As much as 80% of respondents will shop for Christmas gifts for their pets. Top considerations for the decision were the consideration of pets as being ‘part of the family’ (77%), not wanting their pets to feel left out (40%), and enjoying their pets having ‘something to unwrap alongside the rest of the family’ (33%).

According to the survey, 37% of pet parents in London buy their pets as many presents as their children.

Nearly a third (32%) of respondents reveal they plan to spend more on their pets this year than in the last 5 years. Gen Z pet parents between 18 and 24 years old were found to be almost 3 times more likely to spend money on gifts for their pets than owners above 65.  

Who are the biggest and lowest spenders? 

According to the survey, British pet parents will spend an average of £27.70 ($35.8/€32.1) on their pets this holiday season.

Londoners are expected to splurge the highest with £47.30 ($59.9/€54.8), followed by those who live in Birmingham at £36.60 ($46.3/€42.4). Nottingham and Southampton residents would be the lowest spenders, averaging £20.10 ($25.4/€23.3) and £18.80 ($23.8/€21.8), respectively.

Cardiff will have the most pet parents shopping for gifts (92%), followed by London (86%), Leeds (85%), Norwich (84%), Nottingham (83%) and Scotland (80%). 

Newcastle and Bristol (77% each) will have the least spenders.

Most popular categories

The survey predicts food and treats (63%) to be the most popular category this Christmas, followed by chew toys (47%) and cuddly toys (44%). 

Inputs broken down by city suggest Cambridge is anticipated to draw the highest percentage of buyers for food and edible items (77%). In comparison, cuddly toys will most likely be bought by Liverpudlian pet parents (61%).

The association’s Post-Pandemic State of the Industry Survey 2023 concludes that its members hit a revenue of $94,563 (€86,095) in 2022, an increase of 37.6% from $68,699 (€62,547) in 2021, a year when COVID restrictions were in fuller force.

The number of visits performed increased from 2,849 in 2021 to 3,667 in 2022.

“The resurgence of travel, return of pet parents to work and increased number of pets adopted during the pandemic have all contributed to the increase in average pet-sitter revenue and households served,” says PSI President Beth Stultz-Hairston.

Adapting to client demand

In a conversation with GlobalPETS, Stultz-Hairston noted that the services offered by pet sitters have increased since the pandemic to adapt to client demand.

“From offering deep litter box cleaning packages to transportation to the vet or groomer, [PSI] adopted additional safety protocols, such as contactless dog walking or paperless payment and forms,” she adds.

According to Stultz-Hairston, professional pet sitters are already achieving unprecedented financial success, surpassing their pre-pandemic earning potential.

Currently, the average cost of a basic pet care visit in the US is $24.18 (€22), while a dog-walking visit costs $22.55 (€20.40).

Most of the services offered by PSI members are for cats (96%), dogs (94%), small animals (73%), birds (70%), freshwater fish (66%) and reptiles & amphibians (56%).

A new app

Arcaplanet took its relationship with its customers to the next level by implementing a new smartphone app when the online channel was growing.

The new tool aims to become an “inseparable companion for pet owners,” the company says. The objective is that the app allows customers to make purchases online (and re-order past ones) but also use the Arcacard customer loyalty scheme and receive coupons and personalized offers.

“The new app will allow the customer to not only purchase products on our e-commerce platform but also use the discount coupons in-store. Our loyalty program will become digital—we will no longer distribute plastic cards,” said Arcaplanet CEO Nicolò Galante in a recent interview with GlobalPETS.

Business and consulting firm Casaleggio Associati concluded that Arcaplanet was the most popular Italian e-commerce platform in November 2023, just after Zooplus.

In 2022, the company’s e-commerce business accounted for €40 million ($43.8M) of Arcaplanet’s revenue. This was 50% more than the previous year.

More stores

Despite online playing an important role in Arcaplanet’s ecosystem, the Italian pet retailer still holds in-store as its top priority.

2023 will end with 52 more stores than last year, bringing the total amount to 553. They also aim to increase their pet specialists to 2,900 by the end of the year.

