One of the more surprising developments of the 2020 lockdown has been the rise in pet-related retail, most notably in the digital space.
In September, leading pet supplies retailer Pets at Home revised its yearly pre-tax profit forecast, having registered double digit growth in the eight weeks leading up to their announcement, resulting in a stock surge of as much as 24%. This reflects a boom in the pet space generally in 2020 – the result of a perfect storm in which people were encouraged to work from home, schools remained shut, social distancing measures were introduced and outdoors exercise time was initially limited to one hour per day. In such circumstances, it makes sense that more people sought to buy pets – a source of comfort equally for families or those forced to self-isolate alone, with a positive effect on both the mental and physical wellbeing of their owners.
Pets at Home received a further boost by being classed as an essential retailer, allowing them to stay open throughout the lockdown as demand for pet supplies increased dramatically (despite their pet grooming services having to be temporarily suspended). Consequently, they have boasted the best-performing UK retail stock so far this quarter.
This represents a huge opportunity for the ecommerce and online payments space. Indeed, Google Trend analytics have recorded a spike in the phrase ‘buy dog’ in search terms during the pandemic. And while Pets at Home have proved the exception in terms of a bricks-and-mortar success story (albeit one with joined-up digital and omnichannel services), there has been a general boom in online spend when it comes to pets.
The pet owner demographic is perfect for online sales models: they have a steady demand for certain products (pet food, litter, etc) that they need to purchase in set amounts at regular intervals. They know exactly how much they will want and when they will have to restock – making them ideal candidates for payment plans and subscription billing. Furthermore, we know they will want to spend money on ancillary services such as pet insurance and medical bills, too – with 59% of pet owners visiting a vet in the past 12 months and an annual insurance spend of £274 per year for dogs, according to Finder.com.
A nation of pet lovers = a nation of pet spenders
What’s more, the pet owner market is huge. A 2019 survey by the PDSA (People’s Dispensary for Sick Animals) found that 50% of UK adults owned a pet – with an estimated pet cat population of 10.9 million, just ahead of pet the dog population of 9.9 million. And these figures, of course, don’t take into account the recent 2020 boom in pet buying.
What’s most exciting about this space in terms of ecommerce is that, once an owner has invested in a pet, they are committed to a frequent and consistent spend. By looking at the example of other ecommerce models, there is vast potential to expand into gifting boxes, 360° packages and rolling subscriptions for pampering, medical and health services – even smart litter refills. For the smart entrepreneur, the result could be the ecommerce dream: a business model that – to coin a phrase – wags the dog.