Pet Industry Trends: Interview with Dillon Media's Michael Dillon About The Growing Humanization of our Pets; Aging Pets & Petowners; Chain Stores & Boutiques & Pet Services; Technology & Pets; Pets as Status Symbols - WEEKLY FASHIONTRIBES PET PODCAST - MP3 File
Diamond dog collars, designer cat loftbeds, fancy pet spas & hotels, pet caskets & customized headstones even – what does it all mean? No, it’s not your imagination, pets are increasingly treated as part of the family, with all the privileges, rights & pampering thereof. To get a handle on this growing humanization of hounds, we got the scoop from pet industry insider & analyst Michael Dillon of Dillon Media, www.dillonmedia.com.
- More Pet Owners & More Pets. There’s no denying, we love our pets. According to the U.S. Humane Society, www.hsus.org, in the US alone, there are over 140 million pets: 65 million owned dogs & 77 million owned cats. Almost 40% of all households own a dog, and over 20% of these have two dogs. 34% of all households own a cat, over half of which have two or more. “Demographics are definitely driving the industry. There are more pet owners and there are more pets,” concurs Dillon, who also notes that more dogs are registered each year with the American Kennel Club, www.akc.org.
- Geriatric Owners & Pets. Not only are we living longer, so are our pets. As more and more Baby Boomers retire, Dillon anticipates a flood of products designed for people and older pets, such as ramps for older dogs to get up to the bed, and products which help older pet owners maintain their pets, such timed feeders.
- Young Guns. On the opposite end of the spectrum are the younger pet owners: the busy young professional who is marrying and having kids later in life. “They’re busy, they’re making money, they’re ready for the responsibility, so they get a dog. That demographic is also driving industry very very strongly.”
- Major Areas of Growth: the West & the Northeast. According to Dillon, the most growth in the pet market is occurring in California – San Francisco, Los Angeles, San Diego – Texas, Atlanta, South Florida, New England & New York. “Especially in metropolitan areas like New York, San Francisco, and Atlanta, there are lots of very nice boutiques for dogs. You go in, and there’s dark wood paneling, custom-made tempera-pedic beds, and that customer isn’t necessarily going to a Petco or a Petsmart.” Petco also sealed a smart marketing deal with the baseball park in San Diego, which places them squarely in the California baseball market. “You mix baseball with your pet, and you’ve got a lot of potential there.”
- Chain Stores vs. Boutiques. Chains like Petco & Petsmart dominate the industry, and are continuing to consolidate many goods and services under one roof. The key to success will be standing out with quality and branding. “Companies of different sizes are really trying to make themselves stand out in the market and that’s because of the consolidation that they’re adding a pet product to an existing line, like Polo or Tiffany, or, if they’re really expanding into it like Target or Walmart with new websites.” He praises companies like Central Garden & Pet , a large, California-based supplier of products to Petco, Petsmart, Target, Home Depot, Lowe’s for focusing on higher quality products and a good brand. ”It’s something that is just going to continue as the consolidation continues.” Despite the fact that there will be continued consolidation, it shouldn’t deter pet lovers with an entrepreneurial bent. “We’ll also continue to see more small companies and entrepreneurs start up retail boutiques. There is a lot of room in the industry for growth in a lot of segments. The industry is so big, that there’s a lot of interesting business opportunities in it, says Dillon. The pet industry is so diverse & growing so rapidly, there is a lot of room for specialized, high-end boutiques which cater to a petowner who might not necessarily shop at a larger chain. “There’s some overlap, but there’s a lot of room, in my opinion, for both of these types of retail outlets, both large and small.”
- May I Help You? Because so many petowners are looking for new services for their pets, pet services represents a huge trend, from babysitting, to grooming, to training. The services offered by Petco and Petsmart, such as their pet hotels and in-store doggie daycare – are adding to their bottom line at a stunning 20% or more annually.
- Dogs on the Catwalk. During Fall ’05 Fashionweek in New York this year, many scratched their heads in wonder at the fact that Target was having a full-fledged doggie fashion show under the tents at Bryant Park. Thank our stylish neighbors across the pond for this development. “Dog fashion shows and runway shows are something we’ll probably see more of in the United States. I noticed them a year or two ago starting to gain popularity in the UK and Europe, and now they’re really taking off here, and that tells me, again, maybe we’ll follow the human trends and go back to Paris and Milan for fashion, and bring them here.”
