“The Amazon Effect” series breaks down specific product groups, compares Amazon’s performance in that category to total retail sales (online and offline) and considers the effect Amazon has on that specific industry as a whole. We’ve explored the effect Amazon is having on the toys, grocery, housewares and beauty industries; in this latest edition, we explore how Amazon has impacted the U.S. pet products market.
Americans are spending more than ever on pet products, driven by the close emotional bonds people share with their animals. Now occupying more than half of U.S. households according to the U.S. Pet Market Outlook, 2016-2017, pets today are seen as family members in their own right. Naturally, Americans who see their pets as their own children are willing to spend more on them, and savvy marketers are picking up on this trend.
- $67.5 billion: The total value of the U.S. pet product market.
- $2 billion: com’s U.S. pet product sales.
- 4%: The YoY growth of the U.S. pet product market.
- 40%: The YoY growth of Amazon.com’s U.S. Pet Product sales.
The U.S. domestic pet product market has experienced steady year-over-year growth for decades, but the demographic has changed rapidly in recent years. Urban young professionals are now spending the most on their pets; these people are highly tech-savvy and spend much more of their time online, many even going as far as to open Instagram accounts for their animals, leading to the popular #dogsofinstagram and #catsofinstagram” hashtags.
Look no further than Amazon.com’s YoY growth rate for evidence of this demographic shift: it’s 10x the growth rate of the U.S. domestic market. Today’s pet owners are highly connected and responsible for driving the market toward more online sales. Let’s take a look at which types of products consumers are turning to Amazon for and how this trend might affect the pet products market as a whole.
Pet Food & Feeding Supplies: 55%+ YoY Growth
No surprises here – pet food was one of the first pet products to really take off online. Many consumers are unable or unwilling to carry large, heavy bags of food from the store, especially among today’s younger, city-dwelling pet owners, many of whom don’t have a driver’s license or access to a vehicle.
Pet Food, 60%+ YoY growth. Top seller: Taste of the Wild Dry Dog Food, $25+ million in 2016 sales.
Pet Treats, 40% YoY growth. Top seller: Greenies Dental Dog Treats, nearly $10 million in 2016 sales.
Habitats & Supplies: 30% YoY Growth
Like big bags of pet food, crates and pens are bulky and awkward, leading many people to opt out of carrying them home from the store in favor of having them delivered by Amazon. For other large items such as pet gates and habitats, brick-and-mortar stores lack the shelf space to carry a wide variety, so by going on Amazon consumers are able to find something more personalized.
Pet Crates & Pens, 35%+ YoY growth. Top seller: Midwest iCrate Double Door Crate, $6+ million in 2016 sales.
Pet Doors & Gates, 30%+ YoY growth. Top seller: Carlson Gate with Pet Door, $5+ million in 2016 sales
Small Animal Habitats, 35%+ YoY growth. Top seller: MidWest Critter Nation Animal Habitat with Stand, $3+ million in 2016 sales.
Health Care: 30%+ YoY Growth
Another side-effect of the increased urbanization of pet ownership is an increase in medical expenses. Indoor pets tend to live longer and many households now own older cats and dogs requiring more medication for age-related conditions. While Amazon is obviously not able to provide veterinary services, it does supply many over-the-counter medications at a cheaper price.
Pet Health Care Supplies, 30%+ YoY growth. Top seller: Nutramax Dasuquin with MSM Chewables, $10+ million in 2016 sales.
Pet Pest Control Supplies, 40%+ YoY growth. Top seller: Bayer Advantage II Flea Control Treatment for Cats, $15 million in 2016 sales.
Additional top-performing categories on Amazon were consistent with these market forces. Litter & Odor, for example, experienced 45%+ YoY growth, as urban pet ownership often means limited or non-existent yard space. Grooming, Leashes, and Training & Behavior, each of which are more of a necessity in urban environments, were all top-performing categories as well.
For more info on top-performing product categories and top-selling products, please get in touch with One Click Retail.
We can see many of the same trends reflected in the UK. The top two product categories are the same, with only Training & Behavior climbing above Health Care to take the third spot. The biggest difference is that Amazon.co.uk actually holds a much larger share of the domestic market compared to Amazon.com; in the UK, Amazon is responsible for over 10% of the £900 million ($1.1 billion) domestic pet products market.
Today’s pet owners are young, city-dwelling professionals, driving sales to Amazon for a number of reasons:
- Obligated to invest more in habitat, training, litter and odor control and medication than their rural or suburban counterparts.
- Living in smaller households with limited or non-existent yard space.
- Less likely to own a vehicle or a driver’s license.
- More tech-savvy and spending more time online.
Most remarkable is the 40% YoY growth rate of Amazon’s Pet Products group as a whole, compared to the total U.S. domestic market growth of only 4%. In the UK, Amazon already accounts for more than 10% of the entire pet products market. If this trend continues it could reach that size in America as well. Amazon has recognized the value of the market by adding Pet Products to the list of product groups available for one-hour delivery in the San Francisco Bay Area, which just goes to show that they won’t let this new demographic of young, urban “pet parents” go untapped.
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