Before we dive right into sharing a case study from CASTUS about how they were able to help Petco incorporate numeric distribution into their strategies and help them expand their presence in the market, let’s discuss what this type of distribution means from a marketing perspective. Numeric distribution is a percentage measure of stores that stock your product or brand compared to the total market of stores in the relevant market. The calculation for this is relatively simple and looks like this:
Numeric Distