Will Americans go to Lowe’s to buy dog food?

Discussion
Rendering: Petco
Jan 27, 2022

Lowe’s customers in several states will not only be able to buy products for their household projects in the chain’s stores but can now also shop for dog food and other pet products.

The home improvement chain and Petco Health and Wellness Company are opening store-within-a-store pet products shops as part of a 15-store pilot in the Carolinas and Texas. The first store to feature a Petco shop will open in Alamo Ranch, TX, near San Antonio next month. The shops will cover around 1,100-square-feet and be positioned in the seasonal area at the front of Lowe’s stores. Some of the shops will also offer veterinary services, and the partnership is being extended to Lowe’s site with a designated Petco store, as well.

A CNBC report points out that both chains have been among the retail winners during the pandemic and that the new Petco shops are in line with Lowe’s willingness to expand into new categories as a means of driving its business.

Petco has also demonstrated a willingness to take new paths to attract pet parents as it faces competition from a wide variety of challengers, including Amazon.com, Chewy, PetSmart, Walmart and a range of pet specialty retailers. The company in October launched a new concept, Reddy SoHo, that seeks to grow on the popularity of the private label launched in 2018.

Nick Konat, Petco chief merchandising officer, sees his company’s Millennial customers and those shopping at Lowe’s having a lot in common.

“They’re a high-spend customer and they really take care of their pet like their family,” he told CNBC. “And they’ve also been doing the same with their homes, with a lot of them being new homeowners or new renters.”

Lowe’s decision to enter into this first-of-a-kind partnership with Petco seems to be founded on a recent survey it commissioned. The Herald Sun reports that 58 percent of those surveyed said they would be more likely to shop in a home improvement store if it also offered pet products for sale. Ninety percent of pet owners surveyed said they want their pets to be comfortable in their homes.

DISCUSSION QUESTIONS: Do you expect the Lowe’s/Petco pilot to prove successful and to be scaled to more locations? How do you think this pilot will affect the thinking of Lowe’s and Petco’s primary competitors?

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"Lowe’s is working to position themselves closer to the center of consumers’ daily needs instead of relying on the periodic needs of home improvements."

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27 Comments on "Will Americans go to Lowe’s to buy dog food?"


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Mark Ryski
BrainTrust

Everyone is getting into the store-in-store game, why not Lowe’s? Tractor Supply is a good example of selling both building supplies and pet/livestock goods and it’s proven to be a very successful formula. I suspect that there’s a strong overlap of pet owners and home owners that lean to DIY, so this looks like it could produce meaningful results for both brands.

The trick to store-in-store plays is that the brands need to be complementary and I believe that would be the case with Lowe’s and Petco. While I doubt that with will be a big deal from an overall revenue impact perspective for Lowes, it’s not nothing — smaller, incremental gains still add up and in Lowe’s battle with Home Depot, every inch counts.

John Orr
BrainTrust

Absolutely, this will have degrees of success. It is all about convenience and where Lowe’s is most convenient, this is a natural. PETCO tried to brand a smaller footprint format years ago, but it required securing more locations. This Lowes approach leverages existing locations. Tractor Supply, although positioned for rural and farming, has proven the product mix works. Location location location.

Bob Amster
BrainTrust

I believe that there is a more definitive relationship between rural, farming and pet ownership.

Cathy Hotka
BrainTrust

And convenience, convenience, convenience!

Dave Wendland
BrainTrust

As a huge fan of “uncommon partnerships,” I love this collaboration. Lowe’s shoppers will find value in eliminating a separate trip and Petco will broaden its reach and visibility. The common thread across these organizations will make it a formidable competitor in this shared space! I expect to see BIG results and I imagine that this pilot will scale quite quickly.

Melissa Minkow
BrainTrust

This makes a lot of sense. The demographic now heavily shopping at Lowe’s is also the demographic investing in being good pet parents. This partnership would be executed perfectly with exclusive Petco merchandise that can’t be found in Petco’s own stores.

Liza Amlani
BrainTrust

Lowe’s is on the right track and with the right partner. Engaging loyal customers with a new (and pandemic proven) category + reaching a new demographic through an already loyal brand … it’s a win win.

