Take back control of your pricing strategy!

In recent months, there has been a lot of coverage in the press about the impact of online retailers on the pet business. Bricks and mortar retailers are suffering as consumers switch to online rivals. Often this is because the prices online are lower than in store. Whilst this is certainly an element, it is pretty clear that price is far from being the only reason for consumers to change their buying habits. Convenience, speed and high service levels are also major factors. Whatever the case, it is also clear that online retailers such as Amazon, Zooplus, Wanimo, Pet Supermarket and the many others have taken a share of the market, which has had an impact on the viability of many retailers. This is not just a phenomenon in the pet world, but is affecting almost all industries. We all know the impact Amazon and Kindle have had on the book industry and the inroads iTunes and other online retailers have made into the music industry. Increasing retail concentration Another major trend that continues to change the face of our industry is the growing dominance of large retail groups. In many countries, we have witnessed a rapid concentration of the trade, with a few big retailers growing rapidly and dominating the business. In Europe, retailers like Fressnapf, which has over 1 200 stores in 13 countries and, incidentally, has put a lot of effort in recently to launch its own online store as well, Pets at Home with over 240 stores in the UK, not to mention Pet’s Place, Tom & Co, Musti ja Mirri, Isola dei Tesori, Futterhaus or Arken Zoo, have more and more power over the market. As they have continued to grow, independent shops have been forced to either up their game or join up with these or other groups in order to get the pricing and marketing benefits of scale that the big players have. Many have gone out of business, though, and thus the big players become ever more dominant. This is not to take anything away from Fressnapf and the others: they have been extremely effective, built strong brands (often stronger than the products they sell!) and met consumer needs better than their competitors either in the pet speciality arena or the grocery world. Their market power extends to effectively determining which brands and products are successful, particularly for new brands and for new and smaller companies. They control so much of the retail space that they can determine which products consumers can find and buy. Not only do they have distribution power, but…