Round Table Discussion - The future of independent retailers

The future of independent retailers

Growth in the sector means more players in the game, but where does this leave independent retailers?

-Words Thomas Oakley-Newell

THE GROWTH in pet ownership, jumping from 61 per cent to 69 per cent over the past few years, has led to an increase in corporate interest and an influx of online retailers moving into the pet space, leaving many independent retailers questioning how they can compete and stay relevant.

John Grima, Owner and Founder of Kellyville Pets, believes two of the biggest challenges facing independent retailers are the ability to create theatre within their stores and the retention of quality staff.

John Grima, Owner and Founder, Kellyville Pets

“Obviously online has changed the way we do business, and a lot of shops feel threatened about what’s happening. To them, I say you’ve got to really differentiate yourself from online by having a different range of products and creating that theatre and that buzz within the store, while also creating those relationships with customers to make them want to come to your store.”

Talking about creating theatre, Grima says at Kellyville Pets it all starts when you’re driving past the store, which has large dinosaur statues out the front.

“Some businesses find it hard to create theatre as not everyone has the luxury of space. But you can still create theatre, even in a smaller environment, only that theatre needs to be consistent through everything you do, right down to your website.” Grima emphasised the importance of giving great customer service to drive repeat business. “It’s a little bit of a cliche now, but in our store, we call it ‘day-making service’ and if you haven’t ‘day-made’ a customer or another staff member or the delivery truck driver coming out the back, then you’re not going to stand out.”

To achieve this, Kellyville Pets focuses on education and animal welfare, all the way through the business, from the product displays to the hiring of staff.

“It’s reflected in the way we display our animals, the way we display our products, the way the staff look, the way they talk to our customers. The selection of our staff, making sure that they have got a passion for good animal welfare outcomes.”

Grima said that when you can deliver that sort of day-making service to customers, they’ll remember that and talk about it, and the proof is in Kellyville’s customer reviews.

Todd Clarkson, CEO of Indepet, agrees that creating genuine connections within the local community is pivotal to independent retailers.

Todd Clarkson, CEO, Indepet

“Carving out a place in your local community is very important. From all the research and focus groups I’ve been a part of, people don’t drive past many pet stores to go to other pet stores. It’s a geography play as much as anything else.

“I think establishing that place in your local community and creating genuine connections, for example the ability to bring your dog into stores. Sometimes we think data is in a computer, but it’s not, data can be in your mind, it can be in your relationships with your customers, it can be in a whole host of things.”

One of the key advantages an independent retailer has, is its ability to embrace innovation and take on new products and be able to move quickly.

“I think it’s about independents being able to respond tochallenges and be a bit nimble. One of the key advantagesan independent retailer has, is its ability to embraceinnovation and take on new products and be able to movequickly. Corporates take a long time to move, they can’t beas nimble, they can’t do things or adapt as quickly as theindependent channel.”

Barry Codling, President, PIAA

Barry Codling, National Director and President ofthe Pet Industry Association of Australia (PIAA), agreesthat knowing the consumer and having expertise in thecategory will set you apart as an independent.

“Understand what online retailers can and cannot do.Understand that you can interact with that consumer verydifferently, which is what they’re looking for. You can’t takeyour pet into an online retail store.”

Andrew Baker, Owner and Founder of Pet SuperstoreGroup in Queensland, believes stores need to embracetheir independence.

Andrew Baker, Owner and Founder, Pet Superstore Group

“We pride ourselves on our service, our productknowledge, and on sharing that product knowledge. Wedon’t want to be a black and white box store that doesn’thave atmospherics. We are proud of our independence, weengage with our customers, and show what we’re about.”

Support from suppliers

The importance of independent retailers is not lost on thesuppliers, who see these independents as a good source ofinformation to help shape the products they’re developing.

Darren Dempsey, Director of Sales and Marketing at Royal Canin, believes the independent channel is critical for Royal Canin’s business.

Darren Dempsey, Director of Sales and Marketing, Royal Canin

“We’re built off a recommendation model, so we rely on good information and knowledge being shared. For our information to be passed to the consumer is important, so the independent stores play a massive role in that experience.”

