Multi-category retailers are increasingly relying on pets to attract larger crowds.
Lowe’s announced that it was expand your shop-in-shop partnership with Petco, which would bring more veterinary care and pet supplies to nearly 300 Lowe’s locations by the end of the year. In his last call for results, Kohl’s also said it expanded its space dedicated to the pet category after testing that format in some of its stores. Walmart, meanwhile, has focused more on the pet category in recent years, when it began adding veterinary clinics in some stores in 2019. This year, it added free access to veterinarians virtual services as a benefit for Walmart+ members, and has redesigned some of its stores across the country to feature expanded pet departments, including those of Secaucus, New Jersey And Harahan, Louisiana.
It’s not uncommon for retailers to re-evaluate their merchandising strategies and right-size their product assortment. But at a time when people are cutting back on discretionary spending, particularly in categories like clothing and home improvement, some retailers are choosing to allocate more in-store space to pet products in order to incentivize people to visit stores more often. Retail executives say they’re already seeing increased sales and larger transactions — although it’s unclear how long the betting boom will last.
“While it is still early, we are encouraged to see an increase in basket sizes at these stores, and customers say they appreciate the convenience and the ability to reduce the number of stops they have to make “, Bill Boltz, executive vice president of Lowe’s. president of merchandising, discussed the company’s shop-in-shop partnership with Petco during an earnings conference call.
Lowe’s shop-in-shop partnership with Petco initially started in early 2022 with around 14 stores. The shop-in-shop partnership gives shoppers access to Petco’s private labels and national pet brands, like Bark Toys and Blue Buffalo.
The pets category has historically attracted more frequent visits from customers, said Brad Jashinsky, director analyst at Gartner. “For a lot of these retailers and others who are adding the pet category, it’s a way to help balance out some of the other categories that might be more seasonal or go through more cyclical periods,” he said. he declares. “Furniture and home improvement experience boom and bust cycles, but the pet category as a whole tends to experience steadier growth.”
Steady growth may indeed be what some retailers are looking for as sales continue to decline. Department store Kohl’s, which is in the midst of a turnaround plan, reported a 4.8% drop in net sales in the second quarter. Kohl’s does not break down how much of its revenue comes from pet products. However, the company said the pet category “delivered strong sales performance in the second quarter” thanks to additional space added to some stores.
“In the pet business, we expanded dedicated space for this category across the chain after a successful test in 50 stores last fall,” Tom Kingsbury, CEO of Kohl’s, said in a call with investors and analysts. “Our offerings in this space include items such as dog beds, cat and dog clothing, and pet toys.”
The meteoric rise in pet ownership during the pandemic has sparked demand for pet products and veterinary services. Several retailers have taken advantage of this trend by becoming a one-stop shop for pet parents. Walmart, for example, has been actively involved expand its pet product and offering services since 2021 and even launched its own premium private label pet food product called Pure Balance.
Just like any marketing investment, being too optimistic about the pet category can be risky. Liz Papasakelariou, North America consumer products industry leader at Publicis Sapient, said that to make room for more pet products, retailers must reduce their assortment in other categories .
“It would be interesting to see what spaces they give up for larger sections for pets,” Papasakelariou said. She added that shoppers might also feel put off by retailers eliminating other categories in favor of pet products. “As they deprioritize other (categories), you might lose some other traffic.”
Over the coming months, analysts said they expect retailers to continue to look at what other niche categories they can expand into, as they adapt to changing retail trends. clients. Papasakelariou said that if retailers’ investment in pets proves successful, they could further diversify their offerings by adding categories such as pet health and wellness.
“It’s a good testing ground for retailers to start thinking about diversifying their portfolio,” she said.