What’s in Store: Dave’s Take on the Retail Pet Pound

CM Plus chatted recently with Dave Ratner, the “chief instigating officer” of Dave’s Soda and Pet City, an Agawam, MA-based chain of pet supply stores (that, yes, also sells soda).

Not surprisingly, the big box pet stores like Petco and PetSmart are Dave’s main competition. The company recently launched Simply the Best, Dave’s in-house brand of dog food, in about 1,000 independent pet stores around the country. We asked Ratner for his thoughts on the pet supply market.

CM PLUS: What trends are you seeing in the pet marketplace?

RATNER: More and more people are buying better quality pet foods. And, people who used to have several fish tanks at home are buying very expensive, larger tanks, 55 gallon or bigger. The aquarium industry has matured so now there’s furniture-grade cabinets — the stuff is more “wife friendly.” The fish business is not what it used to be. Now, little kids are on computers and Sony Playstations. It’s very rare that you see kids with four or five different fish tanks who are experts by the time they’re 13. They’re not into it anymore. When I first started in the business I could have had 15 kids — all under the age of nine — running my fish department. It’s not the case anymore.

CM PLUS: What about other pet niches?

RATNER: We sell a lot of birds. There aren’t many places that sell birds any more, because it’s so labor intensive, but people are still buying birds. But, sales of big cages have taken a beating because you can buy them on eBay. There’s companies that just bring in trailer loads of them from China and put them on eBay, they don’t even have stores.

CM PLUS: Are you doing a lot of marketing online?

RATNER: We e-mail our customers every month with specials, and we’re redoing our Web site (http://www.davessodaandpetcity.com), to have more pictures of what is happening in the store on the site. We also use SmartReply to call our 40,000 “Club Dave” members [with recorded messages]. I make the recording, and it’s very specific. If we have 9Lives on sale, we only call people who buy 9Lives. Every month we contact one group of customers.

CM PLUS: What about direct mail?

RATNER: We recently did a direct mail piece with a $5 gift certificate, no purchase necessary, just as a thank you to all our customers who spent over $150 during the course of the year. It’s good the first three weeks of December, and we will probably get a 50 or 60% response. People say “why are you doing this? They’ll come to your store anyway.” I say they’ve already spent $150 with me. If we average 30% profit, I’ve made $50, and these are guys I don’t want to lose to Petco and Petsmart. And people love it.

CM PLUS: Do you see that certain segments are more likely to redeem coupons?

RATNER: The wealthier you are, the more you use coupons. It’s unbelievable. I have a store in Hadley and Northampton, a store in Agawam, which is a working class area, and an inner city store in Springfield, MA. The two stores up north get the higher percentage of coupons back, no matter what the offer is. I think there’s a reason they’re affluent. If you look at the cars at Costco, there’s BMWs and Volvos. People who have money want a deal.

CM PLUS: Do you ever poll customers about their pet supply buying behavior?

RATNER: From time to time, we’ll do a lost customer report. They all shop in various places. When do you buy pet food? You don’t buy it a week in advance. You buy it when you run out. If your pet is on Brand X food, you want to keep them on Brand X food. But you will buy whatever to tide them over. Price is not an issue. If you love me to death and you’re as loyal as can be, if your kid has to get to a soccer game and Petco is on the same side of the street, guess what?

CM PLUS: What gifts are your dogs getting for the holidays?

RATNER: My German Shepherds, Sophie and Stuart, won’t get anything because they get all the samples. [laughs] If you opened up my cabinet, I’ve got every kind of chew treat in the world in my house. You know, it’s unbelievable what people will spend on their dogs and cats. The sweaters, the shearling coats, the carriages.

CM PLUS: Do Sophie and Stuart wear any outfits?

RATNER: No, but they sleep in bed with us. [laughs] One has really sensitive paws and we tried to put boots on him, but he kept chewing them off.