The state of the German pet industry

Impact of COVID-19

With people spending more time with their pets, the pandemic has accelerated the willingness of consumers to buy more expensive, high-quality products. That increase in demand for premium products can be seen in the buying behaviour for food, snacks and rewards, as well as for non-food items.

This does not just apply to the major categories of cats and dogs. Kölle is also seeing a large increase in the spend per customer for its speciality categories (aquatics, small animals and birds).

Online revenue

Germany has seen tremendous growth in online sales, just like most other countries. For both retailers, online sales have reached around 10% of their total turnover. Some categories are particularly popular online, such as bulkier items that are more difficult to carry – cat trees or litter – but also dry dog food and wet cat food. Online sales in those categories jumped up to 35%.

Bricks and mortar vs online

Although online will continue to grow, physical retail will still have an important place in the German pet market. Above all, consumers want a great experience and personal advice to be able to give the best care to their pets. While some offline sales will shift into online, bricks and mortar is in the best position to offer that experience-based service.

The COVID pandemic has confirmed this. Besides online stores, it is the physical stores offering a great buyer experience and valuable advice that have done well. Discount concepts did not benefit in the same way.

Kölle continues to see a high demand from consumers for an entertaining store environment that is well-designed and has high-quality pet and product presentation. Even consumers who enjoy buying online are attracted to this kind of retail environment. To further illustrate the importance of brick and mortar: Fressnapf is planning on opening 100 new stores in 2021.

Channel integration

To truly excel, retailers must find the right balance between offline and online. Both German companies are currently investing considerably in channel integration, to connect the physical world to the digital one.

Fressnapf’s data already shows that consumers who buy from a combination of channels have the highest overall lifetime value. So the company is working hard on expanding its complete range of products and services both online and offline: veterinary care, digital consultations, a puppy and kitten club, grooming services, insurance and more.

Integration challenges

One of the challenges for integration is staff-related. Sales staff at the retail outlets need to be well trained, so that they can become that advisor the consumers want and need. It is also vital that effective communication between the company’s online and offline departments helps to build a stronger holistic experience for the customer.

Smart logistics can also be key. Smart use of different delivery concepts will allow both channels to prosper. For example, big non-food items showcased in a store can be delivered using online logistics.