Refreshing customer profiles: lessons learned from US pet ownership

In our experience of working with retailers, creating a robust profile of a brand’s customers is an essential step in understanding market potential, accurate sales forecasting, and a wide range of other essential location intelligence capabilities.  

Once you know who your customer is — particularly your most profitable customer — you’re in a much stronger position to attract and retain them, lowering the cost of acquisition and decreasing the ramp-up period of new deployments. Ultimately, you’re better placed to outperform your competition and maximize location performance. 

Keeping up with your customer 

We work with brands with all levels of sophistication regarding their understanding of their customer. Some are largely reliant on their in-house data to form a picture of who their best customer is. Others may have enriched their customer data with third-party demographics. Some are drawing on customer data, demographics, mobility data, plus a significant amount of other data sets to give them a detailed view.  

The more you know about your customer, the more effective your real estate, marketing, promotion, and pricing strategy is likely to be – assuming you’re applying robust analytical approaches to support decision-making. But it’s also critical that your customer profile is refreshed regularly to account for both macro and micro, economic or technological, factors that may impact your customers and your brand.   

Regardless of who your customer was two and a half years ago, given the scale of disruption brought about by Covid, it’s almost certain your customer profile has evolved.  

Covid impacts and pet ownership 

Let’s take a look at one space where the customer profile has noticeably shifted in recent years — pet ownership. Affluent families used to make up the bulk of pet owners since the pandemic, we’ve seen a greater proportion of millennials taking on pets.  

While the broad shape of buyers age has remained the same, the share of customers with a head of household in the age brackets below 60 has increased significantly. Pet owners, on average, are now younger in 2021 than they were in 2017, and they’re now overrepresented in all ages below 60. 

This movement has significant implications for veterinarians, pet stores, pet grooming concepts, dog day cares, and others who have conventionally understood their customer as largely from affluent, family households. And for each of these concepts, there are considerations across their operation.

Location strategy

From trade area definition to sales forecasting, concepts in the pet space will need to lean on their in-house and third-party data to understand how their customer has changed. Relying on data from even just a year ago may not accurately represent the realities of the brand’s position today. The net result is reduced accuracy when forecasting sales potential which risks focusing capital investment in areas that may not deliver the best return.  

In terms of market expansion and portfolio optimization exercises, data that doesn’t reflect the reality of your current customer can lead to costly missteps, so it’s essential to be working with the most recent data available.   

Promotion: customer acquisition and retention

Understanding a changing customer profile presents challenges from a marketing perspective. Not only are geo-based marketing approaches likely to be less effective if your trade area is not accurately defined, but your marketing channel selection could also be less impactful than expected. A younger, potentially single person household pet owner consumes different media to a family — will pet concepts’ channel selection still be optimized for this demographic? Only by refreshing their customer profile can brands say this for sure. 

Once brands have acquired new customers, do the relationship management tactics of 2-3 years ago meet the needs today’s customer to support retention? Is the e-comm offer robust? How sophisticated is the omnichannel experience? Today’s pet owner is more likely to book appointments, order prescriptions, and access online consultations via mobile app. Perhaps this wasn’t a concern two years back, but Covid impacts coupled with a younger customer means pet brands should consider their omnichannel experience as central to their offer.  

Product offer and pricing strategy

Pet brands also need to be aware of how a changing customer profile should impact their product and service offering. A single-person household is more likely to need, for example, doggy daycare than a family that can organize schedules around their pet. At Kalibrate, we’ve seen a concept specifically targeting their day care offer at millennial pet owners — a market that would’ve been considered very niche just a few years back.  

The flip side of being aware of your product offer is looking at what your competitors are offering -and that shouldn’t be limited to direct competitors. As pet ownership grows, mainstream grocery, big box outlets, and other retail concepts are giving more shelf space and product lines to entice pet owners as well as cater for their own changing customer profile. Mobility data can reveal how your co-tenants and competitors are pulling market share – or, hopefully losing market share — to your locations.