Just Keep Swimming
Three successful fish-focused independent pet retailers illustrate the many challenges and opportunities facing the aquatics category.
Ambition, drive and, perhaps most importantly, passion are all hallmarks of the entrepreneurial spirit that propels so many pet specialty retailers today—but none more so than those specializing in aquatics.
Yet, unfortunately, passion will not pay the bills.
Aquatics retailers have been facing a torrent of challenges since the start of the recession years ago. Recession-based woes converged with other market forces—for example, increasing online competition and young people’s waning interest in anything other than electronics—and the aquatics segment proved particularly vulnerable to the pressures.
“There was a collective, ‘Where did the hobby go?’” echoing throughout the industry, says Rick Preuss, co-owner of Preuss Pets in Lansing, Mich.
The upside is that, while no one is claiming that the aquatics industry is back to post-recession levels, business is rebounding for many of the retailers that are still left standing. It seems these entrepreneurs have put their talents to good use, leveraging their strong relationships with long-time customers and attracting new ones with dazzling displays.
Pet Business spoke to three such aquatics-focused retailers to find out how they have been able to overcome significant challenges over the past several years to keep their businesses swimming along.
Store At a Glance:
Size: 18,000 square feet of retail space
Years in Business: 32 years
Owner: Rick Preuss and family
Distinguishing Characteristics: Full-line store with four distinct environments for dogs and cats, reptiles, birds and fish. It also includes classrooms for customer education and birthday parties.
Rick Preuss, co-owner and general manager of Preuss Pets, in Lansing, Mich., describes his store as a microcosm of fun-ness, a step above what the average customer would expect from a pet retailer—however, in truth, it may be several steps up.
Preuss Pets offers an aesthetic experience matched by few in pet specialty retailing. Customers are entertained from the moment they are greeted by the waterfall near the front entryway, and throughout the time they spend winding their way past a koi-filled stream and through aisle after well-stocked aisle of pet supplies to the aquarium haven toward the rear of the store.
The store’s nature-rich décor is the actualization of what Preuss, along with his wife, daughter, brother and staff members, envisioned when they dreamed up the perfect pet store. “We thought, ‘What if we could create the ultimate pet shop?’ And, that’s what we set out to do,” he says, crediting his brother Rob for overseeing the shop’s incredible renovation on the eve of its twenty-fifth anniversary.
However, while the spectacle of it all may get the customer in the door, it is not the only thing that keeps them coming back. Preuss credits the store’s success at building a loyal customer base to hard work and the business’ commitment to supporting not only the aquatics hobbyists who shop there, but the hobby itself.
Preuss Pets is a full-line pet store, but its roots are in aquatics. Introduced to the hobby through his mother, Preuss was utterly enchanted by it at an early age. So, even today, while the store boasts a full spectrum of pet supplies and distinct sections that comprehensively meet the needs of bird, dog, cat and reptile lovers, aquatics makes up more than half of the business. “It’s a bit inverse of the typical full-line pet store,” Preuss says.
But being aquatics focused does not come easy. Overhead is high. The labor costs involved in maintaining a quarantine room, for example, or the onsite breeding of several specials are hefty.
Also, like many other aquatics retailers, Preuss has suffered the blow delivered by Internet marketers and manufacturers that sell directly to end-users, bypassing the middleman. Meanwhile, the retailer has been juggling the pressure of competing with big-box chains—which are designed to be as self-serve as possible—while trying to maintain high levels of customer service, even as the cost of quality labor climbs.
Even Mother Nature has conspired against the business. This year’s brutal winter did more than dump inch upon inch of snow on many U.S. regions; it caused power outages that killed customers’ fish, leaving them with inactive tanks that many neglected to repopulate.
On the other hand, unlike many of Preuss’s counterparts in the industry, the economy had a limited effect on business, he says. Preceding the start of the recession by about a year, the renovation actually may have come at a perfect time. The store’s lush ambiance and its ability to deliver a bit of joy to its customers during an otherwise bleak time seems to have worked in its favor. The store’s many displays continue to inspire customers to recreate some of that same aquatic magic in their own homes—even if it is on a much smaller scale.