“As always, in-store pet specialists are at the center of customer service, and the company is aiming for ever-increasing countrywide coverage to be closer to customers,” says the retailer.

Stores will also play an important role in 2024 when it comes to services as the company plans to expand its pet wash services from the current 82 locations to 100 next year.

The retailer will end 2023 with 300 new jobs and aims to add an additional 300 next year.

Pet insurance and vet business

Nicolò Galante admitted a few months ago to GlobalPETS that it was “a big opportunity” for the retailer to tap into the premium segment despite acknowledging that the approach to healthcare by Italian pet parents is still “extremely reactive.”

The Italian retailer acquired 3 veterinary practices in October, 2 of which were from the Happy Friends brand and one from Mypetclinic.

This year, Arcaplanet also launched an insurance scheme working with insurance firm ConTe.it.

Sustainability 

In 2023, Arcaplanet undertook a process to reduce its environmental emissions by around 50%, including the use of renewables. According to the company, 80% of their energy needs are fulfilled thanks to this kind of energy.

Next year will be dedicated to the circular economy, with the target to transition over 60% of its private-label dry food brands into recycled and recyclable packaging.

This year, the retailer tested a “new generation” of stores featuring reduced environmental impact and reduced energy consumption and forecasts to expand this concept to the entire network in the first part of 2024.

A sign of the segment’s potential is seen in the optimism that companies in the sector have for 2024.

Entobel

Entobel, a Singapore-based biotech company that produces insect-based ingredients from black soldier fly larvae (BSFL), recently launched its second insect production facility in Vũng Tàu province in Vietnam.

According to the company, the facility features 50 levels of vertical rearing, incorporating automation via robotics, cutting-edge sensors and data analytics that enhance productivity.

With an annual production capacity of 10,000 tons, it is expected to generate $25–30 million (€23–€28M) in revenue. “We hope to reach at least 50% of the capacity by the end of next year from the site,” Co-Founder Gaetan Crielaard tells GlobalPETS.

Entobel’s first production plant, established 3 years ago, helped the company understand the local market. Its second facility also caters to the regional market. Entobel’s priority is to expand within the country. However, other countries in the region, such as Indonesia, are also on its expansion map.

New funding in 2024

After closing a $30 million (€28.3M) funding round in 2022, Entobel plans to re-enter the fundraising market in the first half of 2024. “The Series C fundraiser will be bigger than the Series B. So, we want to go quite aggressively in terms of capacity increase”, adds Crielaard.

After Entobel’s first demonstration facility, the company decided to scale up the automation capabilities and facility size of the second Vũng Tàu site to reduce the product and labor cost per ton of produced insect meal. As Gaetan shares, the next step for Entobel would be to supply the volumes that the market needs and have an impact.

“We want to reach 100,000 tons of insect meal per year capacity in the next 10 years. And that’s why we need to raise funds to grow because it’s still a CapEx-intensive (capital expenditure) industry.”

Increasing demand

Entobel currently exports around 50% of its production for pet food applications. Its key markets include Australia, Japan and the US. Gaetan asserts that the market “is not yet ready to pay a huge premium for sustainability today.” However, the company is looking for potential distribution partners in developing markets like Japan.

The company also seems to hold a strong regional presence: “In Vietnam, we are able to offer [our insect meal] product at a price that is competitive against imported fishmeal,” and in the pet food market, Entobel’s clients “seem to be happy” with the offered cost value equation, indicating market competitiveness.

“We want to focus on what we’re good at producing: a quality insect protein at a competitive price,” Gaetan concludes.

Percuro

UK-based insect-protein pet food producer decided earlier in the year to push its production capacity and expand its portfolio into new markets after witnessing a 300% growth in its 2023 performance.

“Our ambition over the next 3–5 years is to capture 1% or $180 million (€167.4M) in revenue in the premium pet food market,” comments CEO Brett Vye.

Percuro currently offers 8 SKUs for the dry pet food market for puppies and adult dogs and looks forward to expanding its range of products to cats in the first half of 2024. The company told other media about their inclination toward the wet cat food market as it offers better opportunities than dry cat food.

