Paws for Thought - Why your brand strategy now needs four legs...
Updated: Sep 8, 2021
Six months ago now, I wrote a piece highlighting why Porter’s 5 Forces model still has a role to play in the marketing planning process, especially as we try to understand which shifts, if any, are permanent shifts versus those which are blips that will disappear in the mists of time. From my perspective, one of the key things to remember when looking at market dynamics (through 5 Forces or any other model for that matter!), is to make sure you consider the indirect as well as the direct impacts on your category.
As Ben Page expertly highlighted at this year’s MRS conference, it’s always too easy to focus on what’s changing whilst forgetting that many things which appear to be ‘new’ phenomena are things which have ever been so. However, one of the recent shifts which we can see every time we leave the house is the staggering rise in dog ownership since the start of the pandemic.
The PFMA estimates that some 3.2 million households in the UK have acquired a pet since the start of lockdown with dogs now drawing level with their feline ‘friends’ as the UK’s number one furry companion. The largest growth in pet ownership has come from younger segments with 59% of all new owners aged 16-34 as many have been able to take advantage of flexible working patterns and know that someone is at home to look after the dog. This recent surge means that c. 1 in 3 households in the UK now has a dog as part of the family.
The direct impact of the ‘puppy boom’ has been clear to see. The UK’s leading pet specialist Pets at Home, for example, has never had it so good. Whilst other retailers have had a torrid time dealing with the ever-changing lockdown restrictions, Pets at Home have seen topline revenues increase by nearly 19% to £1,142.8m with 2 year like for like sales growth of over 29%. Indeed, the first quarter of this financial year saw an additional 5 million transactions compared to the same time last year! Investors certainly can’t get enough with Pets at Home shares now hovering around the £5 mark compared to less than £3 when COVID-19 first hit our shores.
From food to treats, collars to harnesses, blankets to beds - you name it the pet sector is seeing incredible growth as new owners in particular look to pamper their pooch. However, whilst L4L sales growth of pet supplies seems inevitable with so many new pet owners, integral to Pets at Home growth has also been the underlying revenue increase from additional ‘services’ (e.g. veterinary, grooming etc) which now account for 33% of group revenues. Our willingness to spend on our pets seemingly knows no bounds.
These incremental services such as grooming and pet sitting are obvious beneficiaries of the lockdown puppy boom. The global pet sitting market for example is forecast to rise by 8.7% over the next 5 years and a quick glance at Google Trends for ‘doggy day care near me’ shows how this is becoming a top of mind concern for many as restrictions ease and they look for a night out or even just to head to the office.
However, what may not be so obvious immediately is that the impact of such a significant change in dog ownership will be felt not just in pet care of pet food but across a much broader range of categories. Yet, the ripples from such a change in household dynamics reach far further than simply pet supplies or ancillary services. From retail to hospitality, a brand’s stance on whether they are ‘dog friendly’ will start to have a significant influence on where households choose to eat, where they choose to shop and how/where they choose to travel etc. Many households are now coming to realise that their decision making is being shaped as much by a dog as by any other addition to the household.
For some brands this represents a fantastic opportunity (e.g. dog friendly pubs able to fire another salvo at the ailing casual dining sector) but for others it also represents a clear need to respond e.g. family-focused hotels may need to rethink how they offer dog friendly accommodation as they come under increasing pressure from the short term rental sector e.g. Airbnb. Picturehouse have even gone as far as to offer dog friendly screenings in an attempt to get us away from Netflix and back to the big screen.
Over the past two decades we’ve become accustomed to brands competing on who can be the most child friendly destination. From kids clubs in hotels to the crayons in pizza restaurants, the hospitality sector in particular has had to shift tactics as families spend more time out socialising together. In the same vein, the little touches (e.g. from dog bowls to treats) may go a long way to capturing share of trade for one brand over another.
Just like kids, however, dogs can be an extremely divisive issue; check any local Facebook group and you’ll see that, for each of those 3.2million new dog owners, there is an equally vociferous group bemoaning they are besieged by this influx of new furry friends. From dirt to noise and from phobia to allergies, there is understandably a long list of objections for any brand hoping to greet our four-legged friends with open arms. Most polls conducted on whether dogs should be allowed anywhere from shops to restaurants typically show a hung jury with c. 1 in 3 in favour and an almost identical proportion against.
Some brands have already decided to take the plunge with brands such as John Lewis, H&M and Metro Bank already deciding they'll welcome dogs in store. As one of the recent 3.2m owners, I have to confess to being as torn on this subject as anyone but, whilst it’s a tricky balancing act, this is an issue that all brands need to be planning for in their marketing strategies...