Top pet industry trends for 2013

January 8, 2013 - Although the pet business market has historically been known as a high growth market, as well as recession resistant during the recent economic downturn, we are now seeing the beginning of a transitional and maturing phase for our industry.

2012 was a very interesting year in the pet business. It was a  year of movement, transition and gradual growth as the economy continues on a slow, yet upward path.

We saw more consolidation and acquisition as brands begin to transition from one pet industry segment to more lifestyle pet brands. Consumers grew in their savviness, utilizing every resource available to them in making more informed and educated decisions for their pet, rather than making impulse decisions or relying on marketing claims. And as baby boomers (the most recent primary pet product and service purchaser) age, we begin to see a subtle, but expected building shift in pet product and service consumer marketing directed toward the next generations of pet loving parents; GenX and Millenials. With the growing influence of mobile usage and mobile ecommerce, we saw an early movement in how pet related marketing dollars are spent and transactions are generated.

The past and primary growth factor of the 'humanization of pets' within the baby boomer segment will not be enough for the pet industry to continue to sustain the high level of growth percentages going forward. With these indicators we expect to see a growing awareness, acceptance and change in the way pet related businesses develop and grow in the coming years; and relatedly shift the way they market their businesses.

The facts and figures

In August of last year, the American Veterinary Medical Association provided a look their '2012 Pet Ownership Demographics' as part of their Sourcebook. 

In brief, their ownership figures provided a glimpse of what's to come in the way of pet ownership. According to their report, pet ownership growth has been steady from 1988 (the first year the study was conducted) to 2008, however 'americans had 2 million fewer dogs and 7.6 million fewer cats at the end 2011 than at the end of 2007."

According to the 2011-2012 APPA National Pet Owners Survey, 62% of U.S. households own a pet, which equates to 72.9 millions homes. In 1988, the first year the survey was conducted, 56% of U.S. households owned a pet as compared to 62% in 2008.

Shifting demographics and the changing pet industry consumer

In our recent post, 'Is your pet business market declining,' we discussed the factors precipitating the flattening of US pet ownership, stating several factors including the continued struggle of the economy and individuals encountering more difficulties in their financial situation, hence bringing less pets into their home; as well as, the aging of the current and primary pet product and service purchaser - the baby boomers.

As the baby boomers age, and their pets reach old age and the end of their lives, this aging population is less likely to add another pet to their family.

As described in our post, 'the coming years will see a shift in who purchases pet business products and services; moving from the present day market of women, ages 25-55, to the upcoming market of women currently between the ages of 8-51. This next generation of purchasers of pet products and services include the 13th Generation or GenX, who are presently 31-51 years old, and the Millennial Generation or GenY who are presently 8-30 years old.'

In addition, these new consumers coming on the horizon have different lifestyles and different wants and needs than baby boomers. They are more mobile and comfortable with technology, and have a shorter attention span. They are more apt to question authority and are not loyal to organizations as compared with the loyalty presented by baby boomers.

It's clear that pet businesses must widen and broaden the demographics for whom they market and sell, as well as invest in R and D to bring a wider more appealing range of products and services that this additional demographic wants and needs. In addition, pet businesses must alter the way they market to these new consumers and become more readily available and mobile, create unique and creative ways to grab consumer attention, and be more flexible - readily adapting to change frequently - in order to compete. Consumers are now in the drivers seat.

The days of selling 'direct to consumer' are here to stay. If pet product companies do not jump on the 'marketing and branding at the consumer level' bandwagon they will see a shift in consumer acceptance and loyalty, missing out on the opportunities at hand. If not yet done, pet retailers will need to build innovative ways to build their own consumer brand, and be price competitive to survive and excel.

Those pet businesses that accept the inevitable shifts in consumer demographics and ways in which consumers learn, seek out and purchase pet products and services, and shift their marketing activity to address these demographic shifts, will  be ahead of the game and create opportunity to secure brand loyalty early with this up and coming consumer.

With the advent of technology and social media, we will see a specific trend in increased consumer involvement in the development of products and services by pet industry and non-pet industry related businesses. Pre-sumers, (part of the new and evolving demographic of pet products and services) as they are called want the best, they want it now and they want it first; as well as have a human connection and involvement with the companies from which they purchase. This 'new way' of marketing will help smaller, lower funded pet product and service companies be more competitive in an increasingly 'big business' market.

Overall Trends

We will continue to see businesses outside of the pet industry continue to target the pet industry market with products and services designed to provide a wider variety to their current offerings, and expand their market to target the large demographic that the pet related industry provides.

Big box stores and supermarkets already committed to the pet loving market will continue to grab market share and expand shelf space, concentrating on consumer demands of healthier products for their pets.

During and after the recession we saw a lag in corporate mergers and acquisitions. However with the stabilization of the economy, companies who were hesitant to expand in this manner have been, and will continue to, seek out and complete profitable and brand expanding partnerships. We also see these mergers and acquisitions within the pet industry occur as brands strive to provide more and more products and services to build pet related 'lifestyle brands' and broaden their prospective and current customer base.

Co-branding, licensing and private label affiliations will increase and grow as companies also seek to expand their current offerings and take advantage of broader markets.

Pet product and service trends in 2013

Quality, over quantity, will prevail

As in our report from last year, we will continue to see an increase in demand for quality over quantity. The days of impulse and 'try it, I may like it' days are behind us as consumers seek to maximize the value of their pet product and service dollar.

Healthy, green

As in past years, we will continue to see a rise in healthier, greener pet products and services over the coming year as consumers become more and more educated through the proliferation of information available through the Internet. The difference this year is that this market is 'forecast to jump by 32 percent in 2013 as mass retailers devote more shelf space to such items and manufacturers expand their offerings,' according to a report released Nov. 5, 2012, by Packaged Facts.

The 'green' segment of the pet industry consumer group will be more vocal and active in sharing information with pet loving friends and family, and publicly through social media. And this 'green' segment is very well educated and not shy about sharing their knowledge and exposing the increasing 'green washing' beginning to  become common in the pet industry.

Growing the lifestyle

Savvy and high purchasing pet product consumers have long considered their pets as part of their family. This demographic will be seeking out more and more products and services that allow their pet to more actively participate in their entire lifestyle. Hence, we will see an increase in products and services related to pet travel, hotel services, airline services; and consolidated services for both pet and pet parent at one single location.

Going higher tech

With the increased usage of technology, we've initially seen a good number of technology oriented products for pets including tracking systems, mobile phone apps, automated product functions and more.

We will see technology integrated into more and more pet products in the coming year, as the 'next generation' of pet consumer demands more convenience, simplicity and tech integration, and companies see the benefit in attracting and selling to this growing demographic.

Trends in toys

Over the past years we've seen an increase in interactive, intelligent and puzzle toys for dogs, as well as some for cats and other pets. We will see further increase in these types of toys for not only dogs, but more for cats and other pets as this trends migrates to other species.

Consumers will demand tougher and tougher toys. It will be a challenge for pet product manufacturers to satisfy the ever increasing desire to find toys that their pets cannot destroy, as consumers seek quality over quantity.

With the increasing claims of the dangers of pet products coming from Asian countries, consumers will demand more and more pet products made in the USA. Those companies that fulfill that need will have advantages in their market.

We'll see larger pet product companies invest more this year in innovation, and research and development as the economy begins to become more stable and secure in nature.

Health and wellness

Many consumers are beginning to change the way they think about health, wellness and care for their pet. They are demanding more from their health and wellness care providers and looking at a more integrated healthcare approach.

This in turn is creating a market for complete wellness centers for pets from conventional to holistic approaches. Despite movements by organizations to dispel certain types of care and nutritional programs, consumers will still seek out what they believe is the best wellness and care options for their pet family.

We'll see increased usage of insurance by pet parents as the costs of healthcare for pets continues to climb. And we'll see wellness centers and larger veterinary practices begin to market and provide a total care approach (with products and services), as well as facilities broadening their specific niche of services (along with products) in the areas of rehabilitation and holistic services. In addition we will continue to see pet product and service providers dive into offering additional health related services as a way to satisfy demand of a total pet lifestyle offering.

We's also see increased services pertaining to the aging pet population including in-home hospice services and and out-of-home senior care, as consumers look for services to care for their senior and ailing pets.

Foods and treats

The past few years we've seen a growing trend in healthier, grain free and organic options for feeding pets as consumers demand a healthier life for their pet. Any pet food that doesn't meat these requirements of healthier options for pets will struggle in finding ground for the most prolific pet product buying consumer.

As consumers become more and more educated, and the up and coming young demographic (who are skeptical of marketing jargon and blanket claims) of pet product consumer grows, the key to marketing healthier options for pet's food and treats will be honesty and complete transparency. The days of saying a dog food is healthy and/or natural and not being able to back that up claim with species appropriate and healthy ingredients is going by the way-side.

In addition, we will see a growing trend in the pet food category that is species appropriate and lifestyle stage appropriate. USA made will become even more important as we will see additional recalls in the pet food and treat category.