The 2020-established company has raised £2.5 million (€2.9M/$3.1M) in funding to date. Percuro’s projected revenue for 2023 is reportedly over £1 million (€1.1M/$1.2M).

International expansion

Apart from its home base in the UK, Percuro is first targeting markets in Germany, the United Arab Emirates (UAE) and Asian countries such as Singapore, Malaysia, Taiwan and Japan.

Vye says that the US also presents a massive opportunity for the company. However, he cautioned that this competitive market requires a cautious and calculated approach. The company will begin distributing from New York when it enters the market.

On the other hand, the company achieved a net loss of $35.8 million from a profit of $2.3 million (€2.1M) in the previous year.

Chewy also revealed its 9-month earnings, reaching net sales of $8.3 billion (€7.7B), up from $7.39 billion (€6.86B) during the same period in 2022.

Net income was much higher over the 9 months this year at $5.3 million (€4.9M) compared to the $43 million (€39.9M) last year.

Canada and Black Friday

After announcing its international expansion to Canada in June, the Florida-based online pet retailer confirmed that initial customer demand “has been strong” and that the sign-ups for recurrent orders (Autoship) are “healthy.”

Chewy started operations in Toronto, the largest metropolitan area in Canada, and plans “to take a gradual and responsible approach to expanding [their] footprint.”

The company also stressed that shopping events like Black Friday are a considerable opportunity for businesses like Chewy. According to the online pet retailer, this year’s event was a success, as traffic and sales exceeded expectations across all categories.

Yearly guidance

Chewy has reviewed its full-year guidance to fall between $11.08 billion and $11.1 billion (€10.29B–€10.3B). Previously, the retailer had forecasted $11.15 billion to $11.35 billion (€10.35B–€10.54B).

“While we are confident in our ability to continue gaining market share and deliver attractive levels of profitability, our guidance reflects the continued macro pressures observed industrywide,” reads a letter to shareholders.

Analysts from Market Watch noted that shares in the company dipped by 8% after the earnings announcement and said that this year, there has been a huge decline of 48% in shares.

Leadership changes

David Reeder, currently the CFO at semiconductor multinational GlobalFoundries, will take on the role of Chewy’s new Chief Financial Officer (CFO) in early 2024. Current interim CFO Stacy Bowman will serve as Chief Accounting Officer.

CEO Sumit Singh said that Reeder is a “highly experienced” finance executive who has driven strong results across a range of complex industries.

Although he does not come from a pet background, Reeder has experience leading financial strategy and is well versed in the insurance industry, as he was CEO of Florida-based Tower Hill Insurance Group.

Respondents reported cutting back on veterinary care (55%), pet insurance (51%), dog food in terms of either quality or price (50%), doggy day care and walking services (46%) and even grooming (34%).

A smaller percentage of dog owners also cut back on treats (25%), toys (22%) and spaying or neutering (16%). According to the survey, only 1 in 10 respondents did not cut back on anything in particular.

Basic needs

The OnePoll survey concluded that more than 6 out of 10 respondents had delayed or cut back on basic necessities like food, housing, clothing and personal healthcare, leisure experiences like travel or events and home renovations due to the cost of caring for their dogs.

A similar percentage (65%) had sought financial assistance from friends and family, while more than half (57%) had considered rehoming their dogs. 47% had gone into or experienced debt.

A little under half (48%) had to delay or cut back on education development expenses, and 33% had taken on second jobs or pursued new opportunities to earn extra income.

Around half of the respondents reported spending between $51 (€48) and $200 (€190) per month on pet care. Only 2 out of 10 reportedly spend between $251(€231) and $500 (€460) each month.

Dogs vs. children

Almost 4 out of 10 of those surveyed opted to delay or refrain from having children in favor of owning a dog.

The OnePoll survey unveils that dog owners in the Northeast of the country made up the highest percentage of those who chose to own dogs over having children (61%) compared to those in the West (37%), Midwest (26%), Southwest (26%) and Southeast (21%).

