As the economy tightens the market for pet products and services is still growing, with households earning at least $70,000 tripling their pet related expenditures to over $18.6 billion dollars – accounting for more than half of all U.S. spending for pet supplies, pet services and vet services, according to the latest Packaged Facts report.

This key demographic now accounts for more than 60% of all pet services purchased.

The report points out that while some of the growth in this demographic’s market share can be attributed to a general increase in upper income families, it also shows the success that the sharp marketers within the pet industry have had capitalizing on the recent trend of the humanization of pets (also described as “functional pampering”).

“Products for pets are being made to resemble those for humans,” said Tatjana Meerman, publisher of Packaged Facts. “Especially among aging Baby Boomers, empty nesters, DINKs [dual-income, no kids couples] and singles, humanization is fueling consumer demand for premium products and services, including those bearing familiar brand names crossing over from the human side.”

This “pets as people” trend, both as seen in the product/service offerings and the accompanying marketing pitches, attempts to lead pet owners to think in human terms as they shop for products for their pets. This can be seen in the recent huge growth in licensed products (one of the biggest hits of the past 10 years in the collar segment was Coastal Products licensing agreement with Harley Davidson — making millions for both companies) and marketing terms like “organic” and “all-natural.”

Supporting this market shift toward “functional pampering” is another demographic factor, the aging of American pets. Very similar to the highly targeted aging “babyboom” trend, I believe the “aging pet population” will emerge as the single most important pet market sales driver in 2008 and beyond.

I believe this trend will continue because as pets live longer, owners (especially in the upper income households) spend more to care for them and have more time with them to develop that all important bond.

Add to this the fact that as these pets are aging, so are their owners (which further strengthens this bond and often leads to the owners ‘treating’ their pets the way they hope they are cared for in their final years).
Studies have also shown that older (higher income) pet owners are more likely then younger pet owners to be “highly dependent on this mutual, and increasingly PRIMARY, source of companionship.”

This demographic knowledge is VERY IMPORTANT for online pet product, service and information petrepreneurs. Forrester Research and Shop.org reporting that online shopping appeals more to premium pet households, being 48% more likely than average to buy pet products online.

The Forrester/Shop report characterizes one out of every three dog- or cat-owning households as a premium household (defined as single-person households with annual income of $50k or better and two-person households with annual incomes of $75k or better.

Where children were once considered the primary pet market driver, these new demographics studies (and census bureau data that shows 4 out of 5 U.S. households had no children in 2000) demonstrate that households without children now purchase over 70% of all pet products and services (up from 45% just 6 years ago).

It makes sense (having three kids at home) that people without children can buy more – and more expensive – pet products and services because they have more discretionary income and time.

Take these factors into account as you create your products/service or profit pulling niche reports.

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Filed under: Doug's • Pet Business News

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