The United States is one of the pet friendliest countries in the world. Massachusetts ranks at number 5th position in terms of strictest animal protection laws. As the company will be establishing its business in Boston first, the statistics regarding the location are outlined as follows:
- Boston is ranked No. 1 among the top 25 startup hubs in the U.S.
- Boston, Massachusetts has a population of around 700,000 people, but the population of the wider Boston metropolitan area is over four and a half million, making it the 10th biggest urban area in the United States.
- There are 442 dog-friendly activities in Massachusetts.
- The MBTA, the transportation system in Boston allows people to take their pets on the train. This will facilitate more people to travel with their pets and thereby increase demand for pet clothing and pet travel clothing.
Millennials have overtaken the aging baby boomers as the biggest pet-owning generation. Some 35% of pet owners in the United States are millennials, as compared with 32% of boomers. Millennials are also on their way up in terms of income and spending. More than half (51%) of millennials buy gifts for their pets once a month or more. Buying clothes for their pets is increasingly popular, with 60% of millennials saying they are likely to buy sweaters, coats, dresses and other fashion for their pets. The population statistics of 2020 depicts that millennials’ share in the overall population of the United States is approximately 25%, higher than any other age bracket. Their population is expected to reach 75 million by the year 2033 as compared to 72 million in 2019. The increasing population of millennials will further result in increased pet ownership and thereby growth in demand for pet-related products.
Over the past five years, per capita disposable income has improved at an annualized rate of 2.2%, contributing to the splurge on industry products by pet owners. Overall, steady income streams also enable pet parents to spend more confidently on their pets. In particular, consumer spending has strengthened at an annualized rate of 2.9% over the five years to 2019, contributing to the spending spree of pet owners during the period. The statistics below depict that the per capita disposable income of people in Massachusetts was $63,829 in 2019 (third highest after District of Columbia), where the average per capita income of the United States was $50,023. High per capita income would mean more funds available with people to be spent on pet products.
The number of pets is the primary driver of demand for the industry. In particular, a rise in pet ownership will lead to higher demand for both discretionary and nondiscretionary products and services, such as food, treats, clothes, and toys. To the industry’s benefit, demand for pets is expected to rise over the five years to 2024, driven by nonfamily households and an aging population. IBISWorld projects the number of pets (cats and dogs) will increase at an annualized rate of 2.1% over the next five years, contributing to the industry’s growing revenue. UBS estimates that about 92 million US households will have at least one pet by the end of 2023, up from 85 million in 2018.
Thus, the growing millennials population, along with increased disposable income and pet ownership will mean more demand for the pet products and thereby improvement in the overall financial performance of the company.
The industry is growing and evolving and with that comes many new opportunities as well as threats. They can have both positive as well as negative effects on the business of Boston Made, Inc.
- The Company makes sure that its suppliers have implemented a proper quality control mechanism during each process from designing to fabric selection to ensure the best quality and comfort.
- The Company will stay at the top of the latest fashion trends to keep the customers engaged and innovate new products.
- The experience of the founder in the digital marketing industry will help him guide the company operations successfully in the future.
- Highly skilled and professional team; well versed with the latest trends in the pet fashion industry will assist the company in creating quality products with affordability.
- The Company will offer high-quality products at affordable pricing.
- A highly visible and user-friendly website will make it easy for the customers to place orders and track the progress.
- Boston Made, Inc. has built a reliable distribution network that can reach the majority of its potential market.
- The Company has a strong base of reliable suppliers of pet supplies thus enabling it to overcome any supply chain bottlenecks.
- Already entrenched competitors.
- Being a new business, it might take some time for the company to break into the market and build a solid customer base.
- Limited market presence as compared to its competitors.
- The struggle to constantly add new designs to the collection.
- High distribution costs may impact the profitability of the company.
- Millennials tend to invest more time and money on pets and seek for more information on veterinary products and pet health online. Thus, a high number of tech-savvy pet parents are expected to drive the U.S. pet supplies market over the forecast period.