Most (81%) respondents attributed this to a dog being easier to care for than a child. 74% said it was due to affordability, while 54% found dog ownership easier and required less planning.

Younger dog owners prioritized their pets when making housing decisions, with 78% of respondents aged 18–26 admitting their dogs played a role in decisions involving where they live.

This age group also ranked highest when it came to taking into consideration their dogs’ well-being when it came to making career decisions (88%), romantic relationships (80%) and taking advantage of travel opportunities (75%).

Value Hackers, Delightful Distractions and Wellness Pragmatists are among the global consumer trends shaping the Pet Care market in 2024.

Value Hackers

Responding to high inflation and escalating costs, consumers are resorting to cost-cutting behaviors, attempting to “outsmart the system” by adopting more creative approaches to stretch their money further. They are looking for alternatives like using reward points for payment and switching to private labels and discounters.

Manufacturers are addressing this trend by innovating with loyalty programs, early-bird rates, referral initiatives, and complementary services. Targeting price-sensitive consumers, retailers like Felleskjøpet in Norway are increasingly incorporating premium options within their private-label pet food and product lines.

Delightful Distractions

Consumers feel the urge to escape the burdens of their everyday routines and problems. Pets serve as the best refuge for moments of joy and relief. Businesses are adapting to support consumers with innovative products and services, helping them justify their purchases—our pets bring us joy, so any distractions linked to pets present an opportunity. Benefiting from this trend, treats and mixers for dogs and cats are among the fastest-growing pet care categories. Meanwhile, pet shops are increasingly offering pet services such as spas, salons, health and wellness centers, swimming pools and studios, providing consumers with new experiences for their beloved pets.

Wellness Pragmatists

Consumers are adopting a pragmatic approach to their mental and physical health, and due to the increasing humanization of pets, this trend is extending to the pet market. People are looking for healthy and functional foods for their pets, aiming to keep them fit, healthy and looking their best. Wellness pragmatists are moving away from time-consuming, multi-step processes that require a significant commitment. Instead, they are looking for easier, more practical options that can be seamlessly integrated into daily routines and deliver instant results. Consequently, functional foods, especially pet food supplements, are on the rise, providing health benefits with the highest convenience. Companies are innovating with personalized, nutrient-rich pet meal plans tailored to pets’ age, health status, and lifestyle to provide the most effective tools to make pets healthy.

Learn more in Euromonitor’s annual report, Top Global Consumer Trends 2024, which reveals emerging insights into consumers’ values and shopping motivations

Decline in overall pet population

With a general decline in purchases of pet supplies in post-COVID times, pet populations in the Czech Republic, Hungary and Poland remained stagnant in 2022, while in Bulgaria, Romania and Slovakia there was actually a slight decrease, but not amounting to more than 0.5%. In Ukraine, the war led to a 16% drop in the pet population, contributing to a 1.9% decline in the overall pet population of Eastern Europe.

Historically, Russia had accounted for nearly half of the pet care market in Eastern Europe, experiencing growth driven by the increasing humanization of pets and the expansion of the middle class. But the war in Ukraine has changed the dynamics, disrupting supply chains and prompting numerous market players to exit or curtail their operations due to the sanctions imposed on Russia.

Inflation and the cost of living

The performance of pet care in Eastern Europe has been impacted by inflation, which continues to put pressure on pet owners’ disposable income. The impact has been more severe in Eastern European markets compared to other regions as they were more reliant on supply chains originating in Russia and Ukraine.

On average, if you exclude Russia and Ukraine, the unit price of pet care products in Eastern Europe saw a 14% increase in 2022. The most significant rise in pet care product prices – at 22% in local currency – was noted in Hungary, with Romania following closely at 19%.

All pet food markets in Eastern Europe recorded lower growth rates in 2022 in comparison to previous years. The negative dynamics in the Czech Republic were also impacted by the inflationary pressure that caused increasing polarization between lower-priced options and higher-end varieties. And this greatly affected mid- priced alternatives.

