Michael Stumpf is a consultant in community planning, economic development, and market analysis, based in New Berlin, Wisconsin.

1

Place Dynamics

Pet Friendly? Why Catering to Pets Makes Cents By Michael Stumpf, May 2008

here are an estimated 71 million pets living in nearly two-thirds of all households in the United States. While this is substantially

more than in the past, in both the number of pets overall and the percentage of homes that shelter them, the more important story here is in our rela-tionship with our pets. Pets are no longer viewed as simply an animal. They have become a member of the family. That change has had a powerful im-pact on how we relate to our pets, what we do with them, and how we spend to support them. Businesses and communities that realize this have a new opportunity to use this information to in-crease their bottom line.

According to a recent survey by the American Animal Hospital Association (AAHA), 94 percent of people believe their pet has human-like person-ality traits (an a majority of people would prefer to be stranded on a deserted island with their pet in-stead of their spouse!). As this emotional bond with our pets has grown we have projected our own desires and aspirations onto them, reflected in our spending on pet foods and other products, veterinary care, and grooming. Dog owners, for instance, increased their spending by 38 percent between 1997 and 2002.

The American Pet Products Manufacturing Asso-ciation estimates that consumers spent $41.2 bil-lion on their pets in 2007. Spending in 2008 is ex-pected to top $43 billion. About $10 billion of this will be spent on pet supplies. Food purchases are the biggest expenditure ($16 billion) and just like in the human market, natural and organic pet food is one of the fastest-growing segments, especially after pet food contamination scares in 2007.

This certainly presents an opportunity for retail-ers. While the market is dominated by large com-panies like Petco and PetSmart, there are count-less smaller chains, independent retailers, and service providers who have enjoyed the trend. Many of these businesses are found in traditional downtown and neighborhood business districts.

Other retailers have cashed in by carrying a selec-tion of items catering to pet owners. Grocery stores are one example. Food accounts for the largest share of pet purchases, and AC Neilsen re-search has shown that parents of pets typically spend 16 to 27 percent more at the grocery store than other customers. Pet products can be found in stores as diverse as Walgreen’s, Home Depot, and Old Navy.

T

2

Place Dynamics

Is it a surprise that pet products sell well in tour-ist-oriented destinations and specialty districts? These stores, including pet bakeries and other pet product retailers (but also stores that simply carry a selection of pet products in addition to their typical merchandise) appeal to a desire to pamper our pets. At the same time we will pick up me-mentos for ourselves, we’ll pick up something to take back to our four-legged kids to let them know we were thinking of them.

Beyond simply buying souvenirs to take home to our pets, two-thirds of the respondents to the AAHA survey indicated that they traveled with their pet. A total of 14 percent of all trips in the United States are made with pets. Business districts and tourist desti-nations might do well to give some thought to how they can capture these travelers’ business.

Hotels are an obvious candidate to reach out to travelers with pets. Chains like Comfort Inn and Holi-day Inn typically allow travelers to bring dogs and cats, and a growing number of hotels are taking it a step further, providing fenced exer-cise areas and other amenities in attempt to win customer loyalty. (For those who leave their pets be-hind, there are a growing number of pet hotels and spas.)

While a majority of pet product retailers allow animals in their stores, in states like Colorado it is not uncommon to see dogs accompanying their humans into almost any kind of store. Consider Fashion Island, a 1.2 million square foot mall in Newport Beach, California, where pets are even welcome in stores such as Bloomingdale’s and Neiman-Marcus. A simple accommodation like this can go a long way toward enhancing the cus-tomer’s experience and generating return traffic.

Shopping areas can help to create a more pet-friendly environment, whether for tourists or the nearby resident who may want the company of their pet while shopping. Pet-friendly attitudes may be more significant in mixed-use districts with housing, offices and other businesses. In ad-dition to needing to provide facilities for resident pets, about one in four people bring their pet to work at least once per week and also need places to walk their pets.

Features like grassy areas for playing, shaded places for pets to rest, pet-accessible drinking fountains, and waste disposal stations all signal that a commercial area welcomes pets. Cabela’s, for instance, provides kennels and exercise areas at some of its store locations. Even if dogs are not allowed in the store, their guardians can feel good knowing that they are not trapped in a hot car. As-sured of their pet’s safety, they are likely to spend more time shopping.

With record retail construction in recent years, followed by the current economic slump, retail competition is getting more fierce. Stores need to identify new sales opportuni-ties while center owners or business districts need to take measures to create a competi-tive advantage. Embracing and responding to lifestyle trends such as our love of pets is one way that this can be accom-plished. O

© 2008 Place Dynamics