Pet supplies are the third biggest eCommerce CPG category across the industry, and pet product sales on eCommerce sites are estimated to grow at 9.4% in 2022.
This expected growth comes with many challenges that brands may not be ready or equipped to tackle. There are many different threats pet supply brands face on online marketplaces that can disrupt sales, pricing, reputation, product quality, return on ad spend, and more.
Natalia Steele, Partner at Vorys eControl, is deeply experienced in the pet supply industry, so we asked her some questions on the state of eCommerce in the pet supplies category and how brands can address growing eCommerce challenges.
Steele: The pet supply market is very competitive, with many “professional” and “hobbyist” resellers able to divert products from authorized channels of resale, ultimately causing significant problems on online marketplaces like Amazon.
Steele: The industry’s competitive landscape is saturated with numerous small and large distributors. It is the distributors’ efforts to serve eCommerce sellers and the brand’s promotional strategies that allow unauthorized resellers to gain access to branded products quickly and with little vetting. As if that is not enough, retailers’ promotional and liquidation activities combine to further interfere with the brand’s go-to-market strategies.
Steele: We work with each brand to understand where they are most vulnerable to diversion into unauthorized channels of resale—pricing and promotions, distribution controls, liquidation, and donation practices, etc. and customize a plan for minimizing the effects of internal and external disruptors on the brand’s growth and control strategies. We also have extensive experience pursuing diverters specializing in pet products and employ data-driven precision enforcement tactics to neutralize unauthorized online sellers in cost-effective ways.
Steele: Large distributors are always innovating ways to automate their sales and delivery systems to the point where resellers rarely have to receive/warehouse/ship products themselves, thus lowering barriers to entry and incentivizing more unauthorized resellers to compete on the marketplaces. In addition, Amazon, Chewy, Walmart, and other major retail outlets are in a constant battle for customers, which, when one or more of these platforms is out of control, can very quickly impact the brand's entire ecosystem and hard-earned equity.
For further insights into implementing an eControl program within the pet supply industry, read our Pet Care Case Study.
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