Anneke van den Broek, Founder of Rufus & Coco, said the ability to receive feedback on new products is an important aspect of independent stores and recently used these stores as a way of testing a new product, the Wee Kitty, an environmentally friendly, washable, natural cat litter.

Anneke van den Broek, Founder, Rufus & Coco

“It’s the independent channels that we use to test and trial and get our feedback in. We’re not so far removed from the customer because of the feedback that we get directly from the retailers, which is vital. At the end of the day, it starts and stops with the customer and what they’re deciding.”

Smaller brands can often find it difficult to secure ranging across the corporate stores, which means independent stores are able to showcase more bespoke and unique products, something Dempsey said enables good variety.

“The nimbleness and agility of independents means we can really trial things and we want to test and learn as much as we can.”

Dempsey invited retailers to work with the suppliers and make the most of what the company has as a collective agency, not just the sales teams, but digital and supply chain teams too.

“There’s a collective intelligence across our business that we can use to help independent trade as much as we can help corporate trade.”

Fernando Villalon, National Business Manager at Boehringer Ingelheim, explained an initiative that Boehringer Ingelheim implemented this year aimed at supporting retailers called Animal Health Academy.

Fernando Villalon, National Business Manager, Boehringer Ingelheim

“It’s an educational platform that independent pet retailers can log onto and get a lot of information from. We’ve partnered with food companies and diagnostic companies to be able to offer a lot broader information than just our own category. So that’s what we brought to market this year.”

Tim Scotcher, General Manager at Cenversa in the Central Pet Division, said his company offers activities specific to the independent channel.

Tim Scotcher, General Manager, Cenversa, Central Pet Division

“I think it’s an important thing to have promotionalactivity that is tailored just to the independent sector at atime that is relevant to them. Also, given that independentsare a bit nimbler and move a bit quicker, we can haveavailability of new and innovative products that theindependents can jump on board.”

The online threat

The rapid growth of the pet industry has seen major retailplayers take notice and seek to capitalise on the trend,meaning independents are no longer just competing withbricks-and-mortar corporates, but some of the biggestonline retailers in the world.

Codling pointed to the market share of Amazon inthe United States and said he believes if its dominanceoverseas translates into the Australian market, it will bedetrimental to many independents.

Despite the grim warning, Codling did offer someadvice to retailers to avoid this happening.

“From an action perspective, the most important takeout is that we are an emotional category. The emotionalcategory says that when a consumer is in your store, youhave a captive audience. You can bond with that consumertoday, tomorrow, and the next day. How you talk to thatconsumer via social media or eDM campaigns is the mostimportant thing going forward.”

Codling said that in the grocery segment, three per centis currently dedicated to the pet category, but also explainedthat the consumer isn’t aided in the decision-makingprocess, which is a massive point of difference to a pet store.

“If you go to a destination store, which is a specialty store, you expect four to six thousand SKUs, you expect a one-to-one relationship, and you’d expect to go in and spend time with someone, with your pet in-store, and talk to them about your pet… because everybody wants to talk about their pet.”

Brian Walker, Founder and CEO, The Retail Doctor Group

Brian Walker, Founder and CEO of The Retail Doctor Group, agrees that independents are in a unique position to be the expert in their field, something that the big retailers can’t offer.

“Being an expert permeates all the way through, right down to the training you give to a casual. Be loud and proud about being an expert because it’s something that Amazon or Myer or David Jones can’t be. They’re broad category retailers.”

Clarkson identified that these large retailers aren’t trying to win over a customer, they’re simply trying to find cheap, low-cost ways to add volume to their turnover.

Tia Wishart, Business & Marketing Manager, Indepet

“They’re trying to get cheap easy conversions to take the consumer’s basket from $70 to $90. Amazon and the likes are not trying to be an expert in pet, they’re trying to leverage off everyone else’s expertise and say while you’re buying your coat hangers or Sonos speaker, why don’t you add a bag of dog food?

“When we understand other retailer’s motives, it’s really easy to combat them because you just do the things that they’re not even trying to do, which is very important to the specialty channel and very important from an independent perspective.”

This feature was created using resources supplied by Indepet.