What the ‘recession-proof’ pet care category shows about retail ecommerce

Inflation for pet food and services was over 10% in May, according to the US Bureau of Labor Statistics. But the category has won a reputation of being somewhat recession-proof, thanks to its necessity for pet owners. “It’s recession-proof,” our analyst Suzy Davidkhanian said on an episode of our “Behind the Numbers: Reimagining Retail” podcast. “You can’t not feed your pet.”

Pet project: Retail ecommerce growth is high for the pet category, where people shifted online during the pandemic.

• This year, 38.4% of pet product retail sales will be online.
• By the end of 2027, we forecast 51.0% of pet product sales will take place online.
• There are only three categories we track that will have a higher ecommerce sales penetration than pets by 2027: books, music, and video; toys and hobby; and computer and consumer electronics.
• “[The pet category] lends itself very well to subscription- and/or replenishment-type items,” noted our analyst Suzy Davidkhanian.

The D2C play: Chewy, one of the fastest-growing large ecommerce companies in the US, will grow 11.0% this year. Other D2C brands like Bark and The Farmer’s Dog have gained popularity.

• “These smaller brands can really find their place by doing a lot of personalization, which I think works much better online,” said Davidkhanian.
• Pet products will make up just 2.3% of Amazon’s US ecommerce sales this year, according to our forecast, but will still account for a third of all US pet retail ecommerce sales. Amazon’s pet ecommerce sales will grow slower than the overall category this year, at 9.0% compared with 14.2%.

Lessons for retailers: Offering ancillary services related to pets can be a great way to draw in customers or expand margins. For example, Walmart+ recently included pet telehealth visits in its subscription service.

Pets (and pet parents) can become lifelong customers. “If you can keep that customer, it’s very, very valuable because there’s a chance that maybe they’re not going to churn for a while if you do everything right and if you treat them well,” said Goldman.

Listen to the full episode.

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