The percentage of pet products purchased online in the United States more than tripled over the past five years, from 8% in 2015 to 30% in 2020. For people buying pet products online, the leaders are Amazon (59%) and Chewy (41%), according to consumer market researcher Packaged Facts.
As Packaged Facts explains in its U.S. Pet Market Outlook 2021-2022, traditional brick-and-mortar stores increasingly are competing online for valuable pet owner dollars. Walmart, for example, launched the Walmart Pet Care website, where shoppers can buy pet and livestock supplies, veterinary medications, pet health insurance, and even boarding and dog walking services.
“Pet owner spending is broadening across a transformed set of products, services, and high-tech product/service hybrids, while the top tier of competitors aggressively cross former business operations borders to compete for consumer mindshare and customer loyalty,” the report states.
The American Pet Products Association reported that U.S. consumer spending on pet food and supplies and veterinary care exceeded $100 billion in 2020 and shows no signs of weakening. “We have reached a critical milestone, generating $103.6 billion in sales,” said Steve King, APPA president and CEO, in a March press release. “We are bullish for the coming year, projecting growth of 5.8%, well above the historical average of 3 to 4%.”
Pet food and treats are the products most commonly purchased online, the Packaged Facts report states. E-commerce success with pet food has depended not only on eliminating shipping and handling costs associated with transporting bulky items but also on consumer engagement.
The COVID-19 pandemic accelerated the trend toward online shopping, states the Packaged Facts report, which predicts e-commerce will account for half of all pet product spending by 2025.
The report goes on to project several changes to the U.S. pet industry attributable to the pandemic. These include a permanent remix of physical and digital shopping behaviors; a growing role for direct manufacturer-to-consumer selling and shipping, along with retailer-based automatic shipping and same-day delivery; continued diversification of the veterinary sector, including through in-store clinics or at-store veterinary clinic pop-ups, along with online pet pharmacies; and an expanded role for pet acquisition or adoption, set-up for new pets, and training services through brick-and-mortar or virtual stores.
Pet owner surveys in the Packaged Facts report show that while veterinarians remain the most influential source on pet care information (58%), the combination of pet retailers and the internet is not far behind (56%).
Additionally, 21% of millennial and Generation Z pet owners believe technology is allowing them to spend more quality time with their pets, compared with 19% of Gen Xers and 13% of boomers.
These numbers, though relatively modest to date, “point to an ongoing technological revolution that will continue to recast how to win and who will do so in the pet industry,” said David Sprinkle, Packaged Facts research director, in a press release.
Doug Brooks, vice president of business development at Compassion-First Pet Hospitals, said at the 2020 AVMA Economic Summit that one of the biggest trends that will transform the veterinary industry is that there are going to be more medications and other products available outside veterinary channels.
“For veterinarians dragged reluctantly to telemedicine or offering products online, the time has come for people to put old habits out of window. They need to adapt,” Brooks said.
For those reluctant to do so, he advises them to change their mindset about how profitable offering online products and services needs to be.
“A little bit of something is a whole lot better than a whole lot of nothing,” Brooks said. “Crumbs are still bread.”