Pet-Smart or Stupid?

Brand Differentiation in the Pet Care Industry

Some of you may not remember, but close to three years ago PetSmart used to be PetsMart. In September of 2005, the company changed its name and, according to Phillip Francis, CEO, they made the change because they wanted to become, in the eyes of a customer, less of a mart and more of a smart place to shop.

Now that several years have passed since the "re-branding," I decided to check back on the pet retailer. Findings made by myself and two former classmates from the University of Michigan (Jake Chapman and Lisa Schoder) confirm the argument that changing their name still does not give PetSmart enough brand differentiation to create a competitive advantage in the market place. For example, let's look at the company's top competitor - PETCO. PETCO has similar a name, their logo looks very comparable to PetSmart's when you squint at it (both start with the word "Pet" and are styled in red, white, and blue). And when you visit the stores of both of these companies, there is no unique experience to be had.

So first of all, what do we know about the "Pet Economy" in the United States?

• The “Pet Economy” in America now exceeds $41 billion per year
• Around 63% of all U.S. households own at least one pet
• The two largest competitors in the pet supply industry = PETCO and PetSmart (combined market share of 53% in 2006)
• PetSmart, in their 2006 Annual Report claimed: “our business is about relationships. It’s about the bond our customers have with their pets. It’s about our ability to understand those emotions, and to help the people who shop in our stores enrich that bond. It’s about providing our customers with superior service, understanding their needs and helping them find solutions that make them better, smarter and more confident pet parents. Today, pet parents want to provide the best level of care for their pets, who are valued members of the family.”

What did our team find when investigating the two largest pet supply competitors? We discovered PETCO and PetSmart were lacking in brand differentiation. The stores (and websites for that matter) had bland layouts, a cold feel, similar products, and, surprisingly, a major lack of customer service. All three of our group members visited various PETCO and PetSmart stores in the Detroit area with our dogs. We all discovered a complete lack of attention from store employees. For example, when I walked in the store and proceeded to wander around the store like I was lost, no one offered to help me or even greeted my pet. I felt like I was just visiting any old store. Looking at various rating sites, it appears that other pet owners also weren't impressed with their in-store experiences. Some common customer themes/complaints about PETCO and PetSmart include:

• Products in various stores aren't always located in the same places which makes them difficult to find.
• Customers aren't sure if they're getting the best deal on products. Several noted they could order some of the products on-line for a better price.
• Store visitors did not like the pressure sales (specifically from food reps).
• Some stores seemed to lack knowledgeable store employees and some did not appear to employee people who were interested in or even liked pets.
• Customers seemed to have mixed results with grooming services and some stores grooming areas were overbooked/overcrowded.

Although these were common complaints, some customers raved when:

• The employees recognized them as a regular customer and remembered their pet's name.
• The store provided them with unconventional surprises and delights. For example, one store’s employee actually ate a gourmet dog biscuit to show how tasty it was.

So how do you take these various consumer wants, add in some surprise and delight features, and differentiate yourself from competitors? Jake, Lisa, and I had many ideas in a report we produced entitled "Experience Co-Creation in the Pet Care Industry." Although the report is too detailed for a blog entry, here are some of the suggestions we had that were focused on actions affecting the customer experience in-store and via services.

In Store

• Strategically-placed Information Kiosks: Adding kiosks where customers can access online reviews and product ratings will assist customers in making informed decisions and also help employees become more knowledgeable about products PetSmart carries. The kiosks could also include an interactive store map to help customers find products within the store and be used to help customers research breeds, pet care providers, listings of pet-friendly parks, and local pet events. There could even be a breed-matching program installed here to help potential pet owners identify animal breeds that fit with their various lifestyles.
• Add “Pet Introduction” areas to the front of stores: Allowing pets to join in the shopping experience is a unique feature of PETCO and PetSmart stores. People who bring their animals into the store are aware of their pet's demeanor, and in most cases the animals brought into the store are friendly with both people and other animals. Presently, the aisle ways cause problems when pets are overly eager to meet and knock products off of shelves in their attempts. A solution to this issue would be a central open area within the store where pets could do a "meet and greet" and be able to interact in a safe environment. This would allow a more relaxed introduction and would foster the sense of community within the store.
• Add In-Store Pet Play Spaces: Upon registration/shot record approval, owners can sign-up online (or in store) to bring their pet to free, supervised play dates. PetSmart could create a distinct play environment in-store - more "home like"/less-cold. This could make the local store a community destination in addition to a retailer. While in the store for a play date, owners are able to purchase food, toys, or other necessities for their animals.
• Increase interaction between store employees and customers: As revealed by our visits to various PetSmart stores, the employee-customer experience leaves much to be desired. To improve this and create a solid relationship with customers, PetSmart could position a Wal-mart style greeter at the front of the store with a treat pouch. This greeter would address pets and their owners when they are entering stores. A surprise and delight feature could be accomplished through adding RFID tags built in to customer loyalty cards (with the customer name) and the pet's ID tag (with the pet's name). When the customer enters the store, an RFID reader would transmit onto a handheld device allowing employees to instantly have info on who the person/animal is, their common purchases, etc. This would help to connect the employees to the individual customers to help in the relationship building opportunity within the store.
• Expand pet sales strategy: Due to some of the boycotting of PetSmart and PETCO for selling "overpopulated" pets, what if PetSmart took an initiative to act as a shelter in lieu of allegedly selling pets from "puppy mills?" The company could partner with purebred rescue organizations and establish partnerships with non-commercial breeders. Another opportunity would be to provide information about training particular breeds or a breed-match program to assist in selecting a breed that suits people’s needs. By assisting in matching pets to owners, PetSmart can help to reduce the number of unwanted animals that end up in shelters.

