From a retailer’s perspective, the profit potential of dog treats is obvious. They come with attractive price points, impressive margins, cross-selling versatility and the power to inspire impulse purchases. The latest trends are greasing the wheels for even further sales and growth. As more consumers sniff out products that meet increasingly well-defined needs, such as the demand for specific nutritional components or treats with U.S.-sourced ingredients, the market remains fertile ground for retailers looking to generate quick sales and secure loyal customers. Stores that can put manufacturers’ tools and support to good use while employing a smart merchandising strategy will likely reap the maximum bounty.
Planting the seeds for growth, however, starts with having the right assortment. Manufacturers agree that retailers need to have products that match the nutritional profile many dog owners are seeking and answer consumers’ call for homegrown fare.
“After speaking with hundreds of stores, we learned the two most common needs for treats were grain free and ‘Made in the USA,’” says Lonnie Schwimmer, president of Nootie, manufacturer of YumZies, an all-natural dog treat. “We had ‘Made in the USA’ covered and dug deeper into grain free.”
Nootie decided to not only meet the demand for grain-free treats, but to tap into a largely unmet demand as well. “We learned that most grain-free treats were only available in biscuits and jerky-style treats,” Schwimmer says. “However, the stores said soft treats were their best sellers, so we said ‘Why not make a soft grain-free treat?’”
Although treats are not meant to be a dog’s main entrée or to supply the bulk of its daily sustenance, consumers are increasingly concerned with the nutrient make-up of the treats they feed their pets. Companies such as NPIC, makers of N-Bone chew treats for dogs and cats, are happy to oblige these health-conscious pet owners.
“Functional treats are becoming more popular within the treat category,” says Mayumi Balthis, marketing associate with NPIC. “The mindset is, if you’re going to be giving treats to your pet, why not also give them added nutrition in the process? I think more and more consumers are educating themselves on the ingredients that go into the treats that they give their pets.”
Manufacturers are also capitalizing on a growing demand for products that are made from ingredients sourced in the U.S. Largely because of concerns over the quality of ingredients from China and other countries, “Made in the USA” has become synonymous in the minds of many consumers with quality in pet foods and treats.
Support the Effort
Beyond having a selection of treats that meet the needs of today’s dog owners, retailers are relying on proven merchandising strategies, as well as whatever support manufacturers provide, to maximize sales in this category.
Ahdee Abramson, president of Pet ‘N Shape, agrees. “Retailers and consumers are more keenly aware of where products are made, and [retailers] are looking for better tools to sell products,” he says.
Those tools, which can include anything from signage to display racks, become the retailer’s most crucial assets in getting the most out of their treat assortment, he says.
“Retailers should merchandise treats all over the store on clip strips, endcaps, by the counter, by the food, etc., to get as many impulse purchases as possible,” Abramson says. “Also, there should be signage for categories highlighting different treating opportunities, i.e. training, sensitive stomachs, special dietary needs, etc.”
Manufacturers play a big role in getting these products off shelves and out the door, as well. Aside from formulating products that resonate with consumers, many of these companies also design packaging with consumers in mind. Retailers often take this into consideration when deciding what to stock.
Balthis says packaging does indeed matter, and treat manufacturers rely heavily on attention-grabbing design to drive those repeat purchases and fast turnover while also providing a framework for selection based on dietary or nutritional choices.
“Packaging our treats in attractive, coordinated colors with easy-to-read sales points has made it easy for consumers to pick up on the colors and their associated functions,” such as low-calorie or joint-pain formulas, Balthis says.
Nootie is another company that is particular about packaging. “We spend a lot of extra money developing original packaging using artists, not traditional graphic designers,” Schwimmer says. “Almost every product we make has our character telling a different story. Our artwork develops an emotional connection with the consumer. Then our products deliver these emotions through their functions.”
Treats are also especially suited to cross-merchandising and cross-promotion. Many companies have either added treats to other product lines or have launched new products off their treats.
“Because of our high-quality grooming products that we have started to establish in the market place, we were able to leverage our reputation with our grooming products to launch our YumZies treat line,” Schwimmer says. “With our unique packaging, we are able to cross-promote our treats with our grooming products. The colors are uniform to have a consistent branding flow, and they merchandise well together.”
Retailers, however, shouldn’t rely on packaging to do all the work. They must be strategic in how they manage their retail floor space.
“Use the merchandising displays in key high-traffic areas in order to spur impulse purchases,” Abramson says. “It’s also important to correctly and aggressively price treats in order for them to turn quicker and get consumers back in the store more often. Treats are great consumables to help get more frequent store visits and higher ticket sales.”
Smart in-store merchandising combined with active promotions that many treat makers offer will help store operators keep their treat section fresh and profitable.
“We offer monthly and quarterly promotions along with free samples in order to help retailers by giving them an opportunity to buy items on promotions so that they can then pass on promotions to their customers,’” Abramson says.
Nootie launches its products with buy one, get one free promotions, Schwimmer says, adding the company plans several promotions throughout the year.
Meanwhile, NPIC supports its products and retailers through various means, including advertising, brochures and flyers, as well as consumer education via social media vehicles.
“We also list all of our products, their facts, ingredient lists and guaranteed analysis on our company website,” Balthis says. “Consumers will have the opportunity to scan the QR code at a store, or wherever they see our product, and from there, be taken directly to the product’s information page on our website. Having that additional resource at the consumer’s reach can be a powerful tool in a buying decision.”
Dan Headrick is a writer and marketing executive. He co-owned and operated Wag Pet Boutique in Raleigh, NC, from 2003 to 2010. The store received numerous community and industry awards.
The Trick to Selling Treats
May 1, 2012
Treats make great impulse buys and inspire repeat visits from customers—but there are ways to fire up even hotter sales in this strong category.