Pet care may not be the first thing that comes to mind when you think about the rise of online shopping in Australia, but this niche sector has been growing rapidly for the past few years, thanks in part to shipping software innovations that have made shipping bulky items, like large bags of dog food, more economical.
According to a recent report by IBISWorld, the online pet food and supplies market grew 17.9% a year on average between 2015 and 2020 to $485.5 million in annual revenue. And it’s set to reach $655 million by 2025.
But while the number of pet owners shopping online may be growing, so is the competition, as bricks-and-mortar pet stores launch e-commerce sites and new pureplay providers continue to pop up. Retailers in this category also need to contend with slim profit margins and high capital requirements.
Despite these challenges, there are still plenty of opportunities to explore. Here are a few ways you can stand out and succeed among all the other pet shops online.
Provide a paw-some customer experience
As an online business, it goes without saying that your returns policy and customer service need to be exceptional. But looking beyond this, most pet owners see their fur babies a part of the family, and if you treat them the same way, you’ll quickly build a devoted following.
Consider how you can surprise and delight your four-legged customers with special snacks and treats in their online orders and educate their human counterparts around pet health, training and other complementary topics to your core product.
Lean into the premiumisation trend
There’s a growing market for premium, healthy pet food, luxury designer accessories and even some products that are reserved for humans, such as health insurance. It’s all part of the premiumisation trend driven by devoted pet parents with lots of discretionary income to spend.
Retailers and brands that lean into this trend not only stand to make a higher margin, and they can also differentiate themselves from the supermarket brands, which hold the biggest share of the overall pet food market.
Check out more retail trends for 2021.
Consider a subscription-based model
Subscription-based businesses are a good fit for this category, since most purchases involve pet food, which is a recurring purchase. If you need further convincing, just look at the dominant e-commerce player Pet Circle. It is a subscription-based business and was expected to reach $260 million in revenue last year.
While Pet Circle primarily sells pet food, the options for subscription-based businesses are virtually limitless. You could offer diet meal kits for dogs, treat boxes containing high-quality toys for cats, or personalised boxes containing medication and wellbeing products for pets.
Convenience is key with subscriptions, so to succeed in this space, you need to ensure that the delivery experience is seamless.
Focus on shipping as a differentiator
No matter what your business model or product offering is, if you’re selling online, then shipping and delivery needs to be a key area of focus. Traditionally, online retailers have struggled to meet customers’ expectations on speed and price when shipping bulky items like large bags of dog food, or heavy boxes of cat food.
But thanks to multi-carrier shipping software like Shippit, which automatically gives online retailers the best rate for every order based on the size and weight of the item, shipping speed and delivery address, it’s possible to provide a great last-mile experience in the pet care category.
Not just interested in shift in buying pet supplies online? Take a look at the trends in the homeware industry.