Navigating a Sea of Change
By Melissa Breau
Published: June 1, 2012
The aquatics industry has undergone major changes in the last few years as retailers have been forced to navigate a rough economy. The good news is that experts say surviving the storm is possible—and better days are on the way.



Pet stores have always faced a unique set of challenges in the aquatics category due to the level of complexity, evolving technology and relatively high price tags involved in this segment of the pet industry. However, aquatics retailers have faced new obstacles in recent years as a weak economy has taken its toll on the aquarium hobby.

“The aquarium section of our industry has suffered disproportionately from the recession, since it is seen as a ‘non-essential’ branch,” says Guy Oei, owner of Albany Aquarium in Albany, Calif. “Pets—dogs and cats—are considered part of the family and will be taken care of even in difficult times, but aquariums can be shut down permanently with no ill effects on the ‘family.’”

For many stores, the added stress of recessionary forces proved to be too much. “Three months ago, a store in our neighborhood, which had been in business for 31 years, closed due to declining sales. Seven months ago, a store that had been operating for 25 years suffered the same fate,” says Oei.

Albany Aquarium has been in business for almost 40 years and, unlike many of its neighbors, has tackled the changes in the industry successfully. In fact, Oei has seen his store’s sales increase by more than 35 percent over the last
three years.


Bridging the Knowledge Gap
So how is he bucking the trend? By tapping the three strategies that experts agree are essential to surviving in the aquatics industry today: good customer service, staying abreast of the latest trends and a solid merchandising strategy.

As any independent retailer should, Oei understands that good customer service is good business. “We have an explicit policy of honest and respectful support to our customer and our livestock,” Oei says. “The idea that we need to respect both the customer’s and the livestock’s requirements sets us apart from most other stores. The melding of the two requirements offers us a chance to convince customers to buy better merchandise, as opposed to cheaper merchandise.”

In the aquatics industry, a big part of good customer service is educating new hobbyists. “There is a learning curve [in aquatics],” says Oei. “That learning curve means you need to nurture the new aquarists if you want them to stay in the hobby.”

Mike Tuccinardi, marketing director at Segrest Farms, agrees. “Most people will set up a 10-gallon tank or a five-gallon tank, and if they fail terribly at it—and find that they didn’t get any kind of good customer support from their pet store—they’re not going to come back into the hobby, and that’s money that you’ve just lost,” he says. “Not only the sales that you lost that week or that month, but all the long-term future sales from that are gone.”

On the other hand, by partnering with that new hobbyist, a store can create a loyal and happy customer. Store employees need to understand this and take extra time to educate new customers.

For example, offering water testing allows a store to help customers diagnose tank problems. But for new customers, that is unlikely to be enough. “You need an interpreter there,” Tuccinardi says. “Somebody who is good at customer service and good at explaining what the test results mean and how they can get through it— because it is very tricky and very discouraging for a lot of new hobbyists.”

Of course, even if every staff member understands the importance of education, it is still possible to flunk the new customer test. In order for a store to be successful, education must be partnered with consistency.

“One thing I’ve found working with independent pet stores is you have five or six key staff members at a small store,” Tuccinardi explains. “And a customer might come in five or six different times and get vastly different advice.” Understandably, that leaves customers confused—driving them away from the store, instead of building loyalty.
That’s why employee training in the aquatics industry is vital. “Having a good aquatics employee on hand can be the difference between doing $1,000 in livestock a month versus $7,000, $8,000 or even $9,000 in livestock a month,” Tuccinardi says.

Good training should be ongoing, so that employees are aware of the latest trends and the store’s perspective on these trends. Often, customers will have done some research online prior to coming in with a question—there’s so much information online that much of it is contradictory—and staff members must be able to interpret that information and offer advice.


On Top of Trends
Stores that fail to realize that the industry is constantly evolving are suffering. “Those stores that order the same items they have for the last five years, they’re never going to grow their aquatics business—and it is all too common of a problem,” Tuccinardi says. “[Retailers] are doing the same thing they have done for the last five, 10, sometimes 15 years and are expecting growth out of it—it just will never happen.”

A major split in the aquatics customer base within the last few years has made staying on top of the latest trends more important than ever. Philip Root, managing director at Blue Ocean Corals, says the economy has polarized the industry, creating two types of customers: hobbyists, who keep an aquarium because they enjoy it; and design-minded clients, who see an aquarium as living art to decorate their homes with.

“The recent economy is making stores choose one direction or the other,” says Root. “[Retailers have to choose to be] either high-end specialty, or a little more cost-conscious hobbyist shops.”

