Pinching pennies? Not necessarily when it comes to pet owners

Emilie Wilson's menagerie includes 15 ferrets, two dogs and four cats, including a hefty grey feline named Tonie Stewart who rides in style inside a pet stroller during family outings.

Wilson spent US$300 on Christmas gifts for her brood last year and figures she'll exceed that sum this year. And despite the recession-like economy, the suburban Chicago woman has no plans to scale back pet presents anytime soon.

"I couldn't care less if there's anything under the tree for us, as long as there's something for Tonie," she said.

Retailers may be worrying about the possibility of the worst fourth quarter in generations, but those in the pet products industry are finding themselves in a veritable oasis among much of the gloom of American business. Companies that sell everything from organic dog treats to couture-inspired pet toys say business is up even as economic indicators show shoppers are pinching pennies during one of the worst downturns in decades.

"I think they're buying nice dog collars instead of remodelling their kitchen," said Fiona Tavernier, whose Lollypadoodle business near San Francisco sells wool stuffed dog toys and is going strong.

It may sound counterintuitive - even to some in the pet industry who say they're surprised business is robust - but experts say many pet owners are as dedicated to their animals as parents are to children. And that means they're willing to sacrifice on themselves before trimming back on their four-legged friends.

"You know, for some families, the pet comes first," said Carol Perkins, president and co-founder of Harry Barker, a Charleston, S.C.-based pet toy company whose sales are up 40 per cent this year. "The dog goes to the vet first and the dog gets organic food. Maybe some people will cut back on a dog bed, but they'll still buy dog treats, toys and collars and leashes."

The American Pet Products Association estimates Americans will spend US$43.4 billion this year on their pets - a figure that includes everything from treats to training - despite the dramatic slowdown in discretionary spending. That's 26 per cent higher than what U.S. consumers spent in 2004, the group said.

Market researcher Euromonitor International, which tracks sales of pet food and accessories but excludes the cost of animals, grooming, training and other expenses, puts this year's animal expenditures at US$23.9 billion.

But the group forecasts the segment's sales are still on pace to grow more than 13 per cent by 2013.

"It's definitely more resilient than most categories tied to discretionary spending," said Morningstar analyst R.J. Hottovy. "It's one of the last categories (people) cut out of their budget."

Backing that up is a poll earlier this year in ShopSmart, a publication from Consumer Reports, which says female shoppers are more likely to buy cheaper brands of everything from medication to milk, but are digging in their heels when it comes to switching to less-expensive pet food and personal care items.

Some parts of the pet food industry, particularly gourmet and organic pet food, will likely be even more insulated than the sellers of pet carriers, clothing and outdoor gear.

That's because many pet owners, who upgraded their kibble after contaminated pet food killed or sickened thousands of animals last year are leery of switching back, a move that could cause digestive problems.

"Once people have their pets on a certain pet food, there's health risks to switching over to another," Hottovy said. "As soon as they've moved up to the premium brands, they're kind of locked in, so it's hard to trade down."

Still, there are signs that the most extravagant expenses - such crystal bowls and custom-made pet beds - may be sidelined amid growing economic uncertainty.

"Gone are the days when people would buy $100 collars and fake fur," said Claire Chew, of Venice, Calif., who founded Luxepets, a line of pet keepsakes.

American Pet Products Association spokeswoman Leah Nelson said the group doesn't release industry sales projections, but that it is "eyeing the future" with caution.

That's why Paige Ormand, the owner of the Doggy Style Pet Shop in Chicago's Wicker Park neighbourhood, is ordering more products that are less expensive - for example, $5 toys instead of $20 models.

But she's not removing expensive gifts from her store shelves, either.

"This industry is way more insulated than other businesses," she said. "But I wouldn't say it's recession proof."

Fresh up a Pet Store

We don’t know how deep the economic recession will cut or how long it will last, but one thing is certain: This is no time for pet retailers to hunker down and adopt a bunker mentality. Do that and risk losing the edge that can make your pet store competitive when good economic times return.

That’s what retail and pet industry consultants are advising pet retailers. “It’s like the old adage: when the going gets tough, the tough get going,” says Jim Dion, president of Dionco. Inc., a Chicago-based retail-consulting company.



Now is the time for pet retailers to get aggressive and try things that can push them ahead of their competitors, and improving your store’s look and the image it projects is a great place to start. “A spruce up or even a new look may be the strategy that can help pet retailers excite their customers or even keep them,” says Dion.

The remarkable news is that remodeling your store can boost sales, whether there is a recession or not. “In tough times, a retailer needs to project a positive image to their customers,” explains Chris Miller, president of the Garden Grove, California-based design/building firm Pacific Store Designs Inc. “A fresher look speaks volumes to your customers. You are saying to them that times may be tough, but I’m doing okay. You can have confidence in me. A look of doom and gloom in a down economy can almost be a self fulfilling prophecy.”

Some studies show that a remodel can actually boost sales by as much as 20 to 30 percent. “Remodeling can revive your store and make it an exciting place to shop in again,” explains Jami Dolinski, marketing manager for the Cerritos California-based CASCO Group, a leading provider of acrylic aquarium displays and installations. “Customers will not only want to come to your store, they will stay longer.”