In 2023, price increases have slowed down, with 10% growth in Eastern Europe (excluding Russia and Ukraine). It has led to partial market recovery in Hungary, the Czech Republic and Bulgaria, which recorded a higher growth rate in volume this year in comparison to 2022.

Meanwhile, in Poland, Romania and Slovakia pet care prices are still high, with price growth rates almost at the level of 2022. Inflation keeps putting pressure on these markets, which are witnessing a continuous slowdown. According to Euromonitor’s Voice of the Consumer: Lifestyle survey, in 2023, 39% of the respondents in Romania and 29% in Poland are going to put money into savings for next year.

Development of e-commerce

The rise of e-commerce is also shaping the pet care market in the region. Online platforms offer convenience and a wide range of products, allowing pet owners to access a variety of options for their pets. After the e-commerce boom in 2020, when online sales in pet care in Eastern Europe grew by 50%, the channel continues to grow – though at a much slower pace.

Across the Eastern European countries, Poland has the highest share of e-commerce in pet care sales, with more than 1 in 5 products for pets sold online. As the market is already quite mature, its share is expected to remain stable in the future, with no significant growth. On the other hand, Bulgaria and Hungary have a very low share of e-commerce sales in pet care. Online in these countries is, in general, not a common channel for groceries.

Despite the fast development of e-commerce, offline remains the main sales channel in Eastern Europe. After the pandemic, consumers have started to come back to physical stores. Omnichannel is increasingly gaining ground, combining the advantages of e-commerce and offline channels. Further omnichannel adoption by companies in the pet care sector is increasingly providing a seamless shopping experience for pet owners.

Humanization drives the premium segment

In 2023, in value terms, the pet care market in Eastern Europe is expected to grow by 15% to reach €11 billion ($11.6B) and cover 6% of global sales. In the coming years, the markets are expected to experience a gradual recovery, benefiting from easing inflationary pressure and the growing trend of pet humanization, which is driving demand for premium options in this region too.

During 2022, the premium sector recorded relative resistance during the difficult economic times, benefiting from high brand loyalty and higher price elasticity of demand from consumers in higher income groups. Declining disposable income led to a decrease in the mid-price sector, as consumers switched to cheaper options. In volume terms, economy pet food was the fastest growing segment in 2022 in Eastern Europe, but the premium segment has almost reached the same pace in 2023 and is expected to regain leadership in the rate of development in 2024.

Markets to watch

Over the next 5 years, Bulgaria is expected to show the fastest development in Eastern Europe, both in volume and value terms – thanks to increasing demand for premium pet food plus treats and mixers. The Romanian market is another area with growth potential in Eastern Europe, driven by the demand for premium cat food, as well as cat treats and mixers. Cats are increasingly popular in the country, as they are an easier and cheaper type of pet to keep in a small apartment.

Healthy and functional food

With consumers looking to improve their pet’s nutrition, health claims are becoming one of the main driving forces of the premium segment. According to Euromonitor Claims and Positioning data, every 5th pet product in Eastern Europe has a ‘high protein’ claim on its packaging. ‘Good source of vitamins’, ‘natural’ and ‘no artificial preservatives’ are also among the top claims of pet care products.

Healthy food and functional ingredients are gaining greater importance among pet owners and are expected to drive the future of the pet care market. As pet care products increasingly mirror trends in the human market, due to the growing humanization of pets, these factors are likely to play a significant role in shaping the industry in Eastern Europe.

Premiumization and generic reign supreme

Today’s pet store aisles – whether virtual or in a bricks-and-mortar establishment – are filled with countless options, ranging from specialty foods to address specific health concerns to the tried-and-true mainstay brands known for their quality and nutrition.

Premium cat food and basic (or generic) cat food continue to dominate as the food cat owners most often purchase. They are also the 2 types of food cat owners most often feed their feline family members. While premium cat food edges out basic/generic food purchased by most cat owners (40% versus 38%) in the past 12 months, basic cat food is fed most often by more owners (29% versus 27%).

When it comes to the food people give their pets, most cat owners report feeding their cats dry food most often and canned food occasionally.

