppers back to their local businesses.
While retailers can choose to connect their existing website with Endless Aisles, Phillips will also be offering solutions for stores that want to take advantage of the new platform but don’t yet have a website or haven’t built online shopping capabilities into their site.
With the help of technological tools and the kinds of resources Phillips is developing, Lackman says the company is optimistic about the opportunity brick-and-mortar stores have to challenge their online competition.
“Retailers who use their online presence to promote differentiated experiences in store, engage their consumers by responding quickly to emails and Facebook comments and actively promote their online presence as part of their shopping experience will see their websites make them money the same way they’ve been succeeding in stores for years,” says Lackman. “The winners here will answer their customers’ call for convenience while giving them reasons to come back into the physical store more often.”