The pet industry has a history of being relatively recession-proof – and in the wake of the COVID-19 crisis, it has been booming. As people made the decision to reduce contact with their friends, family and colleagues, they turned to pets for companionship. Many of those who didn’t have pets to start with decided to adopt a new pet in 2020 and 2021.
According to Retaildive.com, there was a 5.7 percent increase in the number of pet-owning households in the United States in 2020. This has resulted in an upward trend in consumer spending that has been directed towards pet industry businesses. In 2020, people in the United States spent a whopping $103.6 billion on their pets.
If you’re hoping your pet industry startup can grab a slice of that hundred-billion-plus dollar pie, read on to discover 3 things you need to know before launching:
1. Some Pet-Related Niches Are More Viable Than Others
People spend hundreds of billions on their pets, but that doesn’t automatically mean they’ll spend extravagantly at your business. Therefore, one of the most important steps to take before launching your new venture is ensuring that you’re choosing a viable business niche.
When you launch a new business, it’s important to ensure that you’re filling a genuine need in the marketplace. When it comes to pet businesses, the pet food niche is one of the best at filling an obvious need.
Everyone who has a pet is obligated to feed it. For that reason, pet food and pet treat businesses lead the pack in terms of which niche generates the highest dollar amount of consumer spending. In 2020, consumers in the United States spent about $42 billion buying pet food and treats for their animals. This niche is subdivided by species, with dog food being one of the most lucrative.
Other viable pet industry niches include pet sitting, dog walking, dog training, pet grooming, upscale pet products, veterinary care, kennel boarding and pet toys.
2. Discover Your Target Market
There are an estimated 84.9 million pet-friendly homes in the United States – but you couldn’t sell the same sorts of products and services to all of these pet owners. For example, the 4.5 million reptile owners most likely wouldn’t be interested in dog treats or dog walking services – nor would the 11.5 million freshwater fish owners. There might be upwards of 7 million ferret owners in the United States, but that doesn’t mean all of them want to buy a ferret hammock for their pets. So when you launch a pet industry business, you have to do careful research to determine who your target market really is. Be conscious that it might be smaller than you’d initially think.
3. Choose Up-and-Coming Marketing and Distribution Strategies
In the past, having a brick-and-mortar pet store was a viable business strategy, but the COVID-19 crisis has introduced some uncertainty about whether it will remain viable in the future. The trend towards online shopping was already gaining momentum before the Coronavirus became an issue, and it has become even more popular since.
Some established brick-and-mortar pet store chains had trouble maintaining profitability during the COVID-19 crisis. To give one example, the Petvalu chain recently announced their stores’ closing. But at the same time, online pet care brands like Chewy’s have enjoyed dramatically increasing revenues.
It is impossible to predict whether peoples’ shopping habits have changed permanently, or if in-person shopping will resume after the COVID-19 crisis fades. Regardless, online shopping is apparently here to stay – so no matter what business model you ultimately choose to launch with, it’s worth establishing an online presence for your pet industry business.
These aren’t the only considerations for launching a new pet industry startup, but they’re some of the most important things to be aware of as you begin your new venture.
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