By Richard Schenker
As a former dog owner (our late dog, Koby, pictured), I can attest firsthand that pets are often seen as the epitome of loyalty, offering unconditional love and companionship without asking for anything in return. Whether it’s a dog waiting at the door after a long day or a cat curling up beside you for warmth, their devotion is unwavering. Pets don’t judge, hold grudges, or demand anything in exchange for their affection. They are always there to provide comfort and joy, creating an emotional bond that remains strong through every challenge. It’s no wonder pets are among the most loyal beings.
So, it bewilders me that in such an emotionally driven retail category, pet retailers’ loyalty programs are almost entirely focused on generating transactional loyalty rather than fostering an emotional connection with their customers. Honestly, I can’t think of many retail sectors better positioned to build emotional bonds with customers than the pet industry.
The retail pet industry in North America has experienced significant growth in recent years, primarily driven by the pandemic. As millions of people were forced to stay home, pets became central to the emotional well-being of many households. Pet ownership transitioned from a casual hobby to an emotional lifeline. With this unprecedented growth in pet ownership, however, comes the realization that pet retailers have an untapped opportunity to leverage loyalty programs in ways that deepen customer connections and increase long-term value. Yet, despite the explosive growth of the pet sector, loyalty programs in this space still aren’t reaching their full potential.
Retail Pet Sector Overview
The pet sector is dominated by a mix of large retailers, including mass discount chains, big-box club retailers, traditional and discount grocery stores, big-box pet stores, chain pet retailers, small niche stores, and, of course, online giants. The emergence of online retailers like Amazon and Chewy presents a significant challenge to the traditional retail pet sector.
Amazon has become a one-stop shop for pet owners, offering a wide variety of products, often with subscription services for recurring purchases like pet food. Chewy, specializing in pet supplies, has carved out its niche by focusing on pet-centric customer experiences, such as auto-ship delivery programs and personalized care. These online retailers often offer lower prices, convenience, and a wider range of products than traditional brick-and-mortar stores. Pet ownership can be expensive, and during these uncertain economic times, many pet owners place a high value on price and convenience.
Specialty pet retailers are struggling to keep pace with online competitors by adopting omnichannel strategies, such as online ordering with in-store pickup or expanding delivery services. However, they have been slow to innovate their loyalty programs to counteract the online threat. Many loyalty programs at traditional pet retailers lack the same degree of personalization or convenience as their digital counterparts, which may explain why customers are increasingly shifting toward online purchases.
A Lack of Differentiation in Loyalty Programs
Despite the competition, loyalty programs in the traditional pet retail sector have remained largely stagnant. Many are transactional at their core, focusing on earning points or discounts with little attention paid to the broader customer experience or the emotional connections between customers and their pets. While price and convenience are key drivers of loyalty, there are several other factors that pet retailers need to focus on. This is in stark contrast to sectors like fashion, airlines/hospitality, and tech, where loyalty programs are more dynamic, offering exclusive benefits, perks, features, and mechanics that foster emotional loyalty to the brand.
The lack of innovation in pet loyalty programs is striking. The retail pet sector is missing an opportunity to build not just transactional loyalty but emotional loyalty as well. Pet owners are deeply attached to their pets, and the bond they share can be a profoundly emotional experience. Yet, pet retailers have largely missed the mark in connecting with customers on an emotional level.
While transactional loyalty—such as offering discounts or reward points for purchases—is essential, emotional loyalty can elevate a brand to the next level. Retailers have the opportunity to tap into the emotional aspect of pet ownership by offering personalized services, education, and experiences that go beyond mere product transactions. Pet retailers could build communities for customers, provide resources like training or health tips, and host special events that align with pet ownership values. Unfortunately, many loyalty programs stop at the discount-driven transactional model, leaving emotional connections untapped.
Innovative Loyalty Program Considerations for Pet Retailers
Retailers in the pet sector can innovate in several ways to not only make their loyalty programs stand out but also encourage long-term customer engagement. However, it is essential for pet retailers to discern which of these features will drive the greatest customer appeal and loyalty outcomes. Most retailers have tight budgets and over capacity digital departments with competing priority projects. Therefore, conducting some level of voice-of-customer research is always useful to gauge appeal, likelihood to increase shopping frequency, and the probability of customers referring the brand to others. This allows for a logical rationalization of new ideas.
The following is a list of possibilities that rely less on traditional loyalty mechanics and focus more on emotional loyalty features, which can help differentiate retailers from their competitors. While implementing all of these strategies is not recommended, selecting those that will be most strategically and financially accretive to the business is key. Here are some thought starters:
1. Tailored Pet-Centric Loyalty Tiers
Instead of traditional points-for-purchase programs, retailers can design loyalty tiers focused on the unique needs of different pet owners (e.g., puppies vs. seniors). This segmentation ensures that customers feel the loyalty program is personalized to their pets’ life stages, increasing relevance and engagement.
2. Integrate Technology for Seamless Experiences
Pet retailers should consider investing in apps or online platforms that make loyalty programs easier and more interactive for customers. Features could include tracking a pet’s purchases, needs, and milestones (e.g., food consumed, vet visits, training goals). Incentives could be offered for completing tasks, such as checking off health goals, sharing pet stories, or attending online training sessions. Members could redeem points for both physical products and digital content, such as pet training videos or downloadable care guides.
