Evolve or die. This is the reality that faces all retailers, regardless of the market they serve; but it’s a message that is particularly germane to today’s pet specialty retailers as the (hopefully) outgoing recession and strengthening competitive forces drive a growing number of these businesses to shutter forever. If you want to survive, and even thrive, it’s no longer acceptable to keep up the status quo in your pet store. Instead, retailers must constantly look for ways to refine their brand by evaluating elements like marketing strategies, product mix and even the store environment itself.
“The only given in retail is change,” says Chris Miller, president of Pacific Store Designs, Inc., a Garden Grove, Calif.-based full-service retail design and construction firm that specializes in the pet industry. “The number-one reason why people go to stores is to see what is new.”
When it comes to delivering on consumers’ hunger for something new, there is probably no move a pet retailer can make that will have as big an impact as remodeling the store. Unfortunately, says Miller, there aren’t enough pet stores taking advantage of this opportunity to drive their businesses forward. Instead, they are content to continue operating in an environment that went stale years ago. “The average store doesn’t remodel like they should–they should remodel every 30 to 60 months,” Miller explains. “I’m actually quoting on some stores that haven’t remodeled in 17 years, so you can imagine how tired and boring the shopping experience is.”
Joseph Bona, president of the retail division of CBX, a New York-based strategic branding and retail design consultancy agrees. “The day that you open a brand-new store is the day that it starts getting old,” he says. “As the years go by, your competitors are doing things to refresh and rejuvenate their stores, and new competitors are coming into the market, so retailing is more than turning on the lights and having the doors open, it’s staying current and fresh.”
To some pet store owners, the idea of investing in a store remodel on the heels of recession may seem impossible, or at least inadvisable–after all, even the retailers who have fared the best through these tough economic times are experiencing only the slightest growth in sales. However, it is exactly this type of bold move that will separate the winners from the losers when consumer wallets inevitably loosen up.
“If you’re still in business, even though times are tough, maybe now is the time to think about getting ahead,” says Bona. “While it’s always a challenge to invest more money in your business, that’s part of being in retail. This might be a better time to invest in your business, so then as we come out of recession and people start splurging on their pets, you’ll be front of mind and able to get those shoppers into your store.”
More Affordable Than You Think
Remodeling a pet store will require a significant investment–experts estimate that a makeover can cost anywhere from $25,000 to $300,000 or more, depending on the size of the store and how ambitious the project is–but savvy storeowners who shop around will find that this type of project is much more affordable than it was just a few years ago. “People say, ‘Why should I remodel now, business sucks,’” says Miller. “I tell them, ‘Now is the time to do it because your dollar is going to go further. Right now, the way the economy is, I’m shipping product, installing jobs and getting construction work (electrical, mechanical, plumbing, flooring) done for far less than it cost two years ago.”
Of course, says Bona, such a large investment won’t be necessary for retailers who take an ongoing approach to keep their store environment fresh and inviting. “If you stay on top of it from year to year, or every few years, it can be as simple as changing the store’s graphics and signage, as opposed to waiting 10 years and all of a sudden you have to invest in a big renovation,” he says.
Even with all of the savings that can be had when it comes to construction costs in today’s economy, it would be a mistake to look at such an investment purely in terms of cost. Instead, retailers should also focus on the financial gains that can be made by undertaking this type of project. “The average increase in sales after a remodel, for all industries, is 17 percent,” says Miller, noting that most stores will be able to justify the cost of a remodel with just a seven percent increase. “And often, [the stores we work on] see anywhere from a 30 percent increase to a doubling of the business.”
With this type of expected sales increase, retailers can finance the initial outlay required for a remodeling project and still see an increase in profits after the monthly loan payment is due. “The increase in sales and the increase in gross profit will pay back the loan and put money in your pocket,” says Miller. He explains that for a retailer who finances a remodel on a store that’s averaging $400,000 a year in sales, a 10-percent increase in sales can increase net profits by up to $10,000 per year, and that’s after making payments on the remodel loan. “If you get a 20 percent increase, it’s like a $33,000 a year raise; if you hit 30 percent, it’s like a $54,000 a year raise; and if you hit more than that, it goes up exponentially because the overhead still stays the same.”
Increased sales are not the only way that retailers can reap financial benefits by giving their stores a makeover. Such a move can also serve to reduce operational costs. For example, says Craig DeWalt, replacing outdated animal fixtures with new energy efficient models can go a long way in taking some of the cost out of pet retailing. “You can absolutely realize savings with the new modern fixtures that are out there,” he says. “There are all kinds of things a retailer can use to save money, like LED lighting and more efficient pumps and heaters for aquatics; or for reptiles, heat pads that are much more energy efficient.”
DeWalt also notes that modern fixture configurations also make the routine care of the animals housed inside easier than ever, which will provide even more savings, in the form of staffing efficiencies.
When discussing pet store makeovers, the experts all agree that the one overriding theme that ties every aspect of such a project together is the need for each element to further the store’s brand identity. The first step in ensuring a successful store remodel is defining exactly what the retailer wants their brand to be. “It doesn’t have to become an overwhelming exercise, but it’s important for retailers to take a critical look at what they want their business to be about–who they’re going to serve, and what they are going to say to them,” says Jay Highland, director of brand communications for Chute Gerdeman Retail, a Columbus, Ohio-based strategic retail design and branding firm.