David Spear
BrainTrust

I do think this will be successful. Many homeowners find themselves at a Lowe’s nearly every weekend to pick up essentials for home improvement. Why not pick up pet food and other essentials for pets while on the same trip? Does this mean Home Depot will follow suit? Maybe, but this is evidence that retailers are open to a wide variety of collaboration in order to drive new experiences, value and revenue. I suspect we’ll see more of the same in 2022.

Lee Peterson
BrainTrust

They did their research! If you’re a DIYer, you DEF have a dog! Kinda cracks me up, but this is as good a test as we’ve seen from Lowe’s yet and I personally think it’ll work. Now, like “fashion” goods with Amazon, a lot is going to ride on quality here, but if they nail that, I think they’re really on to something.

Bob Amster
BrainTrust

I question the correlation between DIY home repair and maintenance and pet ownership. However, so many people shop Lowe’s that, even if a medium percentage of those Lowe’s customers also were pet owners, the partnership could prove successful in expanding the Petco brand awareness, and consequently, its sales. Lowe’s partnership immediately increases the number of doors available to Petco without having to find, lease, and improve real estate — it’s ready made!

Jeff Sward
BrainTrust

This is a great example of what retailers can accomplish when they focus on convenience and time-saving options they can offer their customer. I might have chuckled at this idea a couple of years ago, but then I remind myself how brilliant I thought it was when I saw my bank open an “office” in my grocery store. And then a dry cleaner opened in the same grocery store. Sometimes ideas and efficiencies like this work on all three levels. Win…win…win for both retailers and the customer.

Shawn Harris
BrainTrust
Shawn Harris
Board Advisor, Light Line Delivery
4 months 1 day ago

Yes, I believe this will work, and I would then expect competitors to follow suit. Also, see Menards. This type of adjacent expansion of SKUs, however executed, is relatively unbounded.

Dick Seesel
BrainTrust

You beat me to it, Shawn. Yes, Menards has been in the pet food/supply business for a long time, along with other “consumables.” It might be considered a distraction from their core home improvement, but there is a vast amount of space available in these kinds of stores to build “adjacent” businesses.

Scott Norris
Guest

Yep, some Menards locations even field a shocking amount of grocery items (dry, frozen, and dairy). And they’ve sold pet items for as long as I can remember.

DeAnn Campbell
BrainTrust

Lowe’s is working to position themselves closer to the center of consumers’ daily needs instead of relying on the periodic needs of home improvements. Petco has already developed a popular ReddyPet shop in shop format, so bringing these learnings into Lowe’s shows every indicator that it will succeed. More and more, national retailers are gathering partners from every sector of retail to build an ecosystem of products and services around the customer to increase frequency of intersecting with those customers.

Brandon Rael
BrainTrust

The store within a store concept has been a winning collaboration for decades. This collaboration offers Lowe’s an opportunity to draw more traffic to their stores and serve customers with pets. While customers may not specifically go to Lowe’s for Petco’s products, the fact that they are there and it’s a complimentary product, they will consider the impulse buy.

These sorts of collaborations have worked very well for multiple retailers. It’s a win-win for Lowe’s and Petco. Petco has an opportunity to extend its reach and scale without the significant capital investment of opening up a new store location. For Lowe’s, its yet another merchandising category to serve the customer and draw more traffic

Georganne Bender
BrainTrust

Some of Lowe’s competitors, like Menards, already have large pet care sections. This is a growth area so why not Lowe’s?

Pet care is much more than just selling bagged and canned food. There are specially areas, treatments, and more that are necessary in a pet department. And you need to be able to recommend the correct products. Because of this, I am glad that Lowe’s is partnering with Petco and not going it alone. Petco associates are specifically trained to understand pet needs.

David Naumann
BrainTrust

The Lowe’s/Petco pilot sounds like a win-win-win for Lowe’s, Petco and consumers. It will offer consumers greater convenience to combine some potential home supplies with a weekly or monthly dog supplies trip. Lowe’s may attract additional consumer visits that can result in incremental impulse purchases and Petco expands it “store” locations to increase sales.

