by Daniel Granderson
May 9, 2018
Several years back, Amazon declared pet products a top category of interest, and that interest is far from waning. It has became obvious that due to its size, scope, resources, online expertise, brick-and-mortar expansion, and desire to dominate all consumer packaged goods categories, Amazon poses a singular threat to pet market players of all stripes—brick-and-mortar, multi-channel, and online-only. The Amazon threat also crosses retail sectors, with big-box pet specialty retailers in particular currently taking much of the hit.
“Pet products are among the fastest-growing online retail categories and Amazon is leading the way,” says David Sprinkle, research director for Packaged Facts. “The scariest part for competitors is that recent news indicates the e-commerce juggernaut is still coming on strong and unabated in the U.S. pet industry, reaffirming its commitment to pet products and now pet food.”
Packaged Facts in the report Amazon Strategies and the Amazon Shopper estimates Amazon’s pet product sales reached $2 billion, up 40 percent from the previous year. That number will almost inevitably continue to grow with the launch of Wag, Amazon’s private label brand of dry dog food that is delivered via Prime. Wag is reportedly the first step in a major expansion of Amazon’s pet products business. Wag joins Amazon’s list of private label brands in more than 70 markets available for purchase only by Amazon Prime members. Though priced to compete in the premium-tier of the dog food segment, its cost slightly undercuts the cost of similar competing meat-first, grain-free premium brands such as Blue Wilderness.
Competitors received a foretaste of Amazon’s growth strategy in the pet market not long after the company’s acquisition of Whole Foods. Following the acquisition, Amazon quickly began offering Whole Food’s Whole Paws pet food online. In short order Packaged Facts predicted in its report U.S. Pet Market Outlook, 2018-2019 that Amazon would inevitably extend its cross-category AmazonBasics brand—which already included a wide selection of nonfood pet products—into pet food and launch a new premium or superpremium pet food brand.
At present, Amazon by far leads the pack among online pet product retailers, despite an admirable jump by PetSmart following its 2017 acquisition of Chewy.com. In Packaged Facts’ Q1 2018 National Pet Owner Survey featured in U.S. Pet Market Outlook, 2018-2019, Amazon topped the list of leading websites for pet product purchases, attracting 55% of those who purchased pet products online, followed by Chewy at 26%, PetSmart at 19%, Petco at 17%, and Walmart/Sam’s at 14%.
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