Services
Services are a unique area that provide a natural connection between the in-store and on-line experience platforms. Many Americans love to pamper their pets with luxury services ranging from massages, to pedicures to designer clothes and accessories. Services provide a great growth opportunity for PetSmart. Some stores have already expanded to offer overnight/boarding for pets. According to a 2007 IbisWorld report, services currently represent about 9% of overall industry revenue, and are supported by an annual growth rate of approximately 7%. This category is currently highly fragmented. Here are some ways PetSmart could expand into the pet services business:

• Create “Lose Weight with Your Pet” Programs: According to a 2004 CDC survey, more than 66% of Americans older than 20 are currently overweight or obese! A walk through the park reveals that many dogs suffer the same conditions as their owners. PetSmart could sponsor weight loss exercise groups, potentially even partnering with a local weight loss organization. Participants could meet at a local PetSmart store to go on a walk with friends and their pets with the stored providing poop bags, water/treats at end of trip (for the pets), and information about pet nutrition. This would foster community spawn friendships and also create an extra visit to PetSmart for customers.
• Create local pet parks: In cities / suburbs, PetSmart could sponsor pet parks. These would be safe-fenced areas that could also be used for pet exercise and socialization, PetSmart dog obedience classes, as well as outdoor pet competitions (obedience, agility, etc.). Brand awareness and community goodwill would be the primary benefit of this initiative, which could help to improve customer store visits and brand loyalty.
• Grooming on the Go: Access to services is another area where PetSmart could innovate. While the company currently offers a wide variety of custom grooming services as well as the option to use the store’s equipment to groom your own pet, PetSmart could offer a mobile grooming service for busy pet owners. Improved access (saved time) would be greatly appreciated by busy professionals. A premium could be charged for these services. The mobile grooming service could be scheduled on-line and the vans could also be used to deliver food and other products purchased by the customer on-line at the time they scheduled their service visit.
• Vacation Planning for Pets: For any pet owner, vacationing with or without a pet is a challenge. Utilizing the in-store kiosks and their website, PetSmart could assist owners in finding pet care when they go on vacation or work trips. This service could be enhanced by including such things as pre-screened "foster homes" complete with photos of home/other pets/amenities (fenced yards, living areas, etc.), availability calendars for pet sitters, the sizes of pets pet sitters accept, and recommendations from other pet owners who have used a specific sitter’s services. PetSmart could also offer travel advice, certifying places/ hotels/ airlines/ etc. for pet friendly travel. Additionally, they could offer tips as to which airlines are the most pet-friendly, which crates are the best for carry-on, tips to surviving layovers, etc. PetSmart could also work with select major airports to create brand-sponsored pet rooms or courtyards within the secure area (airports have smoking rooms, why not a pet room). This would be a major convenience factor to pet owners. Presently, pet owners must take their pets outside to "do their business," requiring them to go through the security screening process all over again.

Scotts Gets Co-Creative with Customers

It's approaching mid-March and STILL winter here in Michigan (yes, I'm getting a little stir crazy from all the cold weather). In fact, I shoveled another 5 inches of snow from my driveway just last week. But that doesn't prevent me from thinking about spring and all the things that come with it - flowers, green grass, warm weather, gardening. I've actually started browsing mail order catalogs trying to figure out what plants to add to my garden this year. So the Scotts Company had perfect timing when they sent me an e-mail announcing their new "Miracle Grow" website.

