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NONFOODS: Pet project

Giant Eagle wants to make the world a pet-friendlier place. In June more than 500 people gathered in the parking lot of a Camp Horne store in Pittsburgh for the supermarket chain's Pet Health Event. Sponsored by Giant Eagle, local pet group Animal Friends, and pet product manufacturer Castor & Pollux, the event was designed to educate customers about how to provide a healthy lifestyle for their pets.

Samples of Castor & Pollux's new organic pet food were distributed, and Animal Friends conducted sessions on the adoption process and proper care of animals. Attendees had an opportunity to win a variety of pet-related gifts, including a day for their pet at the Cosy Inn Pet Resort & Spa.

Some attendees even walked away from the event with something they never would have expected from a trip to the supermarket -- a new dog or cat, adopted right in the Giant Eagle parking lot.

Such events are truly a labor of love for Giant Eagle's pet products category manager, Eric Carlson. An owner of three German Shepherds, Carlson definitely knows that providing education to pet owners is a good way to breed loyal customers. While the Pet Health Event lifted sales at the store (Carlson would not disclose figures), it also lifted the hearts of the pet owners as they discovered new ways to take care of what many of them consider their babies.

Carlson says interaction with pet owners is crucial to the retailer's strategy on how best to handle the category. "We hope to learn from those customers," he notes. "There are a lot of educated customers out there, and they can teach us some things. We really want our customers to understand that we have a passion for pets. We not only provide for their pet needs when they visit our store, but we are also active in the community, we support the pet shelters, and we encourage our customers to adopt pets when we have events in our parking lots or in front of our stores. Not only is it the right thing to do -- as we believe -- but it can also really help solidify our relationship as Giant Eagle being a caring partner in the community for animals. That's what we are about."

Giant Eagle has hit upon an effective formula for pro-pet happenings. "We like to position our events as kind of a three-tiered situation," explains Carlson. "We bring in a product or a vendor, and we try to promote the new product or give a sampling or demo opportunity for our customers. We also try to bring in a local vet or pet expert, so they can talk about pet wellness and how to provide a safe and healthy atmosphere for a pet.

"The third thing we try to provide is a partnership with a local pet group, be it a humane society or adoption agency -- something of that nature -- so we can position those events as an all-encompassing wellness and communication event regarding your pet."

Giant Eagle also ran a similar function at its Macedonia Crossings unit in Northfield Center, Ohio. Each event averaged more than 500 attendees.

A big commitment

Of course, one of Giant Eagle's goals for these events is to drive shoppers into the pet aisle, and it's in that aisle that they see firsthand just how committed the company is to providing something for all pet owners, regardless of what kind of animal they own, except horses -- but that may change in the not-so-distant future, according to Carlson.

Giant Eagle has taken the "humanization" of pets to a new level, redesigning its entire pet category around this concept. "We see more and more of a trend of customers demanding product alternatives in the pet aisle, such as more healthy, organic things -- whether it's foods, treats -- that offer better nutrition to their pets," says Brian Frey, marketing assistant, corporate communications. "Customers are reading labels more than ever, it seems, and they are seeking the advice of veterinarians and the like, so we need to make sure we are providing them with the proper products that meet their needs."

And just as humans are trying take better care of themselves, they're also attempting to keep their pets in peak condition. "We continue to see an increasing trend in the demand for healthier product alternatives in the pet aisle," continues Frey. "Similar to the current industry trend toward customers trying to live healthier lifestyles, customers are also spending more time and energy exploring new products that promote the balanced health and well-being of their beloved pets. Our goal is to carry a wide variety of high-quality pet formulas and pet-related products that appeal to a larger audience of animal lovers and help position Giant Eagle as a true pet destination spot."

Among these products are organic food; sun-dried rawhide chews; natural treats; vitamins and supplements, including aspirin and joint remedies; and exercise toys such as balls, ropes, chew toys, water toys, and trainers.

Carlson says Giant Eagle is even exploring prescription pet medicine. "We have pharmacies, but there are some issues -- at least in Pennsylvania -- with human medicine and pet medicine being in the same area," he observes. "But we are trying to learn what we need to do to get into that business."