“When people go through [tough] times, they are looking for something to calm their nerves,” Preuss says. “And small tanks can work just as well as large tanks, but owners still need just as much help and advice [to be successful].”
During lean economic years, the store also rode the momentum it had already been building, relying on a strong, loyal base of customers who came depend on Preuss Pets for not only livestock and supplies, but for the guidance necessary to be successful in the hobby.
“That’s the really beautiful thing about us,” he says. “We are on that journey with the customers as they grow, because we made those connections—strong connections—when they came in the store the first time.”
Ultimately, however, Preuss believes his duty goes beyond simply catering to his long-time customers and growing the business. He believes his success—and the success of other retailers in the aquatics market—are key to the survival of the overall industry and the hobby itself.
“I look at running our store as a social responsibility,” he says, “because there is a bigger role to play than just making money.
“Places like mine, and other independent retailers that really inspire [customers] and provide guidance, those are the place, that if they flourish the hobby flourishes. If they don’t, it will eventually come back to haunt [the industry].”
That Fish Place - That Pet Place
Store At a Glance:
Size: 88,000 square feet of retail space
Years in Business: 41 years
Owner: Scott Lebowitz
Distinguishing Characteristics: Full-line pet store with dedicated fish room and over 700 aquariums—saltwater, freshwater, reef and live plants—700-gallon reef tank and the Pirates Cove touch tank.
Sometimes, it is great to be the biggest kid on the playground. Size matters—just ask the folks at That Fish Place - That Pet Place.
A sprawling 88,000-square-foot retail space, the independent pet specialty store certainly reaps the rewards sewn from sheer size. It boasts great pricing, a broad selection and, according to store management, one of the largest selections of aquatic livestock on the East Coast. However, with only one location on its roster, the Lancaster, Pa.-based retailer has demonstrated an agility that big-box chains could only dream of achieving. In recent years, it has proved particularly nimble, as it adapted to the many changes the aquatics industry has faced.
Over the last several decades, That Fish Place - That Pet Place has tapped into almost every retail channel available. “It started out as a strictly aquatic retail store in 1973, but the hallmark of the business was mail order for many years,” says Matt Riggleman, advertising and marketing director for That Fish Place - That Pet Place. “We were one of the first catalog supply companies for aquatics.”
Recognizing the inherent strengths of the dog and cat categories, the founders expanded the store into other pet trade segments in 1998. Still, aquatics remained central to the retailer’s business through the years—Riggleman says it is the core of the business even today.
As nearly anyone in the trade will attest to, however, market forces over the last decade have not favored aquatics specialty businesses. So, while a retailer’s heart may be in aquatics, the money may be elsewhere. “It’s a higher-ticket hobby,” Riggleman says. “People have been less likely to plunk down the money than they use to.”
A rise in budget-conscious hobbyists has not been the only problem. “During the recession, we noticed that it wasn’t just that people weren’t spending as much, there weren’t as many new people coming into the hobby,” he adds.
Concurrently, as the number of people who had discretionary spending to allocate toward setting up and maintaining tanks shrunk, Internet retailers swept into the arena, hawking merchandise at prices that most brick-and-mortar independent stores could not hope to match.
“It was a double-whammy,” he says. “People became more price sensitive at the time, and thus they were pushed to the web.”
It is here where That Fish Place - That Pet Place’s agility saves the day. “It forced us to adapt to a more multi-channel strategy,” Riggleman adds.
The retailer mailed its last and final catalog a few years ago, and it has since refocused its energies on increasingly profitable and contemporary strategies. For one, when the recession hit, That Fish Place - That Pet Place was able to lean on its success in the dog and cat categories to help offset the slow growth in aquatics. Having already been established with these customers, the store was perfectly positioned to tap into this strength. It has also been playing up another strength—its ability to keep prices low. “We do a diligent job of offering the best prices possible for aquatics, especially on the supply side,” Riggleman says. “That’s one of our business goals.”
On the other hand, That Fish Place - That Pet Place downscaled in another area, abandoning the service side of the aquarium business, as its tank maintenance and setup services grew to be more burdensome than profitable. It was another move made as part of the retailer’s ongoing mission to mold itself for optimum efficiency and profitability in a changing market.