- The role of pets in the household has also shifted as a result pets are now widely viewed as an integral member of the family. Consequently, pet owners are willing to spend an increasing amount on those pets.
- One of the positives in the pet industry is that it's been pretty much recession-proof. It's not very cyclical. This will enable the company to strengthen its position even in the current situation of the outbreak of a pandemic.
- Opportunity to collaborate with other online pet clothing platforms to expand the business reach.
- Economic uptick and an increase in customer spending post-pandemic is an opportunity for Boston Made, Inc. to capture new customers and increase its market share.
- The Company will spend a vast sum of money on its online platform. This investment will open a new sales channel for Boston Made, Inc. In the next few years, the company will leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
- After getting a foothold in the market and increasing the customer base, Boston Made, Inc. will have the opportunity to expand by capturing new locations and increasing staff.
- The number of enterprises offering pet apparel and accessories will continue to grow despite existing high competition from major players.
- Since the pet products involve little or no differentiation among brands, price-conscious consumers will likely continue shopping at large retailers due to discounted prices and added convenience.
- Changes in trends and consumer preferences in the pet fashion industry may adversely impact the business.
- Changes in regulations can impact business performance.
- Products are already sold by major competitors in the United States.
Boston Made, Inc. will target people who view their dogs as family and values both fashion and quality. The Company will initially be targeting pet owners in Boston, Massachusetts and after establishing a brand presence, it will be looking to expand its reach in other states having higher dog penetration. With pet ownership rates continuing to rise, the target market for the industry as a whole will expand, allowing new penetration points.
The statistics regarding the target market are outlined as follows:
- Boston, Massachusetts is among the top 10 dog- friendly cities in the United States.
- 23.6% of the households in Massachusetts own dogs. The number of registered dogs has more than doubled in the past few years, from around 2,700 in 2012 to more than 7,000.
- There are 2,734 pet-friendly hotels in Massachusetts, which allows travelers to accompany their pets while traveling. Growth in visits with pets in the city will further boost the demand for the company’s products.
- The US dog ownership statistics report that more than 40% of dog owners travel with their pets on an annual basis and 15% on a monthly basis.
Unique designs and concepts of authenticity & innovation will be the company’s competitive advantage. Boston Made, Inc. will offer a collection of curated products specializing in unique hand-crafted designer fashion, which will attract the pet lovers in the targeted area.
Looking forward there are two major trends that are transforming the pet industry: the prevalence of “millennial pet owners” and a shift in the way pets are viewed. This shift in the way pets are viewed means that pet owners are being more selective about the products that they purchase for their pets and they are willing to spend more on them. These two factors will prove beneficial for the company and assist it in capturing a significant share in the market.
Marketing is the key to success for any business and the pet products industry is not an exception. To attract potential clients, the company will offer products at competitive pricing, along with quality assurance, all backed by a solid marketing plan which has been outlined as follows:
A website is probably the first point of interaction of a company with its prospective clients. According to research, 80% of people look at websites, when looking for products or services. Boston Made, Inc. has built an attractive website for its customers, which contains all the information regarding products offered by the company along with pricing for each. The Company will regularly update its website content and features to keep itself at the top of search engine results. Updating the web pages regularly will grab more numbers of visitors from the targeted location and in turn grow the revenue base of the company.
Millennials nearly double baby boomers in relation to time spent on social media - 90.4% of millennials are active social media users compared to 48.2% of Baby Boomers. As millennials are the major owners of pets in the United States, so the company will target this segment by framing aggressive social media marketing strategies. It will start with prospecting campaigns on Facebook to bring awareness and then re-engage website visitors by creating additional touchpoints of education for those who have yet to convert. It will also regularly update posts on its social media platforms introducing different contests for the pet lovers to earn discount codes or coupon codes. Posting on special days like National Dog Day or Love Your Pet Day, Halloween, New Year’s Day, Christmas, etc. will also spread the word about the business and encourage people to buy trending clothes and accessories for their pets to celebrate with their pooch.
