Market Sector Report: Pet Mailers Mark Their Territory

More than 63 million U.S. households have pets — up 2% from 1998, according to the American Pet Products Manufacturers Association. And if it’s true that U.S. consumers gravitate toward cuddly things such as kittens and puppies during political and economic crises, the pet supplies market sector may see gains this year while other market sectors struggle.

List strategies

Ask a dozen pet supplies catalogers what method of prospecting work best for them, and you’ll get a dozen conflicting responses.

For Rhinelander, WI-based pet products cataloger Doctors Foster & Smith, list rentals account for 90% of its prospecting activities, says cofounder Dr. Race Foster. “We rent compiled lists or lists with names matched by brokers who have profiled our house file. And we rent the names of subscribers to various pet magazines.” Of all the lists, Foster says that magazine rentals tend to be the least successful in the short run. “We usually receive a 2% or less initial response,” he says — though some may argue that even a 2% response on any list is successful. Of the cataloger’s annual circulation of roughly 40 million, 10% of catalogs are mailed to rented names.

Competitor KV Vet Supply of David City, NE, has had mixed success with list rentals. “The number of names we rent varies on the year,” says Dr. Raymond Metzner, president/CEO of the catalog, which has an annual circulation of about 2 million. “Response rates will range from less than 1% to 5%, depending on the source of the list and which mailing we’re using it for.”

For catalogers looking to break into the pet supplies business, especially those intending to sell to veterinarians, breeders, groomers, or other professionals, there is a gray area with respect to the business-to-business and consumer markets. Aside from New England Serum Co., the pet supplies catalogers interviewed by Catalog Age make 90%-95% of their sales to consumers or to groomers who work from their homes.

“It’s very hard to determine in this business who’s a consumer or a business,” says Bill Scolnick, president of Oakland, NJ-based J-B Wholesale Pet Supplies. “A business customer may be someone who does occasional grooming in the house. So there’s a shadowy area in the pet business of people who are semi- or quasi-businesspeople.” Scolnick says that during J-B Wholesale’s 22 years in business, its mix of customers has shifted from primarily professional show-dog trainers and groomers to consumers who own more than one dog.

Nonetheless, Topsfield, MA-based business-to-business pet supplies cataloger New England Serum has had regular success with compiled lists, says president Andy Katz. Renting trade magazine lists have been less effective, Katz says, because “most of those names are already available through the compiled lists.”

Compiled lists also tend to be cheaper than other rental files. According to a spokesperson for list firm ALC of New York, the base price for an average compiled consumer pet file is $65/M-$70/M. Popular selects for those files, such as ethnicity, can cost an additional $10/M, while selects such as age, income, and homeownership cost around $5/M. But, the ALC spokesperson notes, “often on a test order we’ll waive those selects charges.” The average base price for a b-to-b compiled pet file is $60/M.

Going against conventional wisdom, several consumer pet suppliers mailers have succeeded in renting names from catalogers that don’t specialize in pet supplies. “Some have had success testing the names from high-end gift catalog lists, such as Hammacher Schlemmer or Herrington,” says Margaret Iadeluca, senior vice president for ALC of New York.

Iadeluca surmises that the relatively high income levels of those buyers make them attractive prospects, “but those lists are still a secondary option [for pet supplies catalogers]. Most right now are sticking with primary, targeted files such as proven mail order pet supplies buyers, rather than testing secondary files.”

Advertising, offline and on

Lancaster, PA-based That Pet Place, which mails the That Pet Place and That Fish Place catalogs, relies more heavily on space ads in pet-related magazines than on list rentals, “because the readers of those magazines are truly interested in pets,” says advertising and marketing director Doug May.

Doctors Foster & Smith advertises in magazines too — but not necessarily because it wants to. “It is typically not that successful,” says Dr. Foster. “We do it mainly as a prerequisite by some magazines for renting their names.”

On the b-to-b side, New England Serum runs 75-100 space ads a year in such pet trade publications as Pet Age and Pet Retailer. Katz says the company, which mails its catalog monthly, had reaped steady response from its ads, though he won’t reveal specifics.

J-B Wholesale has had less luck winning b-to-b buyers via ads in trade magazines. “We’ve found space ads less and less effective for prospecting,” Scolnick says. “We’ve been running ads in dozens of pet trade magazines for 18 years, and they don’t gain enough new customers every month anymore. Professionals no longer consider them important in the dog world. And because we have an active Website that has become more effective for prospecting, we’ve cut our magazine advertising in half.” J-B’s site has pulled as many as 3,000 catalog requests in any given month — and those prospects are far less costly than those generated by space ads.

More costly were the banner ads J-B ran on America Online’s pet section through the middle of 2001. “It was very expensive, but we found it was excellent institutional advertising,” Scolnick says. “AOL found the section was unprofitable, though, and closed it down.”

New England Serum advertises online on the Pet Groomers Lounge, an advertising-supported site that provides information for pet groomers. For a top banner-ad spot on the site, advertisers pay just $1,000 a year plus a $20 setup fee. New England Serum also advertises on another information site, Petgroomer.com, where ad rates range up to $7,500 for banners.

Alternative methods

For many pet supplies catalogers, events such as dog shows are a key source of names. “We have a road booth at major dog shows across the country,” says Mark Godsil, president of West Central, IL-based J and J Dog Supplies, which sells dog training supplies and equipment. “At many of the shows we sell our products retail as well as hand out our catalog. I can’t put a specific response rate on it, but it is successful.”

KV Vet Supply does not sell its product at industry events, but it does promote itself at some of them. “We advertise at a handful of shows, such as equine shows,” says Dr. Metzner, whose company’s catalog includes equine supplies. “We’ve found that through some of our show advertising, we’ve seen an increase in business, although we haven’t really tried to measure it.”

