Going the Extra Mile
Katie's Pet Depot has thrived in the face of competition from big-box and Internet-based retailers by providing best-in-class services to pet owners in the local community.
Katie’s Pet Depot in North Brunswick, N.J., is a flourishing business today simply because of the dissatisfaction owners Vincent and Linda Sheehan had with the existing pet stores in the market. As the owners of dogs, cats, fish and a horse, the Sheehans craved a better shopping experience than what was available from the specialty pet stores and big-box outlets in their area, so they decided to take matters into their own hands.
“We saw that the big-boxes weren’t providing an acceptable level of service or offering specialized products, and the independents weren’t well maintained and didn’t have a wide selection of merchandise,” says Vincent Sheehan. “We decided to open our own store, and in 2006, we started looking at locations and buildings.”
Drawing on their combined backgrounds in the accounting, retail and financial services industries—not to mention their love of animals—the Sheehans moved forward and made their dream a reality. “I am a CPA with experience in retail and retail management, and my wife was a systems analyst in the financial industry,” Sheehan says. “We secured financing and went forward as a Pet Depot franchisee; and while there are benefits in being part of a franchise, in many respects, we operate like an independent.”
Katie’s Pet Depot opened its doors in 2008 and occupies 5,800 square feet in a small strip mall. It is a full line pet store offering fish, birds, reptiles and small animals—including gerbils and chinchillas—along with food, supplies and services, such as grooming. The store doesn’t sell dogs or cats, but it does facilitate adoptions with special weekend events.
While, on the surface, Katie’s Pet Depot may look like the thousands of other pet stores on Main Streets across the country, once inside, it becomes clear that the Sheehans have set their business apart by consistently delivering best-in-class service to customers. In fact, it was this high level of service that earned the store the 2015 Global Pet Expo Retailer Excellence Award for Multi-Service Excellence. The annual award, presented through a partnership between Pet Business magazine and the organizers of Global Pet Expo—the largest annual trade show in the pet industry—recognizes a store that demonstrates excellence in delivering a broad spectrum of services.
“We were very flattered to receive this award because it is so representative of how we work to run our business by offering a wide variety of products in a way that represents quality and top-level service,” says Sheehan.
While there are many facets to running a top-notch pet store, Sheehan believes that there are three key components that separate Katie’s from the rest of the pack. “The first thing is our laser focus on customer service, and it is the most important thing we do in the store,” he says. “The second is that we specialize in a more natural, holistic approach and offer premium products, and we do very little in the grocery genre.
“The third thing we offer is the in-depth product knowledge that shows our customers that we are more than just a retailer, we are advisors as to how they can care for their animals.”
This all adds up to make Katie’s Pet Depot a business that is always willing to go the extra mile to deliver for its customers—both figuratively and literally. “If you are sick in bed and running out of dog food, you can call and tell us what you want, and we will bring it to you,” says Sheehan. “It seems like every week we have someone in a situation where they need help, and we are there for them. We don’t charge for the service of helping our customers.”
According to Sheehan, this approach has paid off by cultivating a loyal customer base for his store. “We can’t create a need, but we can fulfill one better than our competitors,” he says. “And we find that customers not only buy from us, but will go out of their way to buy from us.”
Providing a high level of customer service may be the lynchpin of Katie’s success, but keeping the doors open requires paying attention to and dealing with customer behavior, the latest trends in the market, and sources of competition. And when it comes to competition, Sheehan sees two major threats to independent pet retailers.
“The two major channels we compete with are pet store chains and the Internet,” says Sheehan. “Big supermarkets can be your best friend and be a traffic builder, but if they sell some of the stuff you are selling, that is a problem.
“You have to buy around your competition, and that is hard because there are very few products that are exclusive to the independent channel.”
Sheehan sees Internet retailers as a particularly difficult threat because their low cost of doing business allows them to sell products at discounted prices. That results in the practice of showrooming, where customers spend time at a brick-and-mortar store getting all of the information about products, only to purchase them online. Sheehan uses aquariums as an example.
“Fish tanks are a commodity, and Internet retailers and some big-box stores like PetSmart sell them at the same price we buy them for,” he says. “And that’s not counting all of the used fish tanks you can buy off of Craigslist.
“We spend a half hour and put together an aquarium set for customers and then they buy it on the Internet. Then they have a problem with the filter and come to our store and ask us how to use it, and we help them.”
While this type of dynamic can be quite frustrating for a brick-and-mortar retailer, Sheehan chooses to approach the situation as a business opportunity. “Of course we help them because it is the right thing to do, and we want them to come back for additional equipment, supplies and fish…but you want to tell them to go back to where they bought it from and ask them how to make it work,” he says.
However, the Internet is not just a source of competition for Katie’s Pet Depot. In fact, when it comes to advertising his business, Sheehan is a big fan of e-mail marketing. He does one to two email blasts each week to the 6,000 customers in his store’s database and pays attention to frequency, monetary and recency metrics.
“We promote what is new at the store, store specials, vet clinic updates, notices of adoption weekends and new products in the market, and keep them updated,” he says. “We pay particular attention to frequency and monetary levels, and monitor customer history.”
Sheehan complements this digital approach to marketing with more-traditional advertising methods. “We use coupon magazines like Clipper and coupon inserts in weekly newspapers and some local radio,” he says. “We offer specials like getting money back if you spend a certain amount, receive a percentage of an item or something else to attract customers to visit the store.”
Challenges on the Horizon
Looking to the future, Sheehan believes that while the pet industry in general will continue to grow, some segments of the pet specialty channel face significant challenges ahead. A mix of political initiatives, changing consumer attitudes and the cost of doing business in certain areas is affecting the economic viability of independent retailers, he says.
“Geographical areas like the Northeast and the West Coast have very strong animal rights advocates and there is a growing general stigma about selling, buying and keeping animals and the long term future in some of those areas isn’t very bright,” says Sheehan. “Availability of occupancy in places like New Jersey and California is getting more and more expensive for independents.
“Internet operations don’t have those type of costs, and the big-box stores can get much lower rates because of their leverage, but triple net taxes, high leases and rent costs have gotten out of hand.”
To navigate through these challenges, Sheehan expects to lean on the strengths that have driven success for Katie’s Pet Depot so far.
“To be a successful, independent, family-owned business, you need to focus on the community that you live in and do business in, and do right by it,” he says.