A (not so) funny thing happened on your way to success as a pet retailer. Our great national recession undermined consumer confidence, destroyed Americans’ invested savings, burst the bubble of inflated real estate values and thrust businesses large and small into financial jeopardy. Through no fault of your own, your thriving neighborhood pet store is now endangered, your loyal customers’ visits are less frequent as they find it more convenient (or more economical) to buy their pet necessities during their supermarket trips, and potential new customers are questioning the need to pay a little more for the pet food and supplies you carry, versus the prices at Wal-Mart or Target. So, what are you going to do about it?
Don’t Panic
Yours was a solid business that filled a neighborhood need before the economy went south and, with a few adjustments, it can continue to fill that need and prosper anew. But you have to acknowledge the change that has occurred, embrace the new reality and signal to your customers that you recognize the impact on their finances. You need to show them you are prepared to continue to earn their loyalty and help them care for their family pet in the style that they are accustomed to, but with an emphasis on affordability that may not have been part of the equation previously.
Don’t make radical changes in your store’s décor or in the physical placement of major product categories. Part of your appeal to your clientele is the familiarity, the comfort zone you provide for them and for their pets. Too much change too quickly is upsetting and may look like desperation to customers seeking reassurance and the safe haven of their weekly shopping routine. You’ve worked hard to create the image you enjoy in your customer’s eyes; don’t abandon that image. Don’t lose that emotional bond with your customers; instead, capitalize on the relationship by assuring them that you’re there for them, that you’ve got solutions to their pet needs, right where they’re used to getting them.
In attempting to stimulate a lift in sales, many companies make the mistake of morphing into something they’re not. This alienates their customer base by sending mixed signals and eroding the customer’s confidence in where they are spending their shopping dollars. For example, an upper- to moderately-priced pet store that suddenly discounts products broadly to generate sales volume is confusing its customers and opening the door to concerns about product quality or even the possibility of the retailer going out of business altogether.
Similarly, bringing in quantities of lower-quality promotional products to hit “special purchase” price points in an effort to drive short-term sales is often a mistake, for it substitutes a lower value item for the in-line product the customer would likely have chosen from your regular assortment, it calls un-needed attention to the comparatively higher regular prices you have already established and it usually results in customer dissatisfaction when the inferior quality item fails to perform as expected.
Less is More
It is a far better strategy to offer only a limited number of off-price items from the regular assortment for a specific time period for a few important reasons. First, you will enjoy enhanced sale credibility, since the comparable regular-price value for the items has already been established in your store. Second, you instill “buy now” urgency in customers, since the sale is only for a limited time. Third, you retain the margins on the other items in your customers’ purchases by not discounting multiple items across the board.
A series of limited-time offerings can be strategically presented as a “Weekday Recession Special” program, which will protect and maintain your image as a better/best pet retailer that delights its customers with occasional great savings on products they really need, even in these difficult times. Better still, you will drive additional sales on lower-volume weekdays and avoid discounting your Saturday/ Sunday regular business base.
You’re Not Alone
If your business has slowed, so has the rest of the pet sector. Your sales reps or distributors have felt the slowdown, too. Once you’ve identified the items or categories you think would work best as part of your new “Weekday Recession Specials,” call your salesman and ask if he wants to participate with a temporary cost price reduction to drive incremental unit sales, which will prompt a quicker reorder.
Do not let him talk you into any “special purchases” of items outside your existing assortment; as I mentioned, this strategy can confuse customers and usually works best for the supplier, helping him clear out old unproductive inventory at your expense, muddying your value story and obscuring your basic assortments.
This simple approach–giving customers an opportunity to buy a series of a few great, familiar products at compelling prices–in addition to the store’s great product assortment and superior customer service will ensure that customers are delighted with the store and will repay you with their loyalty. Suppliers will see that you are not sitting on your hands, waiting for things to get better. You are taking decisive action to drive your business, and they will compete to supply you with great deals to be a part of your “Recession Specials.” This is a truly a win-win-win opportunity; one which will see you through even these uncertain times.
Jim Alvord is the owner of JBA Marketing, Inc., which provides pet industry consultation for product development, packaging and sales marketing strategies to manufacturers and retailers. He has been a career senior merchandising executive at department, discount and specialty store retailers, most recently at Petco Animal Supplies.
Reprinted from PetBusiness.com-3/1/10.