New Zealand: Petdirect CEO sees growth potential in underserved pet retail market

The retail sector has become accustomed to the rise of e-commerce, often at the expense of physical stores; however, a New Zealand pet retailer is taking a bold step against this trend.

Petdirect is the largest New Zealand-owned pet supply retailer in the market. When it was founded in 2020, it was exclusively online, but in 2024, it opened its first brick-and-mortar store following a private equity investment.

The success of that initial opening has prompted the company to expand its physical store presence in a market currently dominated by Australian players, including Animates (which has 46 stores) and Petstock (which has 17).  

Growth opportunity 

GlobalPETS has been speaking with Petdirect CEO Dave Anderson, who notes there is an unmet demand for new stores, presenting a growth opportunity for his business.

“While we hold a solid grip and majority share in the New Zealand online pet market, we recognized that the overall physical retail channel for pet products is significantly larger, measuring approximately 4 times the size of the online market,” he says. 

According to Anderson, analysis shows that the number of physical pet retail stores per capita in New Zealand is lower than in comparable markets. “This correlates with comparatively lower consumer spending on pet specialty products within the physical retail space.”

New locations 

The new locations will be carefully selected to tap into high levels of pet parenthood and foot traffic. While several stores will be opened in the next year, growth will be kept at a realistic pace.

“We are cautious about not spreading ourselves too thin during this expansion phase,” says Anderson. “Our key goal is to ensure that each new store we open is strategically located and adequately resourced to serve its local community exceptionally well, thereby maintaining the high quality of service we have built our reputation on with our customers.”

Cautious consumers 

The expansion comes as inflation and cautious consumer spending reshape the retail landscape, but Petdirect is tapping into the unique stability of the pet care sector, where spending remains consistent even during downturns.

“Crucially, the New Zealand pet market itself is robust and growing,” adds Anderson. “Pet ownership is on the rise, with approximately 4.3 million pets compared to a population of 5.2 million people, highlighting the scale of the retail opportunity.”

With the business already having a strong online presence and customer base, Anderson is confident that the expansion into physical stores will pay off.

“Given the large customer base we’ve already built online and the fact that we sell the same products across both channels, branching out into physical retail made strategic sense to serve our existing customers through an additional convenient channel while attracting new ones,” he explains.

Key learning

Launching a single store last year has provided Petdirect with valuable data and insights into consumer behavior, as well as positive feedback. Over 50% of customers shopping in the Takapuna store have been new to Petdirect, indicating effective customer acquisition through the physical channel.

“A primary takeaway is that location is absolutely critical; it is essential to be positioned conveniently where our customers need us most,” Anderson says of what has been learned so far.

“We have also reinforced the importance of ensuring the customer experience is seamless, whether they are shopping with us online or walking directly into a physical store. The key understanding gained is that people highly value convenience, the overall shopping experience, product choice, and quality service.”

Customer experience 

The importance of a good customer experience is critical to physical retail success, and Anderson knows that Petdirect needs to excel beyond its competitors, building on its online success in this area.

“In our physical stores, we unite expert guidance from our staff, seamless technology integration, and an elevated environment that both pets and people genuinely enjoy,” he says. 

“We ensure there are more staff available on the floor to deliver an unparalleled customer experience compared to competitors. Furthermore, we leverage technology not only to provide clear and engaging communication to customers but also to reduce operational downtime for staff, allowing them to focus more time on direct customer interaction and service.”

Powerful partnerships

Petdirect participates in Air New Zealand’s Airpoints program, which Anderson says has been a game-changer for customer loyalty. For the physical stores, there will also be a strong focus on the locations becoming community hubs for pet parents.

“To engage local pet owners offline and foster a sense of community, we host a variety of regular events,” he says. “These include adoption days, puppy training school, advice evenings focusing on a range of relevant topics, and engaging seasonal events like a photo with Santa Paws. These activities collectively transform each physical location into the local pet hub, actively building loyalty within the community that price alone cannot match.”

Learning curve

Transitioning from an online-only to a hybrid business with brick-and-mortar stores has not been without its challenges. Anderson shares that it has been a learning curve.  

“The biggest operational challenge we’ve encountered is having the right systems in place to offer the same exceptional level of service in store as we do online, and crucially, to integrate these systems effectively so the customer experiences a truly seamless journey across both channels,” he says. 

“However, with the right tools and a strong team, we’ve managed to navigate these challenges and are excited about the future of our hybrid model.”