Why holiday spending is going to the dogs

With the holidays ramping up, consumers are seeking out products for everyone on their lists.
And for many, those lists include furry family members as well.

In fact, 80% of consumers said they consider pets to be part of their families when it comes to celebrating and buying gifts for the season, according to a survey Petco conducted of 2,031 shoppers in September 2023. 

“Simply put, pets are important members of our families,” Jenny Wolski, senior vice president of merchandising, supplies and owned brands product development at Petco, said in an email to Retail Dive. 

So what’s driving the focus on pets this holiday season and how are retailers capitalizing on the trend?

Growing humanization of pets

While pets have been a part of families’ lives for centuries, recently those animals are being viewed more as members of their households than ever before. 

“One driver of it is just broader trends, especially with millennials and Gen Z that are either deciding that they don't want to have children or delaying having children.
A pet is a great substitute for that,” Wade Bjubrey, associate partner in the consumer practice of Kearney.
“I have two dogs, I don't have any children, but you can start to build this very similar relationship.”

Pets are an “expression of the human lifestyle,” Wolski said, adding that a key trend stemming out of the humanization of pets is the urge to buy more premium and better-for-you productsfor your pets.
Retailers are responding: Petco, for example, in 2018 announced it would no longer sell pet food and treats that contain artificial colors, flavors or preservatives for cats and dogs.

The humanization trend has only accelerated in recent years. Consumers spent more time at home during the early days of thepandemic, which meant they saw their pets much more frequently.
This was coupled with the fact that animal adoptions surged as consumers sought out companionship and sources of joy.
The number of U.S.
households that owned a pet was projected to increase by 4% in 2020, according to Packaged Facts data.
These factors led pet retailers to see a boost in sales during the onset of the pandemic even as consumers pulled back on spending in other areas.

“When I grew up having dogs, we would get a dog and the next day my parents would go to work and the dog would stay home for eight hours, and that was normal,” Steven Cunix, an associate partner in the consumer practice of Kearney, told Retail Dive.
“Now we don't leave our dog home alone for more than three or four hours because we got so used to it during COVID that they really became part of your family.”

So when consumers start buying gifts for loved ones around the holidays, oftentimes that now includes pets as well.

More than 80% of pet owners said they were “very likely” to purchase a gift for their pet, while 54% said they would spend more time shopping for their pets than for some family members, according to a 2022 PetSmart survey conducted by Wakefield Research.
And even as consumers were more selective about gifting last year, 34% of respondents said they would purchase a gift for their dog during the holidays, while 22% said they would buy gifts for their cat, according to a December 2022 Personal Capital survey conducted with Morning Consult.
That’s compared to just 19% of respondents who said they would buy a gift for their in-laws during the holidays.

As consumers view their pets as extensions of the family, they want to include them in more activities, whether that’s buying gifts around the holidays or finding the perfect Halloween costume.

“We have a three-month-old daughter right now and we have a two and a half year-old dog.
First thing my wife did when Halloween started coming was she's sending me all the different costumes that can match the dog with the baby,” Cunix said.
“The point is that the baby and the dog — she looks at them both as her children.
When holidays or special events come, you don't want to get gifts for your child and not for your pet.”

How retailers are capitalizing on the trend

With holiday spending projected to surpass pre-pandemic levels — Deloitte predicts sales between November and January could reach $1.56 billion, a 4.6% year-over-year increase — stocking holiday-related pet products could be a big opportunity for retailers.

And while e-commerce has grown in popularity in the pet space in recent years, especially for large items like bags of food that consumers can buy on a recurring basis to have delivered to their homes, there is still room for physical retail.
Brick-and-mortar retailers stand to gain through the in-store events they offer, especially during the holiday season, according to Cunix.

To cater to pet owners — and drive visits to stores — Petco introduced its Merry Makings holiday collection, a one-stop shop that features more than 500 products, most of which are under $20, like Christmas and Hanukkah apparel, treats and toys.
The retailer this year is also bringing back its photos with Santa event on Dec.
2.

“Pet parents see holidays such as Halloween, Thanksgiving, Hanukkah and Christmas as perfect opportunities to involve their pets,” Petco’s Wolski said.
“In-store events such as photos with Santa at Petco help families celebrate and make memories with their pets.”