Facebook: There were 221 million Facebook users in the United States in 2019, which is expected to reach 223.2 million by the year 2023.
Instagram: By 2023, the photo-sharing site is projected to reach 120.3 million monthly active users in the United States, up from 107.2 million users in 2019.
More and more, brands are coming to rely on influencers to meet their marketing goals. According to Mars, 30% of pet parents follow celebrity pets on social media. The Company will partner with pet bloggers to incorporate its products into their content, as well as lifestyle bloggers who have an affinity for writing about their animals. The next wave of logical and diverse brand partnerships lies with pet bloggers. Partnering with these bloggers who have pets and can showcase their furry friend interacting with the brand will create some adorable and shareable content for the brand across all its social media channels.
Studies show that between 70-80% of people research a company online before visiting the small business or purchasing products from them. A well-crafted SEO strategy will drive more traffic to the company’s website as it will push the website to the top of the search engine rankings, which will offer higher customer visibility. The Company will develop appropriate keywords like ‘Designer Clothing Options for Dogs’, ‘Dog Accessories’, etc. to rank its website higher in search engine results enabling it to drive more traffic to the website.
Business e-mail marketing has proven to be an effective tool among other successful marketing strategies for directly communicating with the targeted customers. As of 2019, more than half of the world’s population used e-mail. The Company will create monthly newsletters including various sections such as existing and new products, as well as special events, holidays, sales, and discount offers, which will be distributed to the existing and potential customers in their e-mail. Receiving e-mails from the customers regarding their choice will also help the company to improve the designs of the products in the future, which will create a loyal customer base for the company.
Capturing the attention of readers and encouraging them to take action is one of the most effective ways of finding new customers online. Blogging is one of the best ways to grow business and reach out to new people. Posting educational content will help to boost the company’s online reputation. Posting high-quality and unique blogs will improve the search engine rankings, helping to ensure that more people see and visit the website of the company. The content to be posted will be in relation to answering the common questions among the pet owners and help them keep their pets safe and healthy. Promotion of this content online will result in improvement of ranking on search engines and more people will stumble upon the articles and bookmark them, share them with friends, and get in touch to ask about the company’s products.
Advertising digitally is an effective way to target potential clients, especially of a business that has an online presence. Boston Made, Inc. will leverage different advertising methods like banner ads, display ads, local advertisements, etc. to build its brand identity and promote its products to the clients.
Pet owners often form strong communities in their local areas. Interacting with nearby pet owners will keep the business’ name fresh in potential customers’ minds, boost reputation among local animal lovers, and help build loyalty among current clients. According to a study by Nielsen, 83% of consumers trust recommendations from people they knew, while 70% trusted opinions posted online from people they don’t know. Thus, positive testimonials received by the company will be shared through social media channels, so that people who are interested in the products can find it easily. Aside from maintaining a glowing five-star symbol next to the company’s name on Google and Facebook, customer reviews will also help the company to rank ahead of lower-rated businesses on search engine results pages, and allow it to develop better relationships with the customers. Participating in events like Woofstock Dog Festival, Metrowest K9 5K Trail Run and Family Fun Day, and Devens Dog Festival will further allow the company to attract clients through word of mouth advertising.
Brochure is an effective way to raise awareness of the targeted customers and help them understand the company’s offerings better. The Company will distribute brochures containing information regarding the product offerings, management, and key operating data of the company.
For an established business, most of the customer growth comes from referrals. Boston Made, Inc. will introduce a referral bonus program in the form of bonus products, discount vouchers or coupon codes to incentivize its existing customers and further expand its customer base.
Up to this point in the business development plan, the reader has been given key insights into the company formation, startup funding requirements, core operational activities, goals and objectives, sales and marketing strategies and its leadership structure as well as investigating key characteristics of the market that the company operates in. This section will examine the feasibility of the business model, and the relative investment return for its founder and investors, by presenting a series of robust financial projections and modeling outcomes.