Special attributes in cat food

According to the 2023–2024 APPA National Pet Owners Survey, half of all cat owners say they have purchased cat food with special attributes, with the most popular including non-GMO (15%), environmentally friendly packaging (14%), human-grade ingredients (12%), clean label ingredients (12%) and functional ingredients (11%). Very similar patterns are seen when cat owners are asked if they plan to purchase cat food with any special attributes.

Whether a veteran ‘cat lady’ or a younger adult entering the cat-owning lifestyle, the vast majority of cat owners purchase treats for their pets (91%). This current percentage – or 9 out of 10 cat owners – is the highest ever recorded by an APPA survey.

Generational differences in cat ownership

Speaking of types of cat owners, the APPA National Pet Owners Survey uncovered several different behaviors and preferences among different age groups. A significantly higher percentage of older cat owners (Gen X and baby boomers), for example, purchased basic cat food and premium cat food than younger cat owners.

On the other hand, younger cat owners (Gen Z and millennials) are more inclined to purchase a wider variety of cat foods such as natural, organic, raw, specialty, and food with added pre/probiotics than older cat owners. Gen Z and millennials are also much more likely than Gen X and baby boomers to purchase cat food with special attributes.

Gen Z, in particular, favors non-GMO and environmentally friendly, while millennials prefer food that is non-GMO, made with human-grade ingredients that is sold in green packaging. Younger cat owners are more likely to try different forms of cat food than their older counterparts, and 94% of both Gen Z and millennial cat owners purchase treats for their pets.

Where cat owners shop

From local pet stores down the street to online outlets like Chewy and Amazon – and everything in between – cat owners have a variety of avenues to purchase food and treats. But which of these channels are they frequenting?

Supermarkets are the outlet of choice for 42% of cat owners to buy cat food, up slightly from the 2021–2022 APPA National Pet Owners Survey. Discount stores, online-only outlets and pet superstores make up the second tier of outlets. Of this group, online-only outlets are the only option that saw an increase from the previous survey.

In addition, cat owners are indicating a shift toward purchasing cat food more often. The percentage of owners who buy cat food every 2 weeks has increased, while those who purchase every 2 to 3 months have decreased.

As much as 39% of cat owners report purchasing cat food every month, unchanged from the 2021–2022 survey.

Key takeaways

In thinking through how retailers, pet food and treat companies and other pet industry stakeholders can best position themselves with burgeoning cat owners, Gen Z and millennials, it is clear variety is important. This includes a range of product offerings to meet both what pet owners are looking for and what their feline family members need.

Whether it is natural ingredients, green packaging or generic options, younger cat owners want choice when it comes to the type of food and treats they are purchasing.

In line with this, cat owners are looking for variety and choice around where and how to purchase cat food and treats. Be sure to use the channels pet owners are frequenting – whether in-store or online, among others – to reach repeat and potential new customers.

All of these trends are important to keep in mind as you shape and refine business plans, solidify your online presence and determine how to best supply consumers, especially younger cat owners, with their preferred pet products. Doing so will not only help your business succeed and grow in the short term, but it will also help prepare for the future, as many of these trends are here to stay.

DTC pet food market

As companies look to enter the DTC market for pet food, there are a number of ways to expand their business online, including selling through e-tailers, working with marketplaces, or setting up their own DTC channel. Therefore, it is important to align the approach with the specific business needs.

A brief overview

By 2032, the global DTC pet food market is expected to reach $18.6 billion (€19.7B), up from $2.1 billion (€2.22B) in 2022, with an expected yearly increase of 25.1%.

This global DTC growth can be attributed to several factors:

• the demographic split of pet owners is skewing younger (millennials and Gen Z consumers account for 49% of pet ownership nowadays)
• owners are placing an increased priority on pet health and wellness
• more than half of the world’s population is estimated to own at least 1 pet.

Opportunities

Younger consumers are generally more active online and more open to establishing direct connections with brands. The skewing demographic among pet owners therefore offers growth opportunities for pet food companies. The most successful DTC pet companies create unique, value-added experiences for pet owners that are not available in stores, through strategies such as recurring product subscriptions, personalized food and product offerings, and a superior digital experience.