Bona also sees value in devising a branding strategy for the store before executing a redesign. “Good design doesn’t have to be expensive, it just has to be well thought out and executed,” he says. “It’s about having the right focus and then being able to communicate your message and your point of difference.”
Once a retailer decides what message they want to convey to shoppers, it’s important that they realize that furthering the store’s brand must go beyond a cute logo or catchy tag line. “A logo or a sign does not equal a brand,” says Highland. “The entire store experience is the brand, and successful retailers understand that every touch-point that their customers interact with in the store is an expression of that brand.”
Miller agrees that retailers should take a broad approach to brand building when remodeling their stores and notes that a makeover strategy should encompass elements such as merchandising and store staff. “It’s like a car going down the road on four tires–the four tires representing the outside of the store, the inside of the store, the merchandising and the employees,” he explains. “If car has one tire that’s flat or bald, it doesn’t perform as well. If we remodel all of these areas and get the car tuned up and all four tires in good shape and pointed in the right direction, we’re going to see bigger success than the 17 percent [average].”
Creating an Experience
With so much competition coming from the big-box pet superstores, as well as retailers in other channels that are looking for shelter in the relative stability of the pet category, it has become more important than ever for small, independent pet stores to offer customers an experience, as opposed to simply a place to pick up pet supplies. “Think of your store as more than just a place to sell stuff; think of it as an experience,” says Bona.
For stores that actually sell pets, live animal displays often serve this purpose well. “Obviously, people want to see the animals and touch and feel them,” says Miller. “I had one store have a pet interactive hour from 3:00 to 4:00, which was their slowest time. Each staff member got to pull out an animal and play with it for an hour, hold it and hand it off to customers. As a result, customers stayed in the store up to three times longer because of this animal interaction.”
Now, with all of the advancements made in the fixtures used to house animals in the pet store environment, it’s not just the animals that draw customer attention and create an experience for shoppers. “If you look at some of the reptile units we’ve done, you’ll see some with big fiberglass iguanas on top, with rock faces that surround the aluminum,” says DeWalt. “All of those décor packages can be added to the basic fixture at any time.”
The concept of utilizing live-animal fixtures to enhance shoppers’ experience in the store was one that was embraced by Chute Gerdeman Retail in a recent project the firm completed for one of the pet industry’s most prominent retailers. “The aquarium area looks like an undersea world,” says Lynn Rosenbaum, the company’s director of environments. We had done that with the small animals as well, and would promote the idea of creating a habitat that doesn’t just look like a category in the store, but looks like a place where the animals would live.”
Of course, not all pet stores actually sell pets. But with a little creativity, retailers who do not sell animals can still bring the element of life into their stores. “They can certainly use lifestyle images or video within the store, which is often overlooked,” says Miller. “They can also host events where an expert brings in an animal to let people handle the animal and learn how to care for them. Even better, the store can host adoption events. Or maybe you can have a store that doesn’t sell animals, but still shows off exotics, just to get people in.”
The Nuts & Bolts
While broad themes like brand building and creating an experience will factor big in a pet store makeover, eventually a retailer will have to address nuts-and-bolts-type issues like signage, aisle layout and fixtures to hold product. “We have fixtures, furnishings, flooring, lighting, paint, graphics, construction elements and décor items to play with,” says Miller.
In most of these areas, the prevailing wisdom seems to be that consistency is key. “The way you compete with big chains is by looking buttoned-up and professional,” says Bona. “This is accomplished by having consistency.”
With this in mind, retailers should avoid items like hand-made signs and mismatched product fixtures. “You want everything to be matching and interchangeable, and we want to make sure that we don’t beat people up with graphic pollution by having five different types of shelving and a bunch of free POP racks,” says Miller. “When you clean up the store and get rid of all the visual impalements, customers can focus on the product.”
One area where consistency should be eschewed, however, is in the store’s lighting.
“Lighting is one of the most important design tools that you have because that is what creates the mood and the experience of the store,” explains Bona. “If you use one consistent light level, it’s going to feel unnatural. If you go outside, whether it’s sunny or cloudy, there are always highlights and contrasts; it’s never just one evenly illuminated area. Stores should be no different–highlights and contrasts are important. So spending a little extra on lighting will go a long way.”
When it comes to store layout, most experts recommend that retailers should try to create an open and inviting feeling on the sales floor. This typically means avoiding long gondolas that serve to hide the depth and breadth of the store’s product assortment in favor of shorter, stockier fixtures that will break up the monotony of linear shelving units, stimulating the customer’s eye and guiding it toward products that the retailer wants to highlight.
Unfortunately, when it comes to devising a layout strategy, far too many retailers focus on store operations, as opposed to making the sales floor interesting and inviting for shoppers. “Sometimes a retailer will lay out the store in a manner that is most convenient for them,” says Rosenbaum. “Many small, independent retailers will lay out the store strictly from an operational standpoint. As a result, it makes it easy for employees, but the customers find it difficult to shop.”
Once the inside of the store has been redesigned, it is imperative that retailers continue the makeover outdoors. “There are so many stores out there that underestimate the power of good curb appeal,” says Miller. “You have to let people on the outside know that something happened on the inside. You can remodel the store, but it’s the same old store; people aren’t stimulated to go and check out what’s going on. Whether it’s a unique window display, new signage, a fresh coat of paint or a sidewalk event, you have to let people know that the store is new and improved.”