3. Social Impact and Charity Rewards
Pet owners increasingly want to feel their purchases are making a positive impact. Retailers can create loyalty programs that allow customers to donate loyalty points to animal shelters or rescue organizations. They could also participate in charity events or fundraisers, earning points for donations or volunteer hours. A focus on social responsibility not only drives loyalty but also taps into the emotional side of pet ownership, making customers feel they are contributing to a greater cause.
4. VIP Access to Pet Services
Offering services beyond just products can increase customer loyalty. Pet retailers could partner with pet groomers, training centers, or dog walkers to offer exclusive discounts or services to loyalty program members. Programs could offer “VIP Member” access for customers who reach higher loyalty tiers, including personalized shopping and services or priority access to new pet products.
5. Incorporate Pet Milestones into Loyalty Programs
Just like human loyalty programs celebrate anniversaries or birthdays, pet retailers could introduce milestone-based rewards. Rewards could be given when a pet reaches a certain age (e.g., a free grooming session or discounted health products when a pet turns 1, 5, or 10). Special gifts or discounts could be offered on “Gotcha Days” (adoption anniversaries), birthdays, or holidays to foster a deeper emotional connection with customers.
6. Virtual Pet Communities
Taking inspiration from Sephora’s highly successful Beauty Insider program, which has a sought-after community portal, pet retailers can create a similar sense of community among loyalty program members. Pet owners can connect through virtual groups, online forums, or local events organized by the retailer. These virtual pet communities can share care tips, organize meetups, or host fun pet-related challenges (e.g., a cutest pet photo competition). Members could earn rewards for participation, sharing, and engaging with the retailer’s social media or community platform. A sense of belonging can increase brand loyalty, as customers feel part of something bigger.
7. Exclusive Product Collaborations and Bundles
Retailers can collaborate with suppliers to create exclusive products or bundles that are only available to loyalty program members. For example, specially formulated pet food or limited-edition toys. Bundles of complementary products (e.g., food and grooming kits) could be sold at a discount for loyalty members. By offering exclusive product lines or bundles, retailers can provide customers with something new, increasing purchase likelihood and brand referral.
8. Sustainability and Ethical Product Rewards
As consumer interest in sustainability grows, suppliers can help pet retailers differentiate their loyalty programs by offering eco-friendly or ethically sourced products as reward options. Products like biodegradable toys or sustainably sourced pet food could be offered as rewards for loyalty members, with additional points given for purchasing from sustainable or charitable brands.
9. Shared Data Insights and Personalized Experiences
Suppliers with deep insights into their products and customers can collaborate with retailers to offer more personalized, data-driven loyalty programs. By sharing anonymized consumer behavior and product usage data, retailers and suppliers can offer tailored promotions based on pets’ specific needs (e.g., nutritional requirements, health issues). This collaboration can also help understand what products perform best in different regions or for different types of pets, leading to more relevant rewards.
10. Pet Health and Wellness Education
Suppliers specializing in pet care products—such as health supplements, food, or training tools—can provide exclusive educational content as part of loyalty programs. Suppliers could offer webinars, expert pet care advice, or training courses available only to loyalty members. This positions suppliers as valuable resources for pet owners, enhancing the retailer’s loyalty program by educating and empowering customers.
Pet Retailers Must Invest More in Loyalty Programs
It is more important than ever for pet retailers to make loyalty a core part of their business strategy. The industry is highly competitive, and with the growing dominance of online players, brick-and-mortar stores need every advantage they can get. Loyalty programs not only drive repeat business but also provide valuable customer insights that can inform product offerings, marketing, and store operations.
Loyalty is a powerful tool for retaining customers, increasing lifetime value, and fostering brand advocacy. As the pet industry continues to grow, investing in loyalty programs that enhance both transactional and emotional connections will be a crucial differentiator. Pet retailers must understand that loyalty is not just about discounts; it’s about building lasting relationships with customers who view their brand as a trusted partner in caring for their pets.
The time has come for the pet retail sector to evolve its approach to loyalty, focusing more on emotional connections and innovative offerings that go beyond the basics. By adding more bite to their loyalty programs, they can create deeper emotional bonds with customers that last a lifetime
Richard Schenker is a highly accomplished customer engagement thought leader, loyalty practitioner and partnership curator who has designed, renovated, and managed some of the world’s leading customer loyalty programs. He has an impeccable track record of success at enriching transactional and emotional relationships between iconic brands and their customers, across multiple business sectors. Richard has spent the first half of his career in senior loyalty roles with the Hudson’s Bay Company and Shoppers Drug Mart and the remainder of his career in leadership roles with leading loyalty agencies, Air Miles and Bond Brand Loyalty. Currently he is the Founder & Chief Customer Engagement Officer of Loyal Strategy Consulting, a consulting firm focused on enriching customer loyalty for leading brands. Richard can be reached at: rschenker@loyalstrategyconsulting.com or visit: https://loyalstrategyconsulting.com
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