Subscription-based models

Pet product subscriptions offer a flexible yet managed way to guarantee replenishment of pet owners’ favorite items, and the ability to customize DTC orders appeals to a specific niche in the industry. In the US, HelloFresh recently capitalized on this opportunity by launching personalized meal subscriptions for pets through its Pets Table brand.

A subscription model is a great way for pet companies entering the DTC market to manage a smaller set of products while increasing the likelihood of repeat purchases. Subscriptions also tend to provide unique and exclusive benefits, such as free delivery or discounts, to encourage pet owners to buy online over traditional in-store purchases. Customization can be one way to differentiate from the competition.

Personalized food and product offerings

Premiumization in pet food and other pet products has grown in recent years and shows no signs of slowing down. Pet owners seek the best for their pets – and that often means turning to human-grade food in the form of fresh, frozen and freeze-dried varieties. Several digitally native brands including Maev, Ollie and Freshpet have tapped into this trend, offering a personalized diet based on the pet’s life stage and health needs.

Humanization of pets is also fueling the desire for accessories and products tailored to each pet. Pet owners enjoy ordering personalized collars, bowls, pictures and other items for their furry friends. For companies, these items can serve as add-ons to help grow the online business footprint.

Controlled and user-friendly experience

The biggest benefit of owning the DTC experience is the ability to control the brand messaging to best resonate with pet owners and stand out from the competition. For example, a growing number of pet companies are testing the use of ‘petfluencers’ to develop their brand’s messaging. Petfluencers serve as brand ambassadors, portraying the benefits and usage of products in social media channels to attract like-minded pet owners. A survey by OnePoll on behalf of Mars Petcare showed that 30% of pet owners follow petfluencers on social media platforms.

Additionally, it is imperative to create a user-friendly online experience for customers. Pet owners are more likely to consider purchasing products online when they have access to detailed information about the brand and products. Moreover, prioritizing a superior pet owner experience through clear Frequently Asked Questions (FAQs) and contact methods on the website will reassure pet owners that the brand provides sufficient support.

Not unimportantly, these touchpoints across the DTC website (and associated social channels) can help to capture valuable first-party data that translates into insights to drive future business decisions.

Challenges

Before diving into the DTC pet market, it is critical to assess the financial, technological and operational investments to identify the possible level of ownership over the end-to-end process. The biggest challenges companies face are often related to logistics and marketing execution.

Warehousing, shipping and logistics management

Manufacturers should keep in mind that supply chain logistics are a critical first step when expanding into a new channel or entering a new market. Home delivery is more expensive than wholesale deliveries to retailers, and most pet owners expect to receive free shipping.

Selecting a distribution partner or building logistics capabilities close to a dense urban population will make it easier to reach the highest number of pet owners while keeping shipping and fulfillment costs down. This is how Chewy opted to cost-efficiently expand operations into Canada, for example.

Investment in technological infrastructure

Developing a DTC channel typically requires investment in new technologies to enable ordering, engagement and fulfillment. Given the steep upfront costs and recurring fees to manage the backend systems for an online shop, companies need to be intentional about investing in DTC.

Could omnichannel selling be an option to test and learn before making a bigger investment in the necessary DTC infrastructure, such as advanced enterprise resource planning (ERP), payment and tax options, customer service and order fulfillment? Selling products online through partnerships with leading bricks-and-mortar or e-commerce retailers could be more cost-effective in the near term.

Looking ahead

Expansion into DTC presents numerous opportunities for pet food companies to both establish an incremental revenue stream and build deeper relationships with pet owners. Offering a DTC experience can also open doors for emerging brands to reach pet owners online in regions where there is limited retail store distribution.

Before entering the market, however, it is necessary to have a clear understanding of the business goals in order to evaluate whether owning the DTC model is right for the company in question. A ‘pet owner-first’ mindset can help to drive the critical decisions around investment in technology, operations and resources.