Our Pets, Ourselves
According to Dillon, just put the word “pet” in front of any hot human trend, and you get the corresponding pet trend. “There’s an increased consumption of high-end dog products and accessories, which mirrors the human trend of luxury buying,” explains Dillon. “That’s also being seen in things like the pet food industry: specialty dogfoods, organic and diet – all sorts of similar things to what we’re seeing for ourselves and what we want for ourselves.”
A major reason many of us pamper our pets to such a degree is that we don’t consider them “property” – rather, they are vital members of the family, a trend he has followed in the US for at least a decade. “There’s a humanization of dogs, and laws are slowly beginning to change across the country where dogs used to be considered property, and now they’re beginning to follow guardianhsip rights.” Dillon also questions where the limit is between man and canine: “Do I want to put dog on the Atkins diet? If I’m a vegetarian, does that mean my dog should be? “
Products that Mirror the Corresponding Human trend:
- Dog contraception
- Designer labels – such as Michael Graves & Isaac Mizrahi designed products sold at Target; limited edition Polo shirts & cashmere dog sweaters;Paris Hilton’s new line of dog “jewelry.”
- Health Insurance & Costs of Animal Care – owners will spend thousands on surgeries for the family pet. “Just like our healthcare system is increasing in cost, and drugs that you can give yourself for more and more diseases, it’s the same with pet insurance.” Dillon predicts that pet insurance in an industry set to “explode.”
- One Pill For Me, One for Fido. Popular pet meds mirror their human counterpart: allergies, skin diseases, arthritis. Petmed Express, www.1800petmeds.com, peddles pet drugs just like the pharmacy for humans.
- Custom statues of your pet for the memorial, such as those available at www.rainbowbridgepetmemorials.com.
- Drug R&D. Pharmaceutical giant Merck spends around $200 million a year developing drugs for pets and livestock, a figure Dillon predicts will not be going down anytime soon. They also publish the influential Merck Veterinary Manual.
The Next Big Thing
Because the pet industry is so diverse, it tends not to get swept up by a single fad or trend. However, Dillon has noticed an ongoing convergence between pets, the pet industry and technology.
- technology-based products for dogs and cats
- the Sony Aibo dog robot
- children’s internet sites like www.NeoPet.com in which you enter a made-up world & adopt a virtual, animated made-up pet. Interestingly, this site boasts 25 million users.
According to Dillon, “I’ve started becoming aware of an interesting convergence going on among retail, consuming psychology, and current technology. One CEO said we’re in the midst of a powerful evolution of the pet industry, referring to the humanization and the pet being one of the family. That is definitely something that should drive whatever the next big is.”
Where the Pets Go, But the Owner Decides.
Dillon finds somewhat disturbing the degree to which many products are marketed toward humans rather than the pets, with synthetic ingredients and colored dyes that could be quite unhealthy for a pet to chew and digest. “If you go into a Petco and look around, it’s a rainbow of colors and it’s a little overwhelming. And when you realize that, I believe, dogs are color blind, all of this is geared toward you. So that’s one thing that surprised me a little bit, and I do wonder sometimes about some of the products that are getting out there – are they actually good for the dog?”
Toys created specifically for animals would probably make even the most pet-friendly owner squeamish, such as the “perfect” dog toy which featured, yes, urine flavoring. “They ran some dog focus groups, and they were very excited, and the dogs really really liked this toy because it was something that dogs really like. They took it up to management who said, ‘are you crazy?’”
Pets: Status Symbol for the New Millenium
Because the practice of showcasing your lofty place in the world with suitably decked out arm candy is dying (except in some circles involving hairy men in bad, boxy suits), the new status symbol is the pet. “There are people showing off their pets around the world with a fancy necklace and nice accessories. It’s a modern way of saying, “I’ve made it. I’m a professional, I’m smart, I own a pet, I’m responsible, I make money.”
People’s attitudes towards pets are changing around the world, from the US, to Europe, to countries like Singapore, Japan, Korea, the Phillippines, and China. “I think that says something about globalization in general. It’s been happening in the United States for at least a decade, but we’re starting to see it worldwide in countries that not too long ago, and even now, still don’t treat dogs very well,” explains Dillon. “It has been interesting to notice that happening in cultures that that has not traditionally happened in, where a symbol of success has been something very, very different in the past. It represents something about a changing society, and I think China does represent that very well: it has restaurants that serve food to dogs and restaurants that serve dogs as food. It’s an interesting concept, but it represents the change in consciouness and what it means to have made it.