Tuccinardi agrees. “It’s a different consumer than you would have seen in a brick-and-mortar retailer 10 and 20 years ago, for sure,” he says. “There are less people who get a fish tank just to have a hobby.” Because of this, stores need to pay extra attention to what sells and what is trending in the current market.

One recent trend retailers should take note of is LED lighting—for both reef and freshwater tanks. Across the board, experts stress that this trend is huge in the industry. “We brought them in and were apprehensive at first,” says Dane Myers, owner of Rift 2 Reef, an aquatics store in Flower Mound, Texas. “But we were almost caught off guard by the willingness of people to spend $400, $500, $800 on a light fixture. In some cases, they needed two, three or four of them.”

Like Oei, Myers is seeing significant growth during a time when most stores are lucky to see even modest increases. Myers opened Rift 2 Reef five years ago in an area of Texas with an affluent demographic and has seen a 50-percent jump in sales since then, including growth every month this year.

He adds that, in addition to LEDs, nano tanks are having a major impact in his store. In fact, he is currently re-working his fish room to incorporate micro-fish and shrimp. “They’re inexpensive, and with the economy the way it is, if you can get someone an aquarium with a bunch of fish with great personality for under $100, you can sell a bunch of that, as opposed to focusing on a single $5,000 reef aquarium,” he notes.

When discussing the latest trends that are driving sales in Albany Aquarium, Oei points to one that many other retailers may have overlooked: planted aquariums. Although the trend is only starting to take off in the U.S., he says it has long been popular in Europe. If retailers take note, Oei believes it has the potential to launch the industry into a new “aquatic age.”

He says many stores focus on reef tanks because of their large profit potential, but reef tanks are expensive for new customers. Planted tanks essentially offer customers the chance to set up a freshwater reef and can be equally profitable for retailers.

What most stores don’t realize, Oei says, is that freshwater customers make up 80 to 85 percent of their base, whereas reef aquariums tend to be 15 to 20 percent. That means there’s a much larger potential market for planted aquariums.

Tuccinardi agrees that the planted aquarium trend is on the rise. “More and more people opt for the live plants; right off the bat, beginners opt for live plants rather than plastic,” he says. However, he cautions that displaying and selling live plants come with unique challenges that retailers must address if they want to be successful.

Albany Aquarium may be leveraging planted tanks for some serious green, but at Rift 2 Reef, it’s Myers’ carefully planned merchandising strategy that has given him the chance to grow. He worked in the industry for 11 years before investing in his own place; so he knew from the beginning that he wanted to create a selling environment that was modern, clean and well lit, with a high level of visual impact. “We wanted people to walk into our store and feel like they were in an Apple store,” says Myers.


The Miracle of Merchandising
Full-line pet stores have long enjoyed the pull of putting puppies or kittens in the front window; Myers has adapted that idea for the aquatics market by using display tanks. He wants to inspire people who may never have had an aquarium before to come in and buy one.

Most people look at an empty aquarium and they just see a glass box. “They don’t see what myself or another storeowner may envision,” says Myers. It’s just like art; for most people, a blank canvas is just that—but for Picasso, it held a special potential.

“There’s a reason people sped the money that they spend on paintings, but they can’t paint,” he adds. So his goal is to paint that picture for them, so that when they see his display aquariums they’ll say, “Hey, I’ll buy that.”

“You wouldn’t buy a Lamborghini in a parking lot on the corner of a used car lot; it’s just like that,” Myers says.  “We wanted people when they came in here to say, ‘these guys are industry professionals.’”

Of course, before the bloom of the design-focused aquatics customer, Myers’ strategy might not have worked nearly as well; but today displays are essential in attracting new customers. “We maintain and display several beautiful displays of fully planted tanks with obviously happy, healthy and vibrantly colored fish,” Oei says. “Without these displays, the sales we specialize in would not be possible.”

The kind of experience display tanks provide is also really important in allowing brick-and-mortar retailers to compete with online stores, which may be able to beat them out on price. Tuccinardi worked for a retailer that sold aquatics products for many years before joining Segrest, and he says during that time he sold a number of tank setups—usually in the $700 to $1,400 range—simply because he was able to show them what that tank might look like in their living room.

When paired with excellent customer service that creates an experience that can’t be replicated online, a list of products and their specifications will never be as impressive as a fully set-up tank with living creatures and/or plants. “For the longest time, retailers were hesitant to give up valuable floor space to a display, but now I think they’re starting to realize just how much that can drive sales,” Tuccinardi says.

In other words, the secrets that successful brick-and-mortar aquarium stores are using are good staff who offer excellent customer service, industry knowledge that allows them stay on top of the latest trends and beautiful displays you have to see to believe; together, those things let them be more than just another fish in the sea.