New consumer guide compares online pet product retailers

Knoji, a provider of consumer reviews and information, released a new consumer guide comparing online pet product retailers.
The report compares retailers such as PetSmart, Petco and PetCareRx to help consumers choose the store that's right for them.
According to the report, PetSmart has an easy return policy, while consumers can earn PetCareRX points for discounts on different products; consumers can earn money back on purchases with Petco's Pals rewards and Petco helps companion animals by donating nearly US$15 million per year to the Petco Foundation.   
The report's complete findings can be read online.

Online pet food retailers growing popular among US pet owners

With 232.1 million Americans having Internet access at home or at the office, according to Forrester Research, a growing number of online pet food and pet product retailers are popping up in hopes of finding more success among pet owners, according to an article on WSJ.com.
Online pet supply retailers like PetFlow.com, MrChewy.com and Wag.com are among those that have emerged in recent years thanks to changes in Internet commerce, online pet retailers say, as well as reduced marketing costs and consumers' desires for convenience. In fact, it cost an online retailer three to five times as much to launch a decade ago, said Brian Walker, online-commerce analyst for Forrester Research.
So, following the failure of Pets.com, a pet food start-up founded in 1998 that raised US$110 million and went public in 2000 before going out of business shortly after, PetFlow was founded in 2010 after raising US$10 million in venture capital. The company's co-founder, Alex Zhardanovsky, said the company now ships one million pounds of petfood per month, and he expects the company will break even by the second quarter of 2012 with sales of US$30 million, up from US$13 million in 2011. PetFlow also stopped using its third-party storage and distribution warehouse in 2011 because Zhardanovsky said it would be too costly as PetFlow ships greater volumes of pet food. The company instead now leases a 65,000-square-foot facility in Cranbury, New Jersey, USA, and said it also plans to seek another round of venture funding in the next year to continue operations.

PetFlow, Wag, launched in July 2011, and Mr. Chewy, launched in September 2011, all say they differ from Pets.com because they focus on convenience, rather than price, by carrying mostly higher-end, premium dog foodsS that have a higher margin. Traditional retailers like PetSmart Inc. and Walmart have also expanded higher-end offerings online, with estimates that US online sales of pet supplies will reach US$4.8 billion by 2015, up from US$2.5 billion in 2011, according to Forrester.  
"There are going to be some 99-cent cat food, dog food, lower-price-point items that may not make sense for us to carry online," said Ravi Jariwala, Walmart spokesman. "We'll bundle them together, so you might buy a six pack."

Petfood sales expected to remain strong, analyst says

Pet product retail is expected to maintain its sales volumes during this time of slow economic growth, with petfood and pet treats resilient to trade-downs because of the pet owner's attachment to their animal companions, Daniel Hofkin, an analyst at William Blair & Company LLC, told TWST.com.
“People tend to spoil and dote on their pets. They will sometimes sacrifice their own eating or spending, but especially among older families or empty nesters, pets are often considered children. And people like to treat their pets as such, not just in terms of continuing to buy them the food that they are used to, but also in terms of other products,” Hofkin said.
Hofkin says pet retailer PetSmart Inc. is well-positioned in the industry from a long-term point of view, because petfood accounts for nearly half of the company’s inventory, with pet products making up the other half.
“We don’t currently have an ‘outperform’ rating on PetSmart, primarily because we are watching the impact high gas prices and input-cost inflation will have on the traffic, particularly in hard goods. But I would say that’s more of a temporary concern, and it doesn’t appear to have materially impacted PetSmart’s results so far,” Hofkin said. 

PetFlow.com founders launch successful pet food delivery site using marketing knowledge

Just over a year ago the pet food delivery service PetFlow.com was launched, yet the pet food delivery service has been so successful that it now does more than US$1 million in business every month, according to a recent blog that tells the retailer's success story.  

One reason PetFlow.com has been so successful is that the founders, Alex Zhardanovsky and Joe Speiser, found a niche in a market that is growing, despite a tough economy. Another reason for the success is that Zhardanovsky and Speiser already had a background in Internet marketing before starting the company. The two used a 40% share of their proceeds from the sale of their company, Azoogle, to start PetFlow.com. The use of marketing schemes like online petfood coupons, flyers, Facebook and search/banner marketing to advertise the pet food delivery service to the pet industry. Through the use of images of cute puppies, kittens and other animals, PetFlow created ad campaigns that appeal directly to its customers.

Online pet food, pet product retailers cater to women pet owners

Two online petfood retailers have recently launched and secured funding to expand, drawing some conclusions that these pet food stores are becoming popular among certain consumers.
PetFlow.com, a premium pet food retailer, recently received US$10 million Series B funding to expand its operations, led by LightSpeed Venture Partners. Recently launched by the wholly owned Amazon.com subsidiary, Quidsi, Wag.com sells petfoods, pet products and accessories.
The pet food websites seem to understand the demographic make-up and needs of customers. A May 2011 Harris Poll found that the majority of Americans (62%) own a pet. Adding to the websites' success is the fact that women are more likely (69%) to own a pet than men (55%), according to Justin Caldbeck, managing director at LightSpeed Venture Partners.
"Most petfood today is bought by women, who have to haul 40 pound bags of dog food from the store to their car, and then from their car to their home. It's heavy, it's expensive, and sometimes they run out unexpectedly with little time to run to the store and buy more," Caldbeck said.
For its customers, Wag.com says it promises free shipping on orders over US$49, including the larger 30-pound bags of food.