Service providers to broaden

With the increased demand of consumers for more convenience and one-stop-shop services from brands they trust, we'll see pet service providers continue and begin to offer a wider range of services for their clients and prospective clients. For example, pet sitters will broaden their services into pet food delivery and dog walking, groomers will add additional services such as day care and pet sitting; and we'll see all-in-one pet businesses pop up in localized residential areas to service these pet loving families within their communities.

The face of retailing

Pet product retailers will need to change their way of thinking and how they service their customers in order to continue to compete. With the beginning (and expected long term) increase in mobile device usage by the upcoming demographic markets for pet related products and services, retailers will need to continue to evolve, change and grow for these consumers to provide the complete retail experience for the pet loving consumer - both online and offline.

International markets and legislative impacts

International markets will become more and more attractive to US pet related product providers, as these International markets pick up steam in pet industry growth occurring from increased pet ownership and spending, and as US pet businesses look to other markets for expansion and growth. We're already seeing a wide variety of pet related products originally marketed and sold in the US now being sold in International markets very successfully. Countries showing significant opportunities include China, Japan, India, Brazil and Russia.

Pet product businesses will continue to be challenged in how they do business because of consumer demand and the resulting legislative pressures in how they do business and what they offer. For example the recent moves to ban the sale of pets in pet stores, and most recently the move by California to ban GMO's in foods, including those for pets. Pet businesses who change with the times, and align their business and the products and services they offer with customer wants and needs, will be more successful in the long term and be better able to evolve and become leaders in their markets.

Trends in marketing for pet businesses in 2013

Marketing in the pet industry is changing and it's changing rapidly. Gone are the 'old ways' of marketing pet related products and services. We are now moving to an expectation economy...one where serving, assisting and nurturing current and prospective consumers will be increasingly important. Pet related businesses who continually reinvent how they market their business, adapt and keep pace with the wants and needs of the changing demographic of the pet industry consumer will be more successful in the long term.

Pet businesses who were successful during the initial 'hay day' of the pet industry and who are still resist to change will increasingly see their market share decline.

Because of the fast pace and changing expectations the Internet has brought to the lives of the pet product and service buying consumer, pet businesses must adapt and keep pace to be successful. They need to consider more mobile marketing, presumer and custowner marketing, more involvement in social media (Facebook, Twitter, Google+, Pinterest, Instagram) with respect to social lead nurturing and integrating ecommerce opportunities, and learning how to reach, target and speak to the changing demographic on a personal and individual level. In addition, pet businesses need to focus more on tracking and evaluating marketing analytics to be certain they are concentrating their efforts and marketing dollar in the most effective way.

With all of this 'new way' of marketing focusing on mobile, demographic and location based, as well as consistent and targeted communications, pet business marketing departments and personnel will see an increased need for a more integrated approach to their marketing efforts.

Baby boomers who consider brand loyalty very important are going to be replaced by a demographic that is more mobile and tech savvy, more skeptical, more communicative, creative and visually oriented, and have a shorter attention span. The key for pet related businesses is for them to create effective, targeted and creative marketing plans and strategies that fill the needs of an ever evolving demographic.

In conclusion:

As stated previously, it's obvious that pet ownership is beginning to flatten. With this evidence it will become increasingly important for pet businesses to alter the way they do business. The old way of running pet businesses will not allow companies to continue on a growth path. They will need to be more innovative in the way they develop products and services; they will need to alter the way they market to, speak to and nurture consumers; and they will need to increase the demographics that they reach.

Opportunity abounds for those willing to change, adapt, reinvent and think outside of the box.

Sources: Euromonitor International, AVMA, APPA, Packaged Facts, Pet Product News International, Trendwatching.

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4 comments:

  1. Wow, what an awesome article!! Thank you so much! I'm changing my business direction based on this great information.

    ReplyDelete
  2. This is a great article. The world is changing very fast, and each generation has different buying styles.

    I really liked reading about these trends. Even if your business revolves around the cute animals (which I love!), you still need to keep in mind the business side of things.

    This gave me a lot to think about.
    Mary

    ReplyDelete
  3. Thank you for your article on the changing demographics of pet business consumers. I found your article enlightening and food for thought. The GenX and Millennium generations are so different from the Baby Boomers that we need to make the changes necessary to appeal to the younger crowd. We noticed last year that after 18 years in business, our pets are aging and passing over to the Rainbow Bridge in large numbers and we have not replaced them with as many new clients. Our business has diminished as you pointed out and now I have some insight as to how to make the changes we need.
    Thank you,

    ReplyDelete
  4. Pawsome article :o)

    Thank you!

    ReplyDelete

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