Raj B. Shroff
BrainTrust

I agree with all fellow panelists that this is a smart idea. If Target can have an Ulta, Starbucks and other convenient elements, why not Lowe’s? What else does Lowe’s have in-store (pun intended)?

Shep Hyken
BrainTrust

This makes sense. And it shouldn’t cost a lot to try this. In other words, it’s an inexpensive experiment to see if this product extension will work. There’s minimal risk, other than the footprint that could be used for other merchandise. I can’t see this being an epic failure, but it could lead to an epic success. To make this work, Lowe’s will have to “train” their customers to shop for these pet food needs at their stores.

Natalie Walkley
BrainTrust
Natalie Walkley
Director, enVista & Enspire Commerce OMS
4 months 1 day ago

I agree, Shep, it seems like a low-risk experiment. But, it’s not too much of a product extension as Lowe’s already has pet supplies listed on their website. (Which honestly I was surprised by.) So with the right awareness, I think they can win with this approach.

John Hyman
Guest
4 months 1 day ago

What took them so long? The allocated shelf space for pet products in most grocery stores has tripled over the past four years, with greater dried and fresh food options, but also an expanded assortment of toys and per-related cleaning products. Specialty pet shops have done well also, as many people are sensitive to the quality of what their pets consume. If the Petco selection aligns with the customers brand/quality/price values, the convenience will prevail. The bigger question, however, is will pet owners decide to go to Lowes for DIY (and not Home Depot, Menards, etc.) because of that additional benefit?

Ananda Chakravarty
BrainTrust

Great move for Lowe’s and Petco. The success has already been proven through the examples of TSC and Menards. There will be key locations — Midwest, Southern US, and more non-metro locations where it will prove more popular at first, but the concept is still a store-in-store which had only taken a hiatus due to the pandemic. This type of collaboration will continue to expand opportunities for retailers. Competitors will follow suit. Stay tuned for a Home Depot partnership in this arena.

Brian Kelly
Guest
4 months 1 day ago

Once upon a time, even Sears had a pet department, same with Meier’s. Tractor Supply has a fully kitted animal washing stations. But as they say, it’s all fun and games until someone ends up with a cone around their neck.

There is a crazy Venn diagram showing an overlap in pet ownership, home ownership and DIY behavior. But that doesn’t mean customers give you permission to have dogs in the aisle while you are finding straight 2X4s or selecting paint or plumbing hardware. Maybe at Ace, but in a big box where Pros are eager to get to the job?

Next idea, please.

David Slavick
BrainTrust

Absolutely brilliant. It optimizes the productivity of the Lowe’s Home Improvement store on a per square foot basis and it provides convenience for the Lowe’s shopper. Visit a Menard’s, Fleet Farm, Tractor Supply — their pet and animal merchandising strategy is spot on and many times that is exactly why I visit the store — for pet food, bird food and many other categories that Petco stocks. Extending the productivity and attraction of the primary store (Lowe’s) and expanding the Petco footprint is a solid win as I guarantee you Petco examined where they are under penetrated and Lowe’s being deeper East of the Mississippi is a solid real estate expansion strategy.

Natalie Walkley
BrainTrust
Natalie Walkley
Director, enVista & Enspire Commerce OMS
4 months 1 day ago

I can see this being a smart move to drive incremental sales for both retailers. There seems to be audience overlap and product congruency. Lowe’s already has pet products (crates, doggy doors, etc) and even baby categories (cribs, baby gates) — so with the right placement within the store, this play seems like a convenient option for shoppers already thinking beyond the “home improvement” category.

Anil Patel
BrainTrust

The Lowe’s-Petco partnership is a smart move for sure. Lowe’s generally caters to high-spend customers and Petco shares a similar customer base. However, to make this store-in-store partnership a success, the two retailers together need to ensure consistent customer interactions. Lowe’s customers expect a certain quality of brand experience. Petco should ensure the same quality of in-store engagement and not provide JUST Petco-specific experiences in-stores. For example, if a customer asks a gardening-related question to Petco employees, they should be able to guide that customer. The same applies to a Lowe’s employee as well.

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Braintrust
"Lowe’s is working to position themselves closer to the center of consumers’ daily needs instead of relying on the periodic needs of home improvements."

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