Partners in Success
Steve King, president of the Pet Industry Distributors Association, shares his perspective on a variety of dynamics within the pet industry, including the vital role that distributors continue to play for pet specialty retailers.
This year, the Pet Industry Distributors Association is celebrating its 50th anniversary. What does reaching this milestone mean to you and your team? What does it say about your organization?
King: I think it highlights the fact that PIDA has stuck to its core mission—to enhance the well being of wholesale distributors and to promote partnerships with their suppliers and customers—since it has been in existence. Everything that we have done goes back to fulfilling that mission.
And while we have stayed true to our mission, we haven’t been afraid to look for opportunities to do things collectively with other associations, so long as it benefits the pet industry overall. The Pet Leadership Council is an example of that, where several organizations are working collectively to try to enhance the reputation and the visibility of the industry with consumers. Likewise, supporting PIJAC [the Pet Industry Joint Advisory Council], HABRI [the Human Animal Bond Research Institute] and the Pet Care Trust are all things that we are doing collectively with a lot of other members of the pet care community. But there are still many other things we do that are specifically geared towards wholesale distributors.
Fifty years is an important milestone in any organization’s life, and I’m very proud of the role that I’ve had with PIDA for more than half of that time. I think the future remains bright for wholesale distributors and for the organization that represents them.
From your perspective, what is the state of the pet industry? What are the major opportunities and challenges facing the industry today? What is your outlook for the industry over the short and long term?
King: Without trying to sound like a broken record, I think that the state of the pet industry is strong and continuing on an upward trend. Sales of pet products and services are trending in line with overall retail sales at 4.1 percent growth. According to Brian Beaulieu at ITR Economics, who was a keynote speaker at the Pet Industry Leadership Conference in January, retail sales should remain strong through the first half of this year, with some slowing in the third and fourth quarters. While 2019 may be somewhat flat, there’s no significant downturn expected in the U.S. economy for the foreseeable future.
Beaulieu also had the pet industry on his list of the top-12 industries to be a part of, which included robotics, security, health care and energy distribution. So we are in pretty good company.
Of course, there will be challenges. For brick-and-mortar retailers, online retailers are the number one concern. The percentage of pet owners who have shopped online is growing rapidly, and not just among Millennials. The head of Amazon’s pet division also spoke at the leadership conference, and he made it clear that they view pet as a major growth area for them.
The good news for traditional pet retailers is that American pet owners still like to shop in physical stores. Retailers need to concentrate on the competitive advantages that they have to keep customers happy and coming back in their stores. A recent survey of pet retailers by PIDA found that two-thirds reported sales growth over the past two years and an even higher percentage expect 2018 to be better.
How are the pet industry’s specialty distributors doing? What are some of the key opportunities and challenges facing your membership today?
King: Distributors’ success reflects the success of their retail customers, so they are benefiting from the overall growth in the industry. Our recent study on the distributor-retailer relationship showed that a majority of retailers order from four to seven distributors. So, even though consolidation has impacted the overall number of distributors, retailers still buy from multiple distributors to get the exact products that they want—since no single distributor can carry every product.
Distributors are increasingly offering services to their customers that go beyond the logistics of product ordering and delivery. Retailers can now use their websites to tap into the entire inventory of products that some distributors carry to help their customers find what they want, even if the store doesn’t stock it. Distributors are helping retailers provide a more robust customer-loyalty program, simplifying redemptions and credits. Distributors are even helping retailers deliver orders right to their customers’ doorsteps.
Distributors have made massive investments in technology to help drive cost out of the channel so their customers can compete with online retailers and big box stores. The biggest challenge sometimes is getting retailers to move out of their comfort zones and adopt some of the same technology that will help streamline the order process, control inventory costs and be a better resource for their customers.
As you mention, PIDA began surveying retailers about their distributor relationships last year. What has this study revealed?
King: The study showed that retailers are largely happy with their distributors, but there is room for improvement. Two-thirds of the retailers surveyed said their stores are treated as valuable customers by distributors. The highest marks distributors got were for their courteous and helpful delivery drivers. Price was the top reason pet store owners cited for choosing a distributor, but service is what keeps them as a customer. This includes product selection, accuracy of order fulfillment, ease of ordering, prompt delivery and relationships with their sales reps.