Some catalogers rely on exchange agreements with animal clubs to bolster its prospects. “We try to be supportive of dog training clubs nationwide,” says J and J’s Godsil. “We regularly send inventory items that they can use for raffles for their fundraising efforts. In return, the clubs give our catalogs to new dog training students, who in turn become our customers.”

Similarly, That Pet Place and Omaha, NE-based Omaha Vaccine use an exchange system to get new names. “We have dog and cat clubs that ask for donations, and in return for a donation they give us their member listings for inquiries,” says Omaha Vaccine CEO Scott Remington.

“People in the clubs are very involved in their pets,” notes That Pet Place’s May, “and generally respond well.”

Some pet products mailers, including Doctors Foster & Smith and New England Serum, have used postcard mailings to remind existing customers to revisit their catalogs or Websites. But for New England Serum, “they have not been particularly effective,” Katz says, “partially because we sell more than 15,000 products to petcare professionals who aren’t motivated by a product or two on a postcard.”

No beating word of mouth

For many pet supplies marketers, gaining new customers can be as basic as simple word of mouth, as many pet enthusiasts tend to know other pet owners. “One way we generate new leads is that our customers tell their friends about us, and those friends request our catalog,” says Omaha Vaccine’s Remington.

“Customer recommendations generate by far our greatest response rate,” says KV Vet Supply’s Dr. Metzner. “It can be in excess of 10%, which we track through the call center by operators who, when they ask for the source code, are told by the customer that they are using a friend’s catalog.”

U.S. Population Ordering Pet Products and Supplies by Mail, Phone, or Internet
TOTAL BY MAIL BY PHONE BY INTERNET
3,199,000 1,371,000 1,504,000 674,000
Source: MediaMark/DMA Statistical Fact Book 2001

“We rely a lot on word of mouth,” agrees Dr. Foster. “People will send [catalog subscription cards with] the name of a friend.” But overall, the cataloger does not do heavy prospecting, he says. “Instead we focus almost entirely on customer retention. If we can’t get that repeat order, we can’t make money.”

Dog Bed Boom

Dog beds, it seems, are not just for pet supplies catalogers. For years, the canine cushions have been big sellers for outdoors-oriented catalogers L.L. Bean and Orvis. Several more mainstream catalogers also offer dog beds, including gifts marketer Plow & Hearth and general merchant Spiegel. Even cooking products mailer Chef’s Catalog carries a waterproof dog bed designed for the patio or deck. Dog beds typically range in price from $20.00 to $69.99, but upscale gifts cataloger Hammacher Schlemmer appears to offer the Cadillac of dog beds for $139.95. The Memory Foam therapeutic dog bed is designed to “promote healthy circulation while keeping dogs warm and comfortable, even if the bed is placed on a hard floor.”

Pet Owner Stats

  • At least one-third of all homes in the U.S. have a dog or a cat.
  • Americans own an estimated 68 million dogs, 73 million cats, 19 million birds, 9 million reptiles, 159 million freshwater fish, and 19 million other small animals.
  • 47% of U.S. households own more than one type of pet.
  • More than 60% of pet owners (excluding the owners of reptiles and fish) said they bought gifts for their pets.

Source: American Pet Products Manufacturers Association 2001/2002 National Pet Owner’s Survey

Lists in the Pet Market

DOG OWNER MAIL ORDER BUYERS

Dog owners who want to receive promotions on how to care for their pet.

Universe: 8,325,955 names

List manager: Mail Marketing, 201-750-3222

GREAT COMPANIONS SPECIALTY PET PRODUCTS

Catalog buyers of healthcare products, cages, toys, training aids, books and videos for dogs, cats, birds, and tropical fish.

Universe: 23,389 names

List manager: Names & Addresses, 847-465-1500

PET OWNERS FILE

Pet owners compiled from mail order purchase information, rebate coupons, subscription order forms, municipal records, show registrations, surveys, and questionnaires.

Universe: 145,997,214 names

List owner: Act One Lists, 800-228-5478

PET OWNERS AND PRODUCT BUYERS

Animal lovers who own at least one dog, cat, bird, or fish.

Universe: 4,124,778 names

List manager: ALC of New York, 212-924-1300

PREMIER DOG AND CAT LOVERS

Families with household pets.

Universe: 4,411,024 names

List manager: Mal Dunn Associates, 914-277-5558

Source: SRDS

Pet Enthusiast Magazines for Targeted Advertising

Bird Talk: Fancy Publications. For information about display advertising, call 213-385-2222; for information about classified advertising, call 949-855-8822.

Bird Times: Pet Publishing. For information about advertising, contact sales@petpublishing.com.

Cat Fancy: Fancy Publications. For information about display advertising, call 213-385-2222; for information about classified advertising, call 949-855-8822.

Cats & Kittens: Pet Publishing. For information about advertising, contact sales@petpublishing.com.

Dog & Kennel: Pet Publishing. For information about advertising, contact sales@petpublishing.com.

Dog Fancy: Fancy Publications. For information about display advertising, call 213-385-2222; for classified advertising, call 949-855-8822.

Dog World: Fancy Publications. For information about display advertising, call 213-385-2222; for classified advertising, call 949-855-8822.

Horse & Rider: Primedia Enthusiast Group. For advertising information, contact 301-977-3900.

Rabbits: Fancy Publications. For information about display advertising, call 213-385-2222; for classified advertising, call 949-855-8822.

Source: SRDS

Previous Market Sector Reports published in Catalog Age have focused on children’s products, consumer electronics, business-to-business school supplies, and office products. To review any of these reports, visit the Catalog Age Website at www.CatalogAgemag.com.

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