How to Compete with Amazon and Chewy: A Guide for Natural Pet Stores
If there’s anything people love, it’s their pets. Pets are an important part of any household, and pet owners are often willing to invest a lot of time, money, and energy into their pet’s health, well-being, and happiness.
This should mean that natural pet stores have an easy job. But with the rise of online retailers like Amazon and Chewy, and the convenience they offer their consumers, brick-and-mortar pet stores are having to find new and inventive ways to compete with their big-box competitors. This is no easy task, as most natural pet stores don’t have the wealth of expendable income that the big-box retailers do. They have to find other ways to compete.
Competing with prices is not often an option, as the big-box stores can afford to absorb lower-priced products in order to sell more items to more people. However, there are still a number of ways your natural pet store can find its own niche. You’ll not only hold your own against the competition but also thrive in your own uniquely loyal community.
The key to your natural pet store’s success is the personalized customer service approach you can offer, and your competition can’t. With the following tips and insights, you can equip your pet store with all of the strategies and tools it’ll need to stand out from the crowd, gain an edge over big-box retailers, and find your own comfortable place in an increasingly crowded industry.
The State of the Pet Store
According to information gathered by the American Pet Products Association (APPA), the total U.S. pet industry expenditures in 2017 surpassed 69 billion dollars, and 2018’s expenditures are estimated to surpass even that. This is in alignment with a trend of rising profits for the industry that has been increasing every year since the early 1990’s.
People love their pets and aren’t afraid to spend money—and lots of it—on them. While you would think that this means that pet stores are thriving, that’s not entirely the case. Although the pet product industry is indeed lucrative and shows no signs of slowing down, more and more buyers are going online to make their purchases.
Brick-and-mortar stores are hanging in there, but as big-box online retailers like Amazon and Chewy continue to amass a larger and larger customer base, natural pet stores have been forced to find new ways of plugging into the pet owner community and earning their business and loyalty.
A Shift Towards the Digital
Buying products online is quickly becoming the new standard for shoppers around the world. Not only have online retailers like Amazon become insurmountable juggernauts in the industry, but more and more people are leaving brick-and-mortar stores behind in favor of the convenience and simplicity of online shopping.
As of February 2017, Statista reported that over 40 percent of the consumers they polled claimed to have both researched and then purchased products online instead of going to a store. That’s a significant percentage that is sure to only grow larger as time goes on.
This trend rings true for the pet store industry as well, with big-box online retailers like Amazon and Chewy standing tall as two of the most lucrative pet supply retailers on the market.
Pet care is the “second largest consumer packaged goods market in the United States in terms of e-commerce sales,” once again according to Statista. This means that fewer and fewer consumers are stepping into brick-and-mortar stores to do their shopping, making it extra difficult for your natural pet store to find a firm foundation of customers.
The Major Players
In an article posted on Forbes in early 2018, Chewy reportedly employs over 1,000 Customer Service Representatives (CSR’s), and are actively looking to hire another 400 before the year’s end. The key to the company’s success is their 24/7 customer service, their attention to detail, and the lengths they’ll go to delight their existing customers––they send handwritten holiday cards to their clientele, for example.
This is just one of the many reasons why PetSmart purchased the company for an estimated $3.35 billion, which was apparently the largest e-commerce transaction ever at the time, and why PetSmart is letting Chewy continue to operate independently. Whatever Chewy is doing, it seems to be working, and customers are paying attention to them as a result.
eMarketer Retails reports that as of early 2017, Chewy had almost 4-million customers, had generated approximately $900 million in profits, and was running neck-and-neck with Amazon in terms of online pet food and supplies sales.
While Amazon doesn’t offer the same kind of customer service that Chewy does, their extensive inventory and landmark affordability make them a domineering presence in the pet supply industry. As of April 2017, Markets Insider explained how “Amazon's purchase usage penetration among pet owners has grown 19% to 32%, surpassing Petco's user breadth (25%) and encroaching on PetSmart's (32%).”
Competing with the Big-Box Retailers
As emphatic as Chewy’s customer service may be, and as comprehensive as Amazon’s product inventory is, these retailers are still restricted to an online market. As such, they’re simply unable to offer the same kind of face-to-face communication that your brick-and-mortar pet store can.
Chewy is doing a lot of things right with their customer service, and there are things you can learn from how they’ve managed to maintain solid customer relations even at such a large scale. But they’re still a large business with lots of employees and customers. The larger a company is, the less personable it will be received by its customers and the more detached it is from individual communities. This is where your pet store can step in.
Offering a Personalized Experience
Since brick-and-mortar pet stores can’t afford to compete with their big-box competitors in their prices, the best approach is one centered on offering the kind of experience that online retailers are simply incapable of creating.
Purchasing products online is convenient and affordable, but it’s also detached and lacking in personality. Chewy’s customer service helps offset this, but there’s only so much they can do without providing their customers with face-to-face conversations with real people.
When you hire a staff of employees who are experts in their field, love what they do, and can meet the customer on a personal level that’s unique to them, you’re developing a store that offers a down-to-earth environment that the competition can only dream of. The more personable your brand is, the more opportunities you’ll have to attract a loyal audience to your store.