For those of you who aren't familiar with the Scotts Company's brand portfolio, it consists of Scotts, Ortho, Round-up, Miracle-Gro, and most recently, Smith & Hawken. (In October 2004, the Scotts Company acquired Smith & Hawken for $68.5 million and announced plans to sell Smith & Hawken items at major retailers like Home Depot. Many of you may be Target shoppers and have noticed the dedicated Smith & Hawken aisle...with higher priced gardening/home decor items.)

The Website
On Scotts' new site, the login screen reads: "It's all about you. Jump in and customize your experience.

• Save your supply lists: Keep track of everything you need from the store.
• Create personal blogs: Share stories of your lawn and garden prowess.
• Participate in forums: Post questions and get answers quickly.
• Offer ratings and write reviews: Give your opinion on products and projects.
• Get customized recommendations: Get info based on your specific interests.
• Make a personal page: Keep everything in one convenient place.
• Grab what you need: Download personalized info to your desktop."

Sounds like they thought of just about everything a web-savvy gardener would want! Exploring the website I discovered several useful areas. For example, you can customize your own lawn care program. Through inputting some information, the website will give you recommendations on fertilizers, watering, etc. for different zones and grass types. I think a lot of this information was available on the old website, but not as easy to find and with less detail. There's also a link called "My Supply List " where you can add the Scotts products you want to purchase to a list you can print out and take to the store with you. In looking into the other areas of the site, there were spaces to:

• Grow- An area where you can find information about lawns, various types of gardening (flower, vegetable & herb, indoor and container), birds and wildlife, trees, hedges, hardscapes and organics.
• Learn - An area with links to projects including a "learning library," annual lawn care program, and lawn & garden calendars. This area helps take the guesswork out of yard work, providing you with things like seasonal feeding, watering and maintenance plans (you click on your region of the country to get the perfect plan for you) and help in identifying your grass type.
• Solve - A section on the site for you to find solutions to problems. For example, it can help you identify what may be causing those round patches of brown grass in your lawn.
• Connect - The key interactive part of the website where you can join the Scotts Lawn community, post and browse photos in lawn, garden, and pet photo galleries, start your own gardening blog (or read someone else's), post comments or ask questions in online forums, receive advice from Scotts' experts, and sign-up for email newsletters/hot issues alerts (ex. if there's an unusual insect infestation in your area).

Besides areas to "grow" and learn you you can create a profile that will be your identity when participating in the Scotts Lawn community. So what might your profile page look like? Below is what I created in a couple of minutes. You can upload a photo, and tell everyone about your dream job, what you do to relax, where you'd love to visit, your favorite type of music, what neighbors say about your lawn, and your zodiac sign (what some of this has to do with yard work and gardening I have no idea. I'd personally prefer to list areas of gardening I like, yard specialties (for example, maybe you have a knack with roses...this would be good for others to know in case they are looking for some advice). And things you need help with. For example, some of my plants are a magnet for spidermites.)

My Thoughts
First of all, I want to give Scotts props for getting co-creative with its customers. What do I mean by co-creation? Co-creation essentially means a company wants its customers to create their own unique experiences with their product/brand. To accomplish this, the company will provide some sort of platform for users (in this case a website allowing for some personalization). The results of this are easier access to consumers and their opinions, which generally helps assist the company in making better products and service experiences for its customers. Instead of being one-way interaction (i.e. Scotts providing all of the information to it's customers), it allows for multiple-way interaction - customers can interact with each other and with Scotts, customizing the experience to be unique for them. Personalization...gotta love it.

I have a feeling Scotts will get some great feedback from its customers as a result of this site's launch. As more people use the site, they'll also discover what improvements/additions customers would like to see be made. Something I'd like to see Scotts improve on, for example, is in the lawn care program section. I'd like this section to let me put in the actual date that I applied my last lawn treatment and then send me an e-mail when I need to apply again (right now it will notify you of generic timing when to apply, but doesn't record when you actually applied the treatment to your lawn.). I'd also like to see some minor mods to the profile area - although putting in my zodiac sign and favorite type of music might be fun, it doesn't really help other community members know where my lawn & garden expertise may lie -or- in what areas I could use some help. These are just minor things and overall, I think this site is a great start to getting more in touch with customers. Being a lawn & garden enthusiast, I know I personally will be using the Scotts site as a resource for my growing tips, helping make my thumb a little more green...even in the months that Mother Nature isn't cooperating with me :)