by Mike Corry, Director of North America Sales at One Click Retail

We sure do love our pets.

In Q2 2018, Americans spent nearly $800 million on pet products on Amazon alone – that’s a growth of over 30% compared to the same period in 2017.

This steady climb in the amount of money we spend on our pets has been happening for years. We don’t call them “fur babies” for nothing: pets really are taking the place of kids in more and more U.S. households. Seeing our pets as family members not only causes us to spend more on food, supplies and health care, but also encourages us to invest more in better quality products and more nutritious food.

 

Today, 68% of U.S. households contain pets (2017-2018 National Pet Owners Survey) and the growing intimacy in these relationships is good for pet health: it’s not a surprise that animals tend to live quite a bit longer when under the protection of a loving, attentive owner. Consequently, for many Americans pet care now qualifies as a consumer staple akin to food, clothing, and utilities.

As a consumer staple, pet products are essentially recession proof. The total domestic market grew by nearly 30% in the last 5 years to an estimated value of over $70 billion according to the American Pet Products Association (APPA). Clearly, this industry is doing fine even while so many others are struggling. But as usual, Amazon still stands out. With the retailer’s pet product sales growing north of 30% year after year, it’s undeniable that pet owners are increasing the amount of time they spend on Amazon. So what’s driving this loyalty?

 

 

Food

For any retailer in the pet business, food is the main thing that keeps shoppers coming back. On Amazon, the Pet Food category makes up nearly half of total pet product sales – in the total domestic market, food makes up approximately two-thirds of the sector. (As an aside, it’s worth noting that the discrepancy between these shares might suggest that Amazon’s Pet Food sales are likely to experience a lot more growth before leveling off).

Pet owners were early adopters of ecommerce, primarily influenced by the inconvenience of having to lug big bags of food around. Because dogs tend to go through food more quickly than cats, dog owners were the first to start having their pet food delivered to their door. 30lb bags of dry dog food remain the biggest hit among Amazon’s pet products, but dry cat food is finally beginning to catch up.

Another difference between cats and dogs has to do with pickiness. Today pet owners of all stripes are highly motivated by the quality of pet food, preferring healthy, all-natural products – for example, here’s an excerpt from the bullet-point for the bestselling dog food on Amazon (Taste of the Wild High Prairie):

  • “A NATURAL food with added vitamins & minerals; fruits and vegetables as SUPERFOODS for natural ANTIOXIDANTS”

However, cats are much more likely to be picky about the foods they eat. Most cats display clear brand preferences and will refuse to eat certain foods, while the typical dog will eat whatever their owner chooses for them. This makes it harder for cat food brands to win on content alone – they need to market to both the owner and to the animal! – and also causes the Cat Food category to be more fragmented between different brands and flavors.

With Dog Food still the leading category, it comes as no surprise that one of Amazon’s latest private brand expansions is in this space. Wag Dry Dog Food, launched in May, had the most initial success with their 30lb bags, which is consistent with other leading dog food brands on Amazon, but the rollout has not been perfectly smooth.

The 5lb bag of their top selling Salmon & Lentil flavor was pulled after a number of negative reviews which stated that the food was mostly crushed to powder by the time it reached the consumer. No other ASINs had the same problem, but they did receive negative feedback based on a specific phrase in their marketing: the vague-sounding “ingredients from around the world.” For comparison, Taste of the Wild’s product page reads:

  • “Ingredients from TRUSTED, SUSTAINABLE sources around the world”

Those three additional words – trusted, sustainable sources – really can make all the difference. With so much concern about the health and safety of pet food, transparency is critical for inspiring consumer confidence.

 

 

 

 

Health

Pet Food trends are heavily influenced by health, which is also driving a sharp increase in dog treat sales, with Milk Bone and Greenies capturing the most growth in Q2 2018. Both of these brands heavily market the dental health benefits of their products while also pointing out their natural and functional ingredients. Milk Bone, which grew the fastest during the last quarter, states:

  • “Fortified with 12 vitamins and minerals to help keep your dog at his best”

By a wide margin, Pet Food & Feeding Supplies is consistently the largest Pet category on Amazon.com, but when we take a look at the top-performing individual ASINs, we see mostly Health Care products. The difference is one of brand dominance: in Pet Food many different brands compete over the top positions, while in Health Care two brands, Bayer’s Serestro brand and Frontline, together control over 50% of the category’s sales.

Four out of the five bestselling pet products during Q2 2018 were Health Care products. The top three items were variations of the Seresto Flea and Tick collar (two for dogs and one for cats) and the #5 item was a topical flea treatment for cats from Bayer (the manufacturer of Serestro). The spring and summer drove an increased demand for these products, driving Health Care to be the fastest growing category during Q2.

Pet health isn’t all about food and medication – it’s also about living an active lifestyle. Urban, indoor pets have fewer outlets for physical activity, particularly cats since they don’t usually agree with leashes the way dogs do. So the #2 category, Habitats & Supplies has benefited over the past year from the growth of cat trees, both from leading brand Go Pet as well as from the private label AmazonBasics. Cat trees benefitted from a major promotional lift during Prime Day 2017 and have continued to grow in popularity on Amazon, especially during Q2 2018.

Like Health Care, Habitats & Supplies is dominated by a handful of brands, but that shouldn’t deter pet product manufacturers from Amazon. The product group continues to grow rapidly year after year and all those new pet owners making the switch to Amazon will be coming without any brand loyalty and looking for unique, personalized products to suit them and their furry kids. Over two-thirds of U.S. households already contain pets and all those potential customers are not going away. Amazon’s private brand activity in this space is proof that there is still plenty of room for growth, competition and innovation in pet products – and that Amazon is the place to invest.

 

 

About One Click Retail

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