As the retail world gears up for the all-important fourth quarter, every pet store is on the lookout for the next hot product trend that will drive sales growth through the holiday season and beyond. But for many retailers, the best chance for growth may not necessarily be a product at all—at least not in a physical sense.
A recent retailer survey conducted by Pet Business revealed that nearly 50 percent of respondents expect pet-related services to be the biggest growth area for their stores over the next 12 months. In fact, services outpaced red-hot product trends such as grain-free food and treats, natural products, raw diets and nutritional supplements when it came to areas where pet specialty retailers were particularly optimistic about potential growth.
In the face of today’s tough economic and competitive realities, it makes perfect sense that pet retailers would be so bullish on services. For one thing, a first-class lineup of services plays to the unique strengths of independent pet stores, which thrive on offering a pet owners a high level of customer service, as well as their reputation as local experts on all things pet-related. If done right, services can enhance a pet store’s image on both fronts.
Another great benefit to pet-related service offerings is that they typically bring higher margins than many of the products that can be found on pet store shelves. While the incorporation of services will likely increase labor costs, these costs are easily scalable based on the success of a particular service. And unlike product offerings, there is no shelf life for services—no markdowns, no expiration dates.
The good news is that adding services to a pet store environment can be accomplished with a relatively small monetary investment and without tying up a significant amount of valuable floor space. Of course, this will largely depend on the service in question—building a full-service grooming salon in the store will clearly require a bigger investment and more space than adding pet sitting services would, for example. In many cases, however, that initial investment will be limited to marketing and labor costs, which, again, can be scaled to fit the growth trajectory of the service offering. This makes trying out new services an attractive gamble compared with delving into new product categories, which will likely require a significant investment in inventory and allocation of floor space.
But while adding services can be a relatively easy and affordable option for pet retailers looking to grow their businesses in a stagnant economy, such a move should never be made halfheartedly. Just as a well-executed service offering can enhance the reputation of a pet store, a poorly executed attempt at adding services can have a decidedly negative impact. And in a competitive climate where a pet store’s reputation is its biggest advantage, that is something you simply cannot afford.
Serving Up Growth
Published: August 1, 2012