Where space allows, Giant Eagle dedicates 160 feet to pets, on both sides of the aisle. In other cases it uses a variety of space management techniques to ensure the appropriate product mix that accommodates most customers' needs. "More than 70 percent of our customers own pets, which is greater than the industry average of 62 percent," says Carlson. "Plus our pet customer base is very diverse. So we need to provide an extensive variety to accommodate all these types of pets."

That mandate for extensive variety must be balanced against the department's meat and potatoes, however: The primary driver of dollar volume in the pet aisle is still dry dog food. Notes Carlson, "A lot of those bags are 40- or 50-pounders, so that adds up real quick."

Space for dog treats, however, has been expanded to accommodate the increased number of players in the category and the unique offerings from both large and small manufacturers. "There are all kinds of things out there now that weren't even out there a year ago," says Carlson. "Same with the cat treats -- they continue to grow and evolve. We have offerings for reptiles, mice, rats, gerbils, birds, and, indoor and outdoor, we have a variety of aquatic items for all your fish needs."

Organic and health and wellness categories are the newest additions to the aisle. In addition to the Castor & Pollux line of organic food and treats, Giant Eagle carries products like organic catnip and sun-dried rawhide chews from other suppliers. Rather than mixing the organic and nonorganic products together, all organic products are merchandised in one section.

"We chose to create this special rack that would have all of the organic items together, to create critical mass for these items we are trying to get people to see that we have," says Carlson. "If we put one organic catnip with all these other items in the cat treat section, it will be lost. But when customers are looking at understanding what these products are, they can see the offering much better by [our] putting it in one section."

The health and wellness section also includes such items as dog toothbrushes and dental bones, flea and tick remedies, vitamins and supplements, pain relievers, and shampoos. "There are a lot of neat niche items out there that we believe are going to become mainstream," observes Carlson.

Scouting trips

To stay ahead of the game, Carlson makes an annual scouting trip to the American Pet Product Manufacturers Association show. "We attend the APPMA show every year, and the first section I head to is the new products section," he says. "We look at the new products and start to pick items. This past year it really was evident that the industry trend seems to be toward more natural, more organics -- there were a lot more dental health items, for example. A couple of years ago it was just rawhide or ropes. Now it's moving in the direction of pet health."

Some of these treasures are test-merchandised on a clip strip. If they perform well, they become a permanent part of the everyday set. Giant Eagle is currently running a test at some stores with a company called Chomp, Inc., which manufactures pet candy in packaging that mimics that of human candy.

Following the humanization theme, Giant Eagle will merchandise these treats at the checkout in a specially made rack that sits on top of the candy racks. "I met last week with our magazine/front end/video category manager to figure out what stores we want to target," recounts Carlson. "We wanted to take a look at stores that are overperforming and those that are underperforming, so we can test them there, as well."

The 20 stores he selects will be carefully chosen based on data from VNU marketing information companies ACNielsen and Spectra. "We utilized both Spectra and Giant Eagle internal data to develop our strategic plan for front end merchandising of pet food and overall pet category management," says Carla Schreckengost, Giant Eagle's in-house ACNielsen account executive. "The Spectra data provided a look at Giant Eagle supermarket sales per location and market-area demographics to develop demand indices. This valuable information allows category managers to identify market areas and specific stores with opportunities for sales growth. The internal Giant Eagle data included proprietary methods used to choose the best site locations."

Although the organic and health and wellness products sell well and deliver comfortable margins, Carlson will not ignore his value customers. "There are customers who just want the basics," he says. "The same way you have to make sure your product mix is right in the aisle for your human customers, you also have to make sure that it's right on the price points within the aisle, and the offerings that you have for your pet owners."

Carlson sees the trend toward the humanization of pets growing stronger. "Pets are part of the family and have been so since the first domesticated dog," he says. "As the baby boomer generation gets older and their children move out, the pet now becomes the child. And it's those people who generally have more disposable income and are spending it on their pets. We're trying to understand this shift and how pets are being treated and pampered, and make sure we have the right offers to accommodate it."

That seems like a natural progression for a retailer with an animal in its name.
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