How Not To Go Bust As Walmart Goes All In On Pet
Wasting no time capitalizing on the explosive growth in pet food and pet care products, Walmart has announced an expansion of its private label Pro+ line of premium pet food.
The strategy is simple: outprice the competition according to the Winsight Grocery Business article “Walmart Looks to Outprice on Premium Pet Foods.”
While the “low-price” approach to capturing market share is not a surprise coming from Walmart, questions about how other pet food companies will compete is yet to be seen.
The fact that, “Walmart’s move to outprice other premium pet-food brands comes as consumers increasingly are seeking out premium, personalized, functional fare for their pets,” according to the Winsight article, adds another layer of complexity to an already crowded space.
Building the best strategic hand
To best navigate the high stakes opportunity pet brands and retailers have with the growing demand in this category, there are several foundational best practices that they must master to keep their seat at the table.
1. Prioritize accuracy and timeliness of key data metrics including price, promo and availability.
As quickly as the pet product landscape is changing, brands cannot be caught off guard by incorrect or incomplete visibility into buyer, competitor and retailer activity.
There is no question that we will see new pricing and promotional strategies coming from manufacturers to entice buyers.
However, in doing so, brands must also closely monitor out-of-stocks as any disruption may open a gap for competitive substitution.
2. Avoid the “follow the leader” race to the bottom when it comes to price.
You want to own your pricing strategy, but if the pet e-commerce boom has shown us anything it is that keeping up with pricing compliance can be infuriating.
With Walmart’s pledge to “outprice” other brands, you can be assured that competitive retailers will be looking for similar price advantages to maintain sales.
This means that brands can unknowingly get caught in a “follow the leader” pricing war. Instead of the typical finger pointing that occurs to fix pricing compliance issues, brands will need to quickly identify the first mover and work collaboratively to strategically develop mutually beneficial approaches to meet shopper needs.
3. Read the room to know your next bet.
Walmart’s move in the pet category will have a ripple effect as brands and retailers seek to understand the impact.
During this time it is important that you are able to see the changes taking place. This means competitive visibility to pricing, promotion, assortment and digital shelf decisions.
For example, if a new pack size is released or shopper marketing investment is made by your competitor, you need to know both its impact and your next move to maintain your growth strategy.
Additionally, you want to have a close eye on promotional execution to make sure that every “bet” you make has the best chance of paying off.
Going back to point #1, none of this is possible with poor data quality that starts with accuracy of product matching of your products and competitive set. Don’t overlook the fact that this data set will need to expand with Walmart’s actions.
Having the best poker face
Whether Walmart’s going “all in” on premium pet food will disrupt the way that the pet category pot is divided is yet to be determined. The fact is that brands cannot blindly react by making uninformed bets in response to Walmart’s strong move.
Instead, brands need to rely on their data to make the best investment decisions that will keep them in the game for the longest time.
However, if you have doubts about your data or it takes too long for you to decipher the insights you need to act, your competition will quickly call your bluff.
Walmart is a strong and experienced player entering the pet space with a bold bet. It is those companies that can solidify their foundation with data-driven best-practices that will show they are up for the challenge.