Pet store owners are eager for more support and stronger relationships with distributors. In particular, they want things that they can pass along to their customers and that will help them to reach their customers and potential customers—including giveaway items for special event days, samples, co-op advertising and promotions, and ready-made graphics.
Have there been any notable changes/updates to PIDA’s Pet Store Pro free online training program for retailers?
King: Pet Store Pro continues to evolve to better meet the needs of our growing number of subscribers. More than 470 stores registered to use Pet Store Pro in 2017, bringing the total number of subscribers to over 6,000 stores. New user registrations were up by nearly 2,900 for the year. More than 30,000 pet store employees, managers and owners have now completed one or more chapters.
In addition to improvements in the user interface that we are rolling out at this show, we are adding a new chapter on creating a training strategy for employees that will address how training benefits customers, how to structure effective incentives, and how to establish systems and processes for using Pet Store Pro.
We are also partnering with PIJAC to update all of our animal care chapters, using the expertise of their Herp, Small Animal and Aquatic committees to ensure that the care recommendations are based on the latest science.
How is the Pets in the Classroom program going? Have there been any notable developments with the program?
King: This year, we have already set a record for the most grants awarded in a single school year. We just crossed over the 20,000-grant line. It’s pretty astounding. We’re eight years into this program now, and we continue to issue more and more grants every year. In all, we’ve issued more than 115 thousand grants so far.
Part of the success of the program has been not only in reaching new classrooms, but also keeping teachers involved year after year. How do you accomplish this?
King: Once a teacher gets a grant, they’re eligible to get a sustaining grant in future years that provides them with up to $50 for products that they need to care for the animals. We’ve done more than 4,000 of those sustaining grants this year alone, and the fact that the number of sustaining grants grows each year tells us that there are a lot of teachers who continue to have their classroom pet year after year.
The great thing about a program like this is we’re reaching a whole new set of kids each year in those classrooms, so it reaches probably a much larger number of students than we even realize, given how many classrooms renew each year. We really think that we’re having a major impact on classrooms throughout North America.
Have there been any significant changes to the program over the past year?
King: The only change that we made this school year was the addition of ninth grade classrooms. That was largely because we understand that kids often start to make career choices as they get into those high school years, so exposing them to animal care at that age is an opportunity to reach a whole new group of students who might eventually go into some aspect of animal care, whether it’s the veterinary field or owning a pet store. We want to try to encourage that as much as possible.
The Pet Care Trust recently revealed the results of a study into the positive effects that classroom pets can have on students. Can you tell us what the study found?
King: We embarked on this study last year to get a first-of-its-kind look at the impact of classroom pets. The study used matching pairs of classroom in the same schools throughout the country—one that had a classroom pet introduced during the school year, and one that did not have a classroom pet. The study administered standardized tests three times during the course of the year—once prior to the introduction of the pet, once about halfway into the school year after the introduction of the pet and finally once toward the end of the school year. We wanted to get a sense of whether or not there was a noticeable difference between the classes that had a classroom pet versus those that did not. It was a very well-thought- out and administered survey conducted by the researchers at American Humane Association.
While the full results of the study won’t be available until they are published in a peer-reviewed journal, I can tell you that there was a significant difference between the classrooms when it came to the overall social skills of the students. That applies to such things as cooperation, assertion, self-control, communication, responsibility, empathy and engagement. That, in and of itself, is a major finding because we knew from an earlier study that teachers reported better behavior in the classroom when a pet was introduced, and they had better social interactions within the classroom as they work together to care for the pet. For example, they were more likely to be quiet when the pet was there, so they wouldn’t frighten the animal. This latest study showed that this was a result that could be measured.
Every year, PIDA organizes the educational seminars at Global Pet Expo. What can attendees expect to find at Global Pet Expo Academy this year?
King: Two things that are completely new this year are aimed at making the seminars even more accessible to retailers.
For a number of years now, we’ve done what we call our mini-sessions, which are 15-minute seminars that, while they are complete themselves, are a bit of a teaser to encourage attendees to take a look and see if they are interested in attending a longer seminar presented by the same speakers.
This year, we’ve put the mini-sessions in the New Products Showcase. We know that’s a place where many people start their time at the show, and now they have an opportunity to listen in on several of the mini-sessions without leaving the show floor.
