Just when you thought Trend Season was over for 2011, the Embrace Pet Insurance annual pet-related small business trends article is now available on the Embrace website for your reading pleasure.
In the meantime, here is a summary for you, just in case you don't have time for the full version.
__________________________________________________
The current recession continues to affect the pet world. Although the pet industry has delivered positive growth in spite of the Great Recession, the pet industry is not immune to sagging consumer sentiment. Pet-related spending in 2011 will show an increase over 2010 levels but not at the robust rates we saw prior to the recession.
1. Spending on Pet Accessories and OTC Medicine Up
Even during the darkest days of the recession, spending on accessories and OTC medicine grew at 2%, showing that pet parents will cut back on their own expenses before those of their pets.
The APPA projects growth levels back to pre-recession levels of 5.8%. Whether we see a rebound to to this level remains to be seen but there’s no doubt it will pick up again in 2011.
2. Continued Growth in Services for Pets
According to the APPA, pet services continued to show growth in 2010, although not quite reaching the 6% level projected. In fact, growth is projected to nearly halve, from 5% in 2009 to 2.8% in 2010.
Retail behemoth Wal-Mart has rolled out pet grooming facilities but not with the characteristic aggression you might have expected. Pet travel services, such as temporary day care for pets, are definitely a niche with plenty of room to grow. Who better to pioneer the idea than Disney, which has finally caught on to the trend of vacationers travelling with their pets, opening the Best Friends Pet Care luxury dog and cat resort right across from the Walt Disney World Resort.
3. Veterinary Spending Doggedly Increases
While growth in pet supplies and services might be “languishing” in the 2 to 4% range over the last couple of years, veterinary services continue to surge ahead. This year, the APPA projects 6.2% growth but I wouldn’t be surprised if it were even lower given the historically low level of veterinary inflation we’re experiencing.
General veterinary hospitals will benefit as pet parents choose to have complicated surgery and treatment at their regular (and cheaper) veterinarian rather than at a specialty hospital.
4. Pet Insurance Inching Into Mainstream
The US pet insurance industry was not immune to the recession in 2009 and 2010. Gross written premiums (GWP) reached $290 million in 2009 [2] and are projected to reach $327 million (12% growth) at the end of 2010. I expect overall premium growth of 14% in 2011 that will see the US pet insurance industry grow to $374 million in GWP.
5. Digging Further into Cat Health
CATalyst, a non-profit group aimed at reducing the perception of cats as aloof and not needing human contact or care, launched a new program in 2010 to encourage and educate veterinarians to turn around the declining number of vet visits and it may be one way veterinarians are bolstering their revenues during the tail end of the recession.
6. Pet Businesses Thrive Socially
Social networking in the pet space went mainstream in 2010, drawing out large and small organizations, as well as pet-focused individuals looking to help out pet non-profits who amongst companies of all sizes.
2010 saw the first social media conference solely for pet bloggers, Blogpaws, closely followed by BarkWorld, covering a broad spectrum of pet social media. On the non-profit side, while many rescue organizations are using social networking as part of their funding drives, pet lovers are taking fund-raising into their own paws with online “pawpawty” events on Twitter that raise thousands of dollars for charity at a time, as well as “personal” fund-raising drives, where pet parents finding themselves in a financial predicament over their pet’s health are turning to organizations such as GiveForward to help raise the necessary funds.
7. Large Retailers Still Playing to Win
Target and Wal-Mart continue to expand their pet aisles and, in the case of Wal-Mart, their pet services; however PetSmart and Petco continue to dominate the pet retail space despite these encroachments.
8. Customers Are Talking About You Online
Online reviews continue to have great impact on the purchase of pet products and services. Pet parents looking for a new veterinarian in their area can turn to Yelp.com, those checking out pet insurers go to PetInsuranceReview.com, and of course, Amazon provides customer reviews for everything they sell or advertise.
9. Pet-related Businesses Have Unfulfilled Ecommerce Aspirations
In 2010, there was a paucity of web development in the pet world – a missed opportunity indeed. This really is an area that can make a small business stand out but it is much harder and more expensive to accomplish than one would think.
10. Pet-related Blogs Become Everyday Reading
Pet-related blogs will continue to influence in 2011 as pet parents integrate blogs as a daily part of their informational lives.
Bloggers such Pet Connection, Pawcurious, About.com’s Dr. Janet Crosby and Yes Biscuit! continue to gain respect and readership, building a small but influential community around their blogs. There are few more mainstream pet bloggers, Martha Stewart being the only one I can think of (both Martha and her dogs blog), which surprises me. Most large pet-related brands have a blog, although some are not much more than blatant product marketing instead of quality conversations with pet parents. Eukanuba and Petco lead the pack in engaging readers with their brands. Look for more large brands to jump on this wagon in 2011.
And one final bonus trend…
11. Veterinary Advice Goes Virtual
If you ask most veterinarians about online veterinary advice, they’d strongly denounce such interactions as amateurish, unqualified and even life threatening. Having said that, there is a need for a second opinion on a condition or perhaps clarification something their own vet that can be provided by qualified online veterinary services such as VetLive.com or PetDocsOnCall.com. I expect we will see discussion around and use of this convenient veterinary service grow in 2011.
You can find the details on the Embrace website on the Pet Business Trends 2011 page.
Related Posts:
Pet Industry Trends 2011
Pet Industry Trends 2010
Pet Industry Trends 2009
Pet Industry Trends 2008
Pet Industry Trends 2007
Pet Industry Trends 2006 About the author: Laura Bennett FSA CFA is the CEO and Co-Founder of Embrace Pet Insurance. Her career working in the insurance industry has taken her from Toronto, Canada and Dublin Ireland to the US, where she obtained her MBA from the Wharton School of Business at the University of Pennsylvania. Laura was the first pet insurance actuary in the United States and was named to the Society of Actuaries Top 100 Actuarial Pioneers for her ground-breaking work in pet insurance. Laura strongly believes in furthering awareness of pet insurance across North America and leads that work in her current role of Chairman of the Board of NAPHIA, the North American Pet Health Insurance Association. Laura also writes a blog on pet-related issues, the Embrace Pet Insurance blog.
