Press release-Pet Boutiques: Boom or Bust?

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Press release-Pet Boutiques: Boom or Bust?

Pet Boutiques, Boom or Bust?
By Emily Lambert

March 2008–Is the “trend” of luxury pet items on the decline? Certainly if you’ve been reading industry trade magazines you might be under the impression that pet boutiques are doomed and consumers are going “back to basics.”

Most industry experts agree that the space for high-end pet items was at it’s high around 2005-2006. But in 2007 it did “seem” to cool off a little.

Or did it?
The APPMA 2007-2008 National Pet Owners Survey says pet ownership and spending on pets are at an all time high, an estimated $40.8 billion in 2007.

Increased Competition
So why then does it seem that luxury products for pets are cooling off? One theory is increased competition. Since 2005 every category of high end pet products (bedding, spa, apparel etc) has at least doubled the number of manufacturers. Retail outlets are also popping up everywhere.

In 2004 there were only two high end “pet boutiques” in West Los Angeles (depending on your definition of pet boutique.) Now there are at least eight, said Lorna Paxton co-owner of Happytails. “And there were maybe 2 or 3 “spa” lines out there. Now I’ve lost count!”

So although consumers are continuing to spend, the dollars are being spread thin. Manufacturers may receive smaller orders from more stores. Why? It could be because those same stores who used to place larger orders now have competition on every corner vying for the same dollars.

On the other hand, a January Pet Age article states that, based on a survey they conducted, pet boutiques may be on the decline.

The number of pet boutiques represented in Pet Age magazine’s “2007-2008 Retailer Report,” survey were half of what they were in their previous survey (in 2005), dropping from 18% to 9%. Pet Age also reports the gift/boutique category fell from the list of the fastest-growing product categories. While the article cites reasons, such as, “customers responding to general economic woes by going back to basics” and “too much out there,” regarding products in the marketplace, we wanted to know more. So we conducted our own research.

The forecast
After interviewing boutique owners around the country we found out the forecast is anything but glum. In fact, many retailers say their boutiques are thriving despite our slow economy. Tina Musselwhite, owner of Gourmutt’s Bakery in Raleigh, NC says “We moved into a larger building last September and expanded more into boutique things. We are seeing growth constantly,” she says. “We’re hearing ‘recession, recession, recession’ but we don’t see it.”

Sandra Caldwell, owner of Three Dog Bakery in Phoenix, AZ, has owned her boutique for over 10 years, and says the same thing: “My business has progressively increased.”

The increase in consumer spending shows that dogs have taken on an elevated status in our society. “It used to be normal for us to wash our dogs in the back yard with a hose, and feed them the cheapest food you could find. Nowadays it’s much more main stream to care for our dogs with products that have better, more natural ingredients,” says Kevin Fisher, co-founder of happytails Canine Spa Line in Los Angeles, CA.

Perhaps boutique products are becoming less of a fad and more of a way of life.

Fisher added, “this is like the internet bust in the late ‘90s. But even after the big bust the internet is still here and stronger than ever. The internet is no longer a trend or fad, but a normal part of everyday life.”

He says the same thing is happening with high end pet products. “Store owners are worried that consumers are going back to basics but what’s happening is the hype is settling down and the entire level of pet care has risen.”

Pet food ingredients have become especially important since the food recall. “I think when the food thing happened, it pushed people to go to boutiques,” says Chris Price, owner of D.O.G. Pet Boutique in West Hollywood, CA, “because boutiques cater to the individual dog versus the masses, with their one size (or brand) fits all approach.”

A blog on the Small Business Trends website on December 20th, 2007, from a National Pet Press writer, voiced pet owners are no longer willing to trust large corporations that produce pet products. “Instead of being spoon fed by advertising, pet people are doing a little research.”

Back to Basics
While there is much good news to be had, some boutiques are reporting the “frou-frou” is on the way out and basic items are taking over. Daisies Delights & Pet Boutique sells two sets of collars, a faux-leather, classic style from Bark Avenue and a “bling” line. The classic style is selling much better, says owner Gina Newman. “People are still relating to their dogs like kids, but it’s less posh. I’ll sell a leash and a collar before a carrier,” she adds. While Caldwell says her spa line and grooming tool selection are selling well, clothing is a trend she sees going out.

In a February 2008 Pet Business article Maggie Marchese, VP at UPG Companion Animals predicts that while economic woes may cause a downturn in some “trendy” categories such as pet apparel, sales of everyday necessities should remain strong.

However, Bob Vetere, president of the APPMA thinks that retailers shouldn’t count out the luxury-products segment just yet. “I think eventually this segment will start to level off, just because there’s only so many things that you can come out with,” he says “But because you still have such a large chunk of baby boomers reaching the point where their children are leaving home and they’re looking for something else to dote on, this will continue to feed the boutique and high-end segment for at least another three to five years, I think”

So, what should a boutique owner do with all of this information? Synthesized down, it means that products that have a purpose, solve a problem or fulfill a need are keepers. And luckily there are lots of high-end products available that look cute and trendy and also solve a problem—these are the products you want to buy. And there is so much available that you don’t have to carry the same brands that Petco or Pet Smart offer. Be different.

“When we develop a new product we always ask ourselves what problem this product going to solve” says Lorna Paxton of happytails. “We know that our upscale packaging may get the first purchase but it’s the stuff inside the bottle that will get the repeat purchase.” When selecting merchandise for your store, this is what you should be looking for- products that have style and function.

So as for “boom or bust,” many pet boutiques are still seeing “boom.” And even if we fall into a deep recession, as Caldwell says, “People love their dogs. Even when they’re tightening their belt.”

How to stand out from the crowd
There’s no doubt, though that there is a lot “out there” today and pet boutiques have increased competition.

Sandra Caldwell from Three Dog Bakery in Pheonix has had six new dog boutiques open in a five-mile radius in the last 18 months. (One closed within six months.) Thus, it is those who differentiate themselves by offering superior service, as well as superior products, who manage to stay in the game.

“I think most of our customers have expendable income. Most of our customers don’t want to shop at PetSmart. They want personal service. They want us to know their pet’s name,” says Tina Musselwhite from Gourmutts Bakery, who “tries to go above and beyond” when she can.

For instance, a request was taken to deliver treats to a veterinary hospital for a dog with cancer the other day. “We don’t deliver, but we did,” she says. “Some competitors are focused on the day to day business and lose the big picture. You do it for the right reasons. I think it’s about having a passion for what you’re doing,” says Musselwhite. “We’re dog people and dog people relate to each other. I think that shows at our store.”

“Our customers get very personal service at Daisy’s Delights Barkery & Boutique. They can ask for certain sizes, colors, and items not on the shelf, and we will do our best to get them. We special order items from dog food to breed-specific car magnets for our customers. We will customize a treat, cupcake or birthday cake, something you can’t just get anywhere. We also listen carefully to them and try to stock items their pets like or new items to try; items they may not be able to get at a big box store,” says Gina Newman, owner of Daisy’s Delights Barkery & Pet Boutique in Ridley Park, PA.

In addition to excellent customer service, offering pet services, along with your boutique items, are another way of standing out from the crowd. Pet Age reports ancillary services represented 12% of dollar volume per store in 2006, versus 9 percent in 2005. Profit margin on services also moved up. Pet boutiques can offer home-baked treats, self-serve baths and grooming shops, to differentiate themselves from other competitors.

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