If Chewy can find the time to write handwritten notes for their extensive client base, then your smaller scale pet store can take that kind of personalization even further.
You want your salespeople to be the faces of your company. The more knowledgeable and personable they are, the easier it’ll be for them to connect with everyone who walks through your doors.
Steve King, the president of Pet Industry Distributors Assn., is quoted by the Los Angeles Times as saying that smaller pet store chains can be “really successful because they get to know their customers. They can be much more nimble in the marketplace and bring on products that are new and trending and hot.”
This is something the larger stores and retailers can’t do, as their size restricts them from getting as close-to-the-ground as smaller businesses can. They’re unable to pick up on new trends in product and customer behavior as quickly as their smaller competitors are.
In the end, it’s always going to be the connections your store makes with its customers that will help you stand apart from the competition. Teach your staff to learn people’s names. Take note of your customers’ purchasing habits, remember the names and preferences of their pets, and do whatever else you can do to make your clientele feel like they’re more than just a customer, but an important part of your company’s culture and community.
Selling Unique Products
There’s nothing wrong with selling the popular, big-name brands at your store, but you don’t want that to be all that you offer. Most consumers will gravitate towards what they’re comfortable with, but if your store exclusively offers the biggest name products, then you’re not only missing out on a great opportunity to help your store stand out from the competition, but you’ll also run the risk of your customers buying their products from a cheaper outlet.
One of the best ways to offer your customers a unique experience is to stock products that aren’t available anywhere else. Pay attention to the trends within the pet supply industry. If you catch wind of a new product gaining traction, jump at the chance to become an early adopter.
People love joining in on the ground floor of the “newest” thing, so be sure to capitalize on that whenever possible by stocking your shelves with products that will surprise, and hopefully, delight your customers in ways that they wouldn’t be able to find from any other outlet.
The more familiar you are with your audience, the easier this will be to do right. Taking a risk on every new idea is not going to pay off financially in most cases, but pinpointing what kinds of products your customers value and then stocking your shelves with those kinds of items can be a great way to upsell, cross-sell, and always prioritize your customer’s needs and desires.
In a similar vein, investing in ‘store-exclusive’ or locally-sourced products can be another great way to incentivize your audience to shop with you instead of your big-box online competition. Just like people enjoy the newest products, so too do they tend to favor exclusivity, and an all natural pet food store is going to be able to offer something the big competitors can't.
Advertising a product that’s exclusive to your store is a tantalizing way to get people to step into your store. Even if that specific product might not end up being what they’re looking for, having the opportunity to interact with them and kickstart a relationship is still worth the initial investment.
The goal is always to make connections with the people you’re trying to do business with. Anything you can do to facilitate that is going to help improve your brand reception and customer loyalty.
Another thing that a localized brick-and-mortar pet store can do that the online retailers cannot is to tangibly invest in a community. The broader scope of online retailers may mean they reach more people, but that reach is cursory and normally lacking in depth or sincerity. In contrast, a local pet store can deeply invest in its community and become a staple of care, expertise, and personality on a more insular, but more invested, community of buyers.
For example, a report by the Andersonville Study of Retail Economics says that “local business generates 70 percent more local economic activity per square foot than chain stores.” People are willing to favor local businesses over their mega-corporation alternatives. As a result, one of the best things your natural pet store can do is to plant roots and participate in the community it’s a part of.
Investing in a community can look a number of ways. It’s ultimately dependent on your unique store, the community it’s a part of, and the attitudes and values of the people within the community. If you need a good place to start, here are some common ways that local businesses can participate in their communities:
- Host or sponsor local events
- Volunteer your time for local outreach
- Partner with other local businesses
- Donate to local charities
These are just a few ideas, but they can be a good place to start if you’re serious about giving back to your community. Doing so won’t only help you feel good, but it will also dramatically improve your public standing and show your customers that you’re not only interested in their business, but their livelihood as well.
In fact, 75% of millennials think it’s important for businesses to have a positive contribution toward society. With the millennial generation taking up a large percentage of the consumer population, appealing to their sensibilities won’t go unnoticed.
Finding Your Own Brand of Success
Natural pet stores have their work cut out for them, as the big-box stores and online retailers can feel like formidable opponents to try and compete with. However, as daunting as those companies can appear, they will never be able to offer the kind of personalized shopping experience that has made smaller, local businesses staples in towns and cities across the country.
When you find ways to compete with large outlets like Amazon and Chewy by offering products and services they can’t, you’re able to sidestep them entirely and avoid competing with them on their turf. By emphasizing your store’s unique personality, expertise, and ability to create real relationships, you can create a store that not only encourages business but personal investment as well.
Pet owners can shop anywhere for their pet products, supplies, and goodies. The key to attracting buyers to your individual store is to offer them something they didn’t know they needed. This can be a new, exclusive product; an emphasis on personal relationships and familiarity; or a tangible investment in the personal lives of a community. The trick is being unique, being knowledgeable, and being something competitors like Amazon and Chewy are not.