The recently proposed merger between Australian vet and pet product companies Greencross and Petbarn shows something we may have known for some time: Our pets are more important than ever.
Many people now consider their pets to be family members. In fact, in a recent poll, almost 90% of Australians admitted that they treated their pet better than other family members. This has an impact on buying behaviors.
A recently released report by IBISWorld revealed that despite a decline in Australia’s total pet population, owners tend to spend more money on their pets, investing in high-quality products and services. Greencross and Petbarn combined are estimated to have a market of A$7 billion.
Now, pets can have their health care insurance and enjoy spa treatments. They can also order gourmet meals. Euromonitor International states that categories of products once considered only relevant for human consumers are now expanding to include pet offerings. In the United Kingdom a few decades ago, similar trends toward humanization were observed. The Pets are Human Too Study revealed that 32% of dog and cat owners felt their pets were better listeners than their human partners. Australian businesses have begun to capitalize on the humanization trend.
Businesses are taking advantage of the fact that consumers who care about their pets show their support with their wallets.
The merger between Greencross and Petbarn is expected to create one of Australia’s biggest pet care companies, with 224 clinics, stores, and outlets across Australia and New Zealand. The deal will be subject to a shareholders vote expected late in January.
The merged company is expected to have a revenue of A$443million in its first year and profits of A$21million. One way that companies can differentiate themselves from their competitors and increase engagement with customers is to use a model that combines both retail and service. This is not the first merger of this kind. Similar coalitions have been seen in the United Kingdom and the United States.
Does pet humanization continue to be popular?
The desire to control the environment is what drives pet humanization. Mr Greenjeans/Flickr
According to research, pet humanization is a result of a variety of factors. These include increased loneliness and the need to control one’s environment in times of uncertainty. The recent rise in one-person households and the lack of time to socialize have led us to seek out social support for our pets. It is also in line with what most people say about why they have a pet. The main reason given by 70% of pet owners was the need to be with someone.
The trend of pet humanization is not going to stop anytime soon. These attitudes and behaviors are on the rise amongst younger generations. Generation Y is more likely than Baby Boomers to have pet insurance.
Pet ownership will have a wide-ranging and long-term impact on Australian businesses and those around the globe. According to MarketLine, the global pet care market is forecast to reach US$100.674.2 million in value by 2017. This represents a 3.5% compound annual growth from 2012 to 2017.
As the market for products that were once only for humans is extended to pets, there will be increased competition for market shares. To compete for “pet dollars,” many innovative services and products will continue to be developed. Consolidation is also continuing as smaller firms merge into larger corporations to stay competitive.
It’s not just good for Fido that seeing pets as members of the family is good for business.
