It’s a well-known fact of retail: some products drive traffic, while others earn margins.
In independent pet stores, it is often the food that drives repeat traffic. Yet, as any independent retailer can attest, food margins are minimal at best—and they often need to be kept that way if the store hopes to compete with others in the area.
So pet stores rely on toys, treats, accessories, furniture and the many other discretionary items on the market as a way boost their stores’ overall income.
However, some independent pet retailers are realizing there’s another option—one that can deliver both customer traffic and attractive margins: Offering one or more pet services in the store.
Retailers have a wide range of services from which to choose. Pet stores around the country have added doggie daycare, grooming services, self-serve dog washing stations, aquarium set up and maintenance, pond services, water testing, aquarium and pond landscape design services, training classes, educational seminars, pet boarding and more.
All of these options turn the traditional pet store business model on its head. These stores no longer rely solely on food products to drive repeat traffic; instead they have customers coming in for regular training classes, grooming sessions or water testing.
“There are only three ways to grow your business—get new customers, increase the average sale and increase the number of transactions per customer,” says Bob Negen, a retail expert who works with independent retailers and runs WhizBang! Training. Adding services can help a store with all of these things.
New customers may come in just for those services and wind up shopping the rest of the store as well. Low-cost services and services bundled with products can increase the average sale. And services can easily become an add-on for existing regular customers, deepening their loyalty and adding to the transactions that store will see over the lifetime of that customer.
Unleashed, an independent chain that operates three stores in North Carolina—no relation to the “Unleashed by PETCO” stores—has a self-service dog wash in each of its stores. “We basically have a professional grooming set-up, minus the groomer,” says storeowner J.P. Phony. He says the dog wash has been a draw much like food itself, with customers returning specifically to use it.
It has proven to be a great service for his stores. “It provides an alternative source of income compared to normal retail,” he explains.
He also allows local non-profit groups to assume control over it on the weekends to raise money, which brings new people to the store, raises money for the charity and gets customers’ dogs cleaned.
From Showroom to Services
Adding services does more than just help grow the store by offering another source of income; it offers retailers a way to differentiate themselves from online competitors. Many retailers have complained in recent years of customers stopping in for advice then heading home to make their purchases online. Services simply can’t be sold that way.
Further, bundling a product with low-cost but high-value services can convince a customer to purchase the product in store, says Negen. He says when he proposes these types of bundled sales to retailers, the tendency is often to worry about what would happen if all the store’s customers came in every week; but he says that simply won’t happen.
“Here’s what I know for a fact: only a small percentage of the people you offer a service to as part of a package will actually take advantage of the offer, which gives you the opportunity to make the offer even more generous, therefore adding more value to the package,” Negen says.
The added advantage to offering these kinds of bundled packages is that it encourages a habit; the customer learns to come to the same store and have the same store handle any issues they have with the product. “When you sell an aquarium you tell a customer, we’ll sell it, we’ll deliver it, we’ll set it up and we’ll come out every two weeks to keep it clean; that’s darn cheap,” says Dane Myers, owner of Rift 2 Reef, an aquatics store in Flower Mound, Texas.
Myers sees service as a natural extension of his aquatics store. “Aquarium maintenance is something that every store [that sells aquatics] should offer,” Meyers says, explaining it can add thousands of dollars a month to the store’s income. “Whether you have 20 customers or 5,000, [services are] a very cash friendly part of the business. You’d be surprised how many customers will rather you clean their tank then do it themselves—and that’s a lifeline. It’s a way to really tie you to your customer.”
Finding the Right Fit
Of course, Myers’ aquarium store probably wouldn’t do so great with the self-wash station in Unleashed stores—and vice versa. So how does a store decide which services to offer?
Services should be a complement to the store’s product offering. Negen says storeowners need to understand that customers don’t visit to buy “a thing.” They make a purchase because of what that purchase means to them.
For example, a dog owner isn’t just buying a healthy diet or a new squeaky toy—what they want is a healthy, happy pet. The products are just a way to accomplish that. Once a store identifies what drives its customers, the services that also help those customers achieve those goals will seem a fairly natural fit.
For The Pet Pad, an independent store in Cary, N.C., the solution was to offer several services that are a natural extension of the products that locals buy from the store. “We offer boarding for small animals,” says storeowner Brad Ringlien, although he specifies that the store does not board dogs or cats. “We can also breakdown the customer’s cage and clean it while the pet is boarding.”
“Many of the animals that we board came from our store,” says Ringlien. “Customers trust that their pets will be cared for when they board with us. It’s a great way to serve our loyal customers.”
As part of the store’s Pet Club, customers can get free wing and nail clipping for birds and nail clipping for most other animals. Staff will also feed finicky reptiles.
And since the store has a significant fish selection, it also offers water-testing services.
All of these services fit nicely with the product mix the store offers, and Ringlien has targeted exactly the kind of “deeper need” that Negen mentions. “Pet owners usually have a very busy life, but they still want to enjoy the pleasures of having a pet in their lives,” Ringlien says. “By offering these services, we can relieve some of the worry and work of owning a pet. The question I ask is: How will this service make their life easier to have a pet?”
There is one more important point for stores to consider when adding services: the cost.
If a store wanted to add grooming, for example, it would need a dedicated space for grooming, specific equipment including tubs, grooming tables, dryers, cages and other grooming salon supplies, plus a trained grooming staff, says Jeanne Caples, director of operations at Forever Stainless Steel, which offers a variety of tubs and grooming tools.
Despite the investment, Caples says she’s seen many stores opting to add either grooming services or a self-wash tub to their store. “Having pet grooming in a retail pet setting provides convenience and a ‘one stop shopping’ experience,” Caples says.
But the cost isn’t limited to the physical supplies the store needs, or even the cost of training and hiring staff to offer the services. Andrew Kim, owner of three-store chain Healthy Spot, located in California, says retailers also need to make sure if they’re going to add service that they do it right—“because it can help or hurt your business.”
He says one of the challenges with offering services is how the store will deal with customers who are unhappy with the service. “If they don’t like a collar they can return it,” he says, but a bad haircut can create a bad reputation for the store.
Kim’s Healthy Spot stores all offer grooming, as well as a small-dog daycare, and he says that they have achieved a stellar reputation; but, he adds, other stores in the area have tried to add services that then forced them to go out of business. “We know of some pet stores that didn’t run their services properly and it caused them to lose their customers including on the retail side.”
He says it all comes down to execution. “If you’re not able to provide them a higher level of customer service or experience, the services can actually hurt you.”
Yet despite the challenges Kim is the first to acknowledge when done right, services can be a huge boon. Healthy Spot has offered its services since day one, so he doesn’t really know where the stores would be without them, and he says he can’t say specifically what they’ve contributed—“but I can say though, is we have been able to grow quickly and I do believe services played a large part of that.”
Armed with Services
Published: July 1, 2013
Offering pet-related services can be a great way to drive customer traffic and boost an independent pet retailer’s bottom line.