Since the current state of the economy is impacting every industry, a remodel may be more affordable than you think. “By remodeling in the current recession, you can save money by taking advantage of today’s prices,” Miller explains. “For instance, steel prices have dropped 25 percent and gas prices have fallen. We don’t have many of the surcharges we once had. Also, labor is more competitively priced in tough times.”

Of course, a substantial remodel will probably still cost a few thousand dollars or more, but the store’s appearance can be freshened up for just a fraction of that. Take on what you can afford. What’s important is that you answer the call to action.

“Even if you are hanging on by your fingernails, there are some basic things you can do to bring back excitement into the store,” Dion says. “Merely adding a fresh coat of paint can brighten up a store and make a world of difference.”

Take a look around the store and let your senses go to work. Can you detect anything that could turn off customers?

Don’t be afraid to seek other perspectives. Meet and brainstorm with employees, family, friends, mentors and advisors, as well as customers. Ask them for ideas or a frank assessment as to how you can improve the image of and bring excitement to your pet store. The more ideas received, the more options you will have to give your business that edge.

To gain even more feedback, train employees to be the eyes and ears of the store while they help freshen up the sales floor. “Employees hear a lot of stuff that indicates what customers think of your store,” Dion explains. “Customers are not experts at retail management, but they can get vocal when something bothers them.”


Keep It Clean
The first place to look when assessing a store’s image is cleanliness. “The pet supply store I use is conveniently close to my house, but sometimes it’s dirty,” Dion reveals. “How many other customers notice that and are turned off? It doesn’t take much money or effort to keep a pet store clean.”

Miller advises making each employee responsible for keeping a pre-determined area of the store clean. “You can take a photograph of a clean module and display the photo in the employee room,” he explains. “You’ve established a non-negotiable standard for how the store must look before the employees go home at night.”

Do you smell anything foul? Customers understand that a pet store, by nature, may have certain smells, but are the odors out of control? Use an exhaust system to air out the store. “Most retailers don’t bother to air out their stores,” Miller explains. “Or when they do, they use an inefficient exhaust system. A good exhaust will cost from $5,000 to $20,000, depending on the type of store. It will be less if you don’t have live animals.”

In a tough economy, the look and attitude of a store’s employees can be just as important as the product and services provided. And freshening up the workforce will cost no more than a song.

Make every worker wear the same type of clothes. “I’ve noticed that a growing number of pet retailers have relaxed their dress codes,” he explains. “But how an employee looks and acts goes a long way in making your average customer feel comfortable.”


Sprucing Up Signage
Another area that should be carefully looked at is the store’s signage. Are the signs confusing or boring? Handwritten signs look unprofessional–discard them. You can simply print signs from a computer or use pre-printed signage supplied by vendors.

“Use signage to engage customers,” advises Nancy Reed, marketing director for Companion Habitats Inc., a Colorado Springs, Colo.-based company that provides animal fixtures for the retail industry. “For instance, if you have a sign about lizards, include a short paragraph on the sign about their habits.”

Reed suggests that retailers go a step further, particularly when trying to engage younger shoppers who are easily bored by traditional merchandising strategies. “They are the buyers of the future, and we know they are into technology. So use interactive displays to engage them,” she says.


Clear Out the Clutter Are your aisles cluttered? Do they make you feel like snake when trying to navigate them? Keep products in an orderly manner and off the floor. Taking photos of the front, middle and back of the store and analyzing them can provide some valuable insight in this regard. “What you see will shock you,” says Dion. “Many retail stores are too cluttered. The products on the floor really belong in the stock room.”

According to Diane Benson Harrington, a business writer who publishes articles that help small business owners with their most pressing management problems, narrow aisles and boxy configurations give a store a discount-store feel. “Open floor plans with a curvilinear sensibility encourage shoppers to linger and move around the store,” Harrington explains.

You can control customer traffic flow by delineating a walkway through the store. Known as the ‘main drive aisle,’ this pathway can create what Miller describes as the “yellow brick road effect.” He explains: “A pet retailer can put a red main drive aisle through the store, similar to what the Target discount store chain does to help move their customers smoothly. It’s not costly and it works very well. I’ve done 3,000 stores with this principle in mind, and I have not had to make any changes.”


A First Impression
Don’t forget that the front of the store is where the customer gets a first impression. “Make your window display as simple but as inviting as possible,” says Dion, also noting that the first two to three feet of the sales floor should be clean and open.

Miller agrees, explaining that customers will form an impression of a store within two or three steps inside the front door. Woe is the future of the pet store where the music is too loud or jarring, the aisles too cluttered or the employees too sloppily dressed.


Shed Some Light
Lighting is a key element in remodeling a store. The three keys to good lighting are atmosphere, attraction and appeal. A store needs to use different types of lighting, depending on the objective.

