How one Dutch pet retailer approaches the market differently

Discus has a slightly different model than the typical retailer. No franchisees, no own stores, only independent entrepreneurs that operate a total of 83 pet stores across the Netherlands.

Local heroes

The entrepreneurs are core to how Discus tries to differentiate itself. “Our entrepreneurs are the ‘local heroes’. They’re the experts and the familiar face for consumers in their area. They know which products work for their customers, and which don’t,” says Bert de Jonge, CEO of Discus Netherlands.

While people have been saying for years that smaller stores will gradually disappear, De Jonge sees it differently. These local entrepreneurs are what makes Discus special. And he points out that COVID made it clear to all that ‘local heroes’ will remain an important part of the retail landscape.

Collective vs individual preferences

Discus steers clear of competing on price. If a certain product is offered at very low prices online, Discus often doesn’t carry that item at all. “Instead, we focus on education, a unique product offering, and good service to make the price much less of a factor for consumers,” De Jonge explains.

The Discus model also warrants this approach. As a collective of entrepreneurs, being margin-driven is the best way to offer an interesting value proposition to its members. How does Discus pursue a unique product offering? Discus Netherlands, as the service organization supporting the independent Discus entrepreneurs, makes agreements with preferred suppliers. At the end of the day, it is up to each individual entrepreneur to decide which products they want to buy and sell, based on their intimate knowledge of their customers’ preferences. So they make their own choices in assortment within the collective agreements.

Importance of private labels

The Discus private label products also contribute to its unique product offering. And this is clearly a growing category. The Total Bite brand, for example, is one of its top sellers.

De Jonge believes that these private label and own brands will play an even bigger role in future.

He explains: “Our private label products serve as a flywheel. The more they sell, the better the purchasing agreements we can negotiate, and the higher the margins can be while keeping the prices attractive for consumers.”

Pet specialty’s strengths

For many pet specialty retailers, driving supermarket buyers to the specialty channel is an opportunity for growth. In the Netherlands, for example, 65-70% of cat owners buy pet food in supermarkets. While De Jonge agrees that this provides an opportunity, he does see it as an interesting challenge:

“The average consumer who buys in a supermarket considers the products they find there to be the ‘top brands’. They’ve seen them on national TV, which makes them think that these products must be really good. So the question is ‘How do you explain to people that while those products are good, there might be more suitable products for their own pet’.”

For De Jonge, the humanization of pets offers a bigger opportunity for growth. Pet specialty’s strengths are knowledge, service and a unique product offering. Consumers need all this to make educated decisions and give their pets the best of the best. Which is exactly why Discus is focusing on these 3 pillars.

Collaborating on sustainability

The pet industry is increasingly looking for more sustainable alternatives, and Discus is no exception. It’s working hard to provide products like these for its customers, but De Jonge would like to see closer collaboration within the whole supply chain to achieve more.

“From suppliers to manufacturers to retailers – we should all work together to offer affordable products that are good for our planet. Most consumers aren’t yet really concerned with sustainability or healthy food. So to actually make an impact, we need to collaborate more. That will enable us to offer those products at prices that make it a no-brainer for everyone.”

More stores?

Most pet retailers grow by opening more stores themselves, or by attracting franchisees to open them. Since Discus doesn’t have its own stores, growth depends on existing members opening new stores, or on attracting new entrepreneurs as members.

De Jonge acknowledges that finding new members is not easy, for a number of reasons. An aging population means that a lot of potential Discus members are stepping away from retailing. Although Discus is collaborating with universities to attract new talent, there are few people entering the sector, especially since banks are proving less keen to invest in retail.

Future plans

Within the Netherlands, De Jonge would like to see the organization grow to 150 stores. But it’s not sprinting to achieve that goal. Steady growth will get it there over time.

While Discus doesn’t have the ambition right now to open stores internationally, it is considering collaborations with foreign partners to sell more private label products and achieve greater economies of scale.

A key project in the next 12 months is the development of a new back-end system. This will centralize data to help the entrepreneurs get better insights, make better business decisions, and serve the consumer even better.