Enhancing customer loyalty in the pet business

If there was something that all speakers and attendees at the GPF 2023 event in Berlin agreed on, it was that the customer should always be at the center of any pet business.

Main priority

Silke Esser, Director of Strategic Marketing at Zooplus, said that the online pet retailer made their loyal customers the main priority. “We want to be different from Amazon, we are specialists and this is our expertise, we have strong skills,” she said. The German-based company has 10 million active customers and, according to Esser, there is 98% sales retention – what she calls the Zooplus heartbeat.

IskayPet, a Spanish pet retailer with over 4 million active customers and a yearly turnover of more than €400 million ($427M), sells 75% of its products to its recurrent customers. “We have a lot of information about them,” said the company’s CEO Marcos Ruao. He also pointed out that “it is much easier” to gain loyalty from customers that buy in-store or omnichannel than with an online transaction where there is almost no interaction.

Choosing the right strategy

Alexandra Dobra-Kiel, Innovation and Strategy Director at London-based behavioral consultancy Behave, asked the attendees why a company should care about loyalty. And the answer is clear: acquiring a new customer costs 5 times more than keeping an existing one.

Silke Esser from Zooplus shared her thoughts on the basic requirements for customer loyalty: financial – with the implementation of a reward program, structural – allowing the customer to re-order the same products in an easy way, emotional – that the customer feels the brand is an expert, and behavioral or customer centricity. She disagreed with the traditional approach of “one size fits all”, as it implies a lack of personalization in communication with the customer. And she pointed out that this communication needs to be in line with the purchasing cycle.

Esser mentioned the rewards program as a very attractive way to contribute to customer loyalty, as well as to offer customers targeted coupons that give them the chance to save money. And it seems that this strategy is paying off. “Over 50% of our customers want to stay with us.”

More than just a happy pet parent

Although fidelity as a concept is key to building brand loyalty, Dobra-Kiel reminded the GPF 2023 audience that it is not the only way to go. “A lot of companies think that customer satisfaction is transactional, but it is more than that. It is about nurturing the relationship with your customer,” she stated, adding that more and more pet companies are investing in customer success.

Consistency is a critical part of this process and it must be reflected across the consumer journey in order to build an emotional attachment based on affection, passion and connection. Dobra-Kiel shared some examples, like Chewy, which sends cards to pet owners whose pets have died, or Petco launching a campaign for customers to share their personal experiences. She also talked about always giving rewards – not necessarily a discount, just symbolically – to encourage customers to get into the habit of staying loyal to a brand.

David Sprinkle from Packaged Facts shared some views on how important loyalty is in today’s world. He pointed out that, in addition to free shipping and rewards points, an increasing trend in pet care is to offer payment options for the services on offer.

How the future looks

‘Future’ was perhaps one of the most repeated words at the GlobalPETS Forum. Kristel Vanderlinden from FutureKind, a Creative Think Tank with headquarters in Antwerp, said that retailing is set to be more personalized, more community-driven and with an emotional bond attached.

She also mentioned the ‘trend of less’ economy, with a consumer mindset focused on consuming less. “It is not about possession anymore, but about products having a circular approach,” she said.

Vanderlinden advised the pet industry to boost its relationship with customers by offering higher personalization. She also recommended using the retailing space for advertising other brands.

Sprinkle from Packaged Facts highlighted the medicalization of the industry, which is a “real driver” in the market, and said there are more young pet parents paying extra attention to pet health and wellness since the pandemic. According to the data he presented, 45% of Gen Z/millennials think that way, followed by Gen X (40%) and boomers (35%).

Pet retailers versus grocery stores

During a panel discussion, the CEOs of Josera (Germany), Intersand (Canada) and VAFO Group (Czech Republic) discussed consumer behavior.

Stephane Chevigny from Intersand said that they don’t see a lot of their customers moving from specialist stores to mass markets, because they are looking for quality products. “They are still willing to pay more,” he stated.

Private label is expected to play a central role in this. Stephan Hoose from Josera added that 70% of their sales are of this kind of product. “It is easy to explain private labels in the specialist retailer, but not in the grocery channel.”

VAFO Group’s Jakub Majer suggested that pet businesses need to develop new ways of communication in order to handle the new type of pet parent. “We have to learn how to communicate using tools that are still new to us. If we want to succeed, and to communicate with the customer, we need to do it,” he concluded.

TikTok, the new way to communicate?

TikTok was given as an example of social media where the pet industry should be active.

CEO and Co-founder of Petfluencer Thomas Poschen said that this specific social media platform is no longer just a fun and video app. “A lot of people aged between 28 and 34 are using it.” He also warned that companies that are not yet using TikTok “are doing something wrong.”

On the other hand, IskayPet’s Marcos Ruao reminded the attendees that pet retailers need to understand both types of customers. “We need to worry about Gen Z and Gen X, but also about the rest of the customers. We need to manage it all,” he concluded.