“The internet has changed everything.” We have heard this so often, but what does this mean?
New, flexible approach
Consumers and pet parents now have unlimited opportunities to find information about their pets, pet behaviour, the myriad of services available as well as, of course, about pet foods and treats. It is a transformation that has impacted everyone in the pet industry. Most of these effects have been positive but some of the implications on our business are far-reaching and challenge us more than ever.
Not only do we face new challenges but since the situation is ever-changing they are not static either. We need to have a new, flexible approach to the market and adapt our actions and responses to these changes as well as actively anticipate future changes.
Big brands are challenged
Historically, big brands and their owners had a simple model: invest funds in mass marketing (TV, cinema, press ads, etc.) and build strong relationships with consumers and gain their loyalty to the brand. But this has changed. Mass media is no longer the main channel through which consumers get information as the media world has splintered and information is available from an unprecedented large number of sources.
Big brands used to have high marketing budgets as a way to bar entry, making it very hard for new brands or competition to gain the scale needed to be able to afford the ongoing investment in mass marketing. But as the power of these media decline, so does their ‘power’.
Pricing and sales channels
The impact of the internet and the many new purchase options means that the stable pricing of the ‘old model’ has gone and one of the biggest challenges brands face now is pricing.
As brick-and-mortar stores are losing sales to the online and other channels, the big brands suffer as their logistics and business systems are set up to supply big customers with big quantities and the numbers do not correspond as well as before.
New channels are appearing. To name just one, Waitrose in the UK, a premium grocery chain, has launched Waitrose Pet. This is an online portal that offers pet trade brands as well as regular grocery products and has caused considerable consternation in the UK (and elsewhere too).
Small brands benefit
While these changes are causing damage to the big brands, they also create opportunities for smaller and fast moving new brands.
The new low cost ways of communicating through social media and websites is a bigger advantage for smaller brands who have personal and close contact with consumers.
Many consumers buy online in a brand’s web shop or via an online retailer and so it becomes possible for small brands to build brand awareness without having first to build distribution systems with a brick and mortar presence in retail stores.
The latest articles
More than 20% of Nestlé’s sales last year were pet products
The conglomerate’s pet category is the largest contributor to organic growth, while global sales decreased by 1.5%.
Better Choice to develop weight loss supplement for pets
The Florida-based pet health and wellness firm recently acquired all issued and outstanding shares in Canadian Aimia Pet Healthco for an undisclosed amount.
European pet food manufacturers establish new group
SANYpet, Natural Line and Codico have created a new production and distribution group to capture the international market.
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