Second, we wanted to better utilize the aquatic expertise that we have here at Global Pet Expo, so we’re working with the Florida Tropical Fish Farms Association to offer four seminars right in the Aquatic Lounge. Retailers can stop by these seminars to catch up on some issues related to the keeping of aquatic species, while they’re walking the show floor.
Beyond those elements, we’re offering a good mix of new presenters along with some of our old favorites. This year, about half of our speakers are new to the show, including Tom Crossman, who has been a store designer for a lot of different formats. We thought that it would be really interesting to have someone come in who has done store design for not only other types of retail stores, but also places like Dollywood and Legoland. There is lot of visual merchandising that can be found in these types of venues, and there might be some opportunities in bringing some of those ideas to the pet industry. Pet stores are such visual places already, with the animals and the habitats. I think there’s a lot we can learn from not only other types of retail stores, but entertainment venues as well.
Another new speaker we’re excited about this year is Lori Kleiman, who is leading several sessions on various human resources topics. Anytime a store has employees, there are things that owners and managers need to know, from the legalities of hiring and firing, to wage and work-hour rules—all of the things that are important to any retail business.
When it comes to returning speakers, Lynn Switanowski has been doing the show for about a decade now and always brings a fresh approach to marketing, particularly social media marketing. She always draws large crowds to her seminars because they’re interesting, entertaining and contain some really great information.
Can you tell us about the series of educational webinars Global Pet Expo Academy started offering, in conjunction with Pet Store Pro, before the show?
King: The concept is that we want try to extend the reach of Global Pet Expo Academy beyond just one week in Orlando, so that people can continue to benefit from the knowledge of our speakers throughout the year. So, we’re offering a series of free one-hour webinars.
Lynn Switanowski kicked the year off with one on social media marketing in January, and Anne Obarski did one in February on improving the customer experience in your store. We will have a webinar about every other month for the remainder of the year using different speakers. The next one will be held in April and will be led by Lori Kleiman, who will teach retailers how to recruit high-quality employees.
This year, PIDA and the American Pet Products Association hosted the third-annual Pet Industry Leadership Conference. How did the conference go? What were some of the highlights of this year’s conference?
King: It went very well. I thought the program, from top to bottom, was the strongest that we’ve had, certainly in the three years that we have worked cooperatively with the other associations in doing the leadership conference.
In regards to the keynote speakers, we had [economist] Brian Beaulieu lead off the conference, and he never disappoints with the level of detail that he brings about economic trends.
We always try to bring in speakers that we think are going to resonate with attendees, and I felt like Mel Robbins and Jim Platzer really knocked it out of the park, not only by having a good message, but more importantly by bringing such credibility because of the way they are able to relate their own life experience in overcoming challenges.
Then we had Brett Williams, who discussed a topic that is top of mind for everyone in both their business and
personal lives—how do you protect your data? We’re so connected today with all of our devices, and that just makes us so vulnerable. I thought Brent had some really solid advice for people as to what they can do to protect those things that are really important
Do you have any details about next year’s Pet Industry Leadership Conference yet?
King: The conference will take place Jan. 27-30 at the La Cantera Resort & Spa in San Antonio, Texas. We hope the move to the center of the country, will appeal to attendees from anywhere by shortening their trip.
What does the future hold for PIDA? What role do you expect the pet specialty distributors to play in the future success of the industry?
King: Well, we’ve certainly seen consolidation again this year, but I think we’ve seen that wave crest at this point. While there are still some small acquisitions being made by some of the bigger distributors, what they’re really focusing on is consolidating those acquisitions into their organizations to take advantage of some of the resulting economies of scale. That’s a hard thing to do, because you’re talking about coordinating every aspect of their business to act like one entity rather than 15 separate businesses under one name. So, I think we’ll start to see more internal changes to drive that.
What makes me feel optimistic about the role of distributors going forward is that we still have a lot of strong regional distributors in every market, and that’s because there’s still a lot of independent retail accounts out there that are doing quite well. The humanization trend and the proliferation of pet specialty brands—particularly in the food and treat categories—have made it a pretty good time to be a retailer in this industry. And these retailers need well-run distributors to do all the things that good suppliers do. So, I think there is still an essential role for distributors in this channel.