by Shannon Landry
October 28, 2024
The top opportunity for pet industry participants – including vet and pet care service providers – will be to help pet owners manage costs.
Despite numerous indicators that the US economy is on the path to recovery, consumer confidence remains low. In September 2024, The Conference Board reported that the consumer confidence index had dropped to 98.7 over the prior month, the largest decline since August 2021.
Their tenacity in pet care spending notwithstanding, pet parents are hardly immune to economic concerns, challenges, and setbacks. Packaged Facts January 2024 Survey of Pet Owner data show that 17% of pet owners faced significant challenges with the high cost of pet services, forcing them to make cutbacks.
In this environment, the foremost opportunity for pet industry participants – including vet and pet care service providers – will be to help pet owners manage spending and costs. This consumer-centric focus encompasses offering products and services designed to facilitate do-it-yourself (DIY) pet care, money-saving options through subscription and membership programs, pet insurance and wellness plans designed to make spending more predictable and pet care more affordable, flexible payment options, and targeted promotions.
With pet owners on the lookout for ways to finance their shopping and manage their spending, Millennials and Gen Xers especially are interested in flexible payment choices. In Packaged Facts’ January 2024 survey shows that nearly one-quarter (24%) of pet owners had made purchases using a “buy now, pay later” plan (such as Afterpay, Affirm, Klarna, PayPal Pay in 4) in the last 12 months. Now that inflation and interest rates have begun to moderate, pet retail leaders may want to review and update their payment services offerings. By meeting customers halfway with flexible payment services, pet retailers, marketers, and service providers can make it easier for pet owners to buy what they need, when they need it.
Given the consumer priority on spending management, pet insurance is outperforming all other non-medical pet services categories and will claim a projected 33% share of sales in 2024, up from 15% in 2019. Along with vastly increased marketing over the past decade, the high cost of veterinary services – recently exacerbated by record inflation – has been a key factor to the pet insurance boom.
Despite this rapid rate of category growth, ample room remains to expand the use of pet insurance. The penetration rate for pet insurance in the US remains extremely low, at under 5% of dogs and cats, compared with a 24% pet insurance rate in the UK. As the pet insurance industry consolidates and US pet retailers and service providers seek to position themselves as one-stop resources, pet insurance will become an increasingly integral part of the pet industry ecosystem.
See the new study Pet Services in the US, 3rd Edition and the full Pet Products & Services Catalog for more information.
About the blogger: Shannon Landry is the Packaged Facts Pet Brand Manager.
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