“To enhance the general shopping experience, use florescent full spectrum color bulbs,” Miller says. “Accent or track lighting should be used to highlight window displays or endcaps and should be placed where you want the customer to spend more time. Track lighting is used for special purposes, such as to highlight animal enclosures or for showcases or neon signage. Track lighting’s psychological goal is to trigger impulse buying.”

The above remodeling tips are inexpensive ways to spruce up a store and freshen its image. “You don’t need to do major remodeling overhaul, but it’s important that pet retailers be proactive and do everything they can to attract and keep customers,” Dolinski say.

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Pet theories

American researchers have discovered that owning a pet can significantly reduce your risk of a common cancer.

The body of evidence supporting the notion that pet ownership is good for your health grew even fatter this month. A new study, published in Cancer Epidemiology Biomarkers and Prevention, found that keeping animals can cut the risk of developing the relatively common cancer of the immune system, non-Hodgkins lymphoma, by almost one third.

"The idea that pets and good health are associated goes back 20 years or more," says Dr June McNicholas, a psychologist who has researched the relationship between people and their pets. The catalogue of health plusses can't all be attributed to regular dogwalking however. When a study suggested that people who own pets have better cardiac health, says McNicholas, "one of the significant factors in people recovering well from a heart attack was owning a pet, but it wasn't just dogs. It applied equally to cats." Here are some of the many ways in which pets have been found to strengthen our constitutions.

Pets are good for cardiac health

The Baker Medical Research Institute in Australia studied 6,000 people and found that those who kept animals had lower blood pressure and lower cholesterol - and therefore, a lower risk of heart attack. Another study, conducted at the University of Minnesota and published earlier this year, concluded that cat owners were 40% less likely to suffer a fatal heart attack than people who didn't have a cat. Adnan Qureshi, the neurology professor who led the study of nearly 4,500 people, said he believed that people who stroked their cat experienced less stress and anxiety and therefore were at a lower risk of developing cardiovascular diseases.

Pets boost the immune system

This month, a study by researchers from Stanford University and the University of California found that regular exposure to a cat or a dog could reduce one's chance of developing non-Hodgkins lymphoma. It is thought that exposure to allergens - from cats and dogs - could boost the immune system.

The immune-boosting power of pets is something that McNicholas has also investigated. In 2002, she studied 256 primary school children and found that children aged from five to seven from pet-owning households attended school for three weeks more than those who didn't. "We found that children brought up with pets had more stable immune systems. There have been other studies which suggest that children born into a household that already has a dog or a cat are less likely to develop asthma. Moderate exposure [to allergens] will prime the immune system." Meanwhile, a study in Japan found that pet owners over the age of 65 made almost a third fewer visits to their GP than people the same age who didn't have pets.

Dogs can act as a health warnings

After 20 years working for the charity Hearing Dogs for the Deaf, Claire Guest was struck by the story of a colleague whose dog had repeatedly sniffed at a mole on her leg before it was diagnosed as a malignant melanoma. Guest went on to work with researchers at Amersham hospital in Buckinghamshire, to discover whether dogs could be trained to detect bladder cancer in urine samples, and found that they could.

Similarly, in 2006, a cancer research centre in California published a study which found that ordinary household dogs could be trained to detect early breast and lung cancer between 88% and 97% of the time, by sniffing people's breath - it is thought that these particular cancer cells give off miniscule traces of volatile odours that dogs can smell. The idea is that, once they have worked out which odours dogs are detecting and which cancers emit them, a diagnostic machine could be developed.

Guest also trains dogs to warn owners with Type 1 diabetes of an impending hypoglycaemic, or low blood sugar, episode - they usually alert their owners by jumping up. "We don't know exactly how the dogs do it, but again they pick up on scent because they sniff the person before deciding whether to warn them or not. Because they also have a relationship with their owner, they may be able to pick up on other signs."

Pets can improve self-esteem and decrease the likelihood of depression

"There have been studies that have suggested pet owners are more likely to have higher self-worth and are less likely to suffer loneliness and depression," says Dr Deborah Wells, senior lecturer in psychology at the University of Belfast, who has conducted several studies on the benefits of pet ownership. "Dogs seem to bring people the biggest benefits - you have to get out and walk them every day, and they can act as a social catalyst."

Wells says pets are particularly useful for children. "Pets can become like a therapist, for want of a better word. If children are bullied at school, or their parents are getting divorced, children will often tell their pets their problems whereas they wouldn't always talk to a person."

The charity Pets As Therapy has been running for 25 years and has 4,000 dogs and 106 cats, which visit 120,000 people in hospitals, hospices, care homes, day care centres and schools for children with special needs every week. "We started taking dogs into nursing homes, because elderly people had had to give up their pets when they went in and it was making them depressed and in many cases ill," says Maureen Fennis, the chief executive. "At one nursing home, there was a lady who used to say the visits were her reason for staying alive."

The routine and "normality" of having a pet can help people suffering a traumatic event, such as bereavement or a diagnosis of terminal illness. In one study, McNicholas found that people with animals to care for adjusted far better after the death of someone close than those without pets. "We live in a society where we do not like to cry in front of people," she adds, "but there are a large number of people who can cry in front of their pets" ·