Meanwhile, the company has expanded its reach way beyond its physical walls. Riggleman estimates that about half the store’s revenue is generated through online sales. Internet competition, of course, has been robust, as Amazon and the big-box chains have become increasingly more invested in the aquatics category. Still, the retailer has dedicated staff working to drive traffic to its site and boost Internet sales. “We do a lot of organic search optimization, we do paid Google search, and we do affiliate marketing,” he says.
Despite the many challenges, That Fish Place - That Pet Place’s commitment to the aquatics world and the many hobbyists it serves remains stalwart.
“For us, [the aquatics customer] is definitely a loyal customer,” Riggleman says. “Our customer base has helped us through much of the recession, so we think that we still have them in place, and we are always figuring out new ways to incentivize them.”
Seascape Aquarium & Pet Center
Store At a Glance:
Size: 11,00 square feet of retail space
Years in Business: 39 years
Owner: Charlene and Richard Marot
Distinguishing Characteristics: Largest local supply of marine fish, comprehensive display tanks, growing coral-fragging and strong artificial-reef businesses, and large acryllic tank installation and maintenance services.
When Charlene Marot opened Seascape Aquarium & Pet Center with her husband, Richard, in 1975, the newlyweds centered their business around freshwater and saltwater fish. Soon, they expanded into the bird, reptile and small animal categories, and before long, it was a full-service shop, yet with a heavy emphasis still on aquatic supplies, livestock, tank installation and maintenance. Business boomed, “growing steadily for the first 34 years,” Marot says.
Then the recession hit.
With a staff of about 26 people supporting the once-bustling business, Seascape Aquarium began to buckle under the weight of the sagging economy. The retailer had enjoyed a strong aquarium maintenance and installation business up until this point, and sales volume had been robust. However, orders for large high-ticket tank installations soon began to dry up, as the effects of the recession chipped away at the housing market—particularly in Florida. “When the recession hit, it hit [this area] the hardest,” she says. “People left in droves.”
Naturally, Marot’s sales took a beating, as well, as many established hobbyists abandoned their passions and few new aquarium keepers stepped up to replace the customers the specialty store was losing to economy-driven attrition.
Since then, the store has confronted, and continues to confront, nearly all of the challenges the market has hurled at independent pet specialty retail—and the aquatics segment, in particular. Big-box competition? Check. Internet competition and price undercutting? Check. Showrooming? Check.
However, Seascape Aquarium is still standing, when so many others are not. “Most of the stores that were around us have fallen,” says Marot. “So we are poised to make a comeback.”
The climb back up will be arduous. The store currently has 15 employees on staff, a big step down from pre-recession times. “The ones that are left are working twice as hard, because we want to keep it going,” she says.
Even though the store moves a good amount of product, Seascape Aquarium can handle much more foot traffic than it is actually getting, particularly on weekdays. And the headaches caused by Internet competition are not likely to go away anytime soon.
Marot, nevertheless, remains optimistic—and for good reason. In recent weeks, she says, the tank installation business has been making a comeback. The business was able to hold on to a high percentage of its maintenance customers throughout the recession—Marot says some have been with her for decades. But the installation service side did not fare well . “For three or four years, we didn’t do any big tanks, it was scary,” she says. “But in the past month, we’ve sold four; and we have three or four more in the pipeline. That’s exciting because that is a lot of exposure for us.”
An aquarium the shop installed in a car dealership has been great advertising for the business, and a setup her team is installing in a hospital’s pediatric ward is sure to do the same. “It’s a fun one, because it is Nemo-themed tank,” she adds.
Marot expects Seascape Aquarium’s artificial-reef business and onsite coral fragging to play major roles in the store’s push toward its goal of recouping its past glory. Additionally, the store has a strong handle on the trends and how to leverage them. A focus on desktop and nano tanks for casual hobbyists, as well as LED lighting and hard-to-find driftwood, ornaments, gravel and sand, is likely to make an impression on a wide range of aquatics customers.
“We still do a big volume, and we still do a lot of tanks,” she says. “We’re slowly building back up, and Sarasota is coming back.”