How the pet industry is addressing inflation, convenience, and health and wellness in 5 charts

Consumers are increasingly shopping online for pet products out of convenience, choosing premium health and wellness-focused products for their furry friends.

1. Sales are going up, but inflation may be why

We forecast US retail sales of pet products will reach over $80 billion in 2023, a 3.0% increase over 2022.

In a Q3 earnings call, Ron Coughlin, CEO of Petco, noted that customers continued to gravitate toward premium brands, despite inflationary pressures.

2. Shoppers increasingly buy pet products online

Nearly half (45.7%) of all US pet products sales will be made online by 2025, the highest ecommerce penetration of all grocery products. In 2020, the number was only 31.0%.

Retailers are leaning into that desire by offering subscription programs, which, in addition to streamlining the shopping journey, help to increase repeat engagement among customers.

3. But online behaviors are changing

In September 2022, online traffic started to branch out as the top three sites lost share to brands like Purina, Hill’s Pet Nutrition, and Pet Supplies Plus.

Health and wellness products are also becoming more popular. For example, PrettyLitter, which helps owners monitor their cat’s health, is up 37%, and Embark Veterinary, which sells dog DNA tests to determine breed, health, and age, is up 42%.

Subscription-based BarkBox also lost ground (down 29%). Which leads us to …

4. Subscription fatigue is setting in

While pet and animal products made up only 5.6% of worldwide subscription share in 2021, there’s a huge opportunity for retailers to move toward mainstream adoption.

Subscription fatigue is threatening the long-term growth of ecommerce subscriptions. To keep existing customers engaged (and grab the attention of a dwindling number of new customers), subscription providers need to choose between product discoverability and convenience.

5. Chewy’s got a lock on customer loyalty

As of Q4 2022, Chewy’s autoship program represented 73.3% of the company’s net sales, growing from 70.6% in 2021.

The strength of its autoship program has paved the way for the company to launch a retail media solution, which will likely leverage the data of its 20.5 million active customers.

The bottom line: Pet parents won’t stop spending on their furry (or scaly) friends anytime soon. Sales will be driven by customers seeking premium brands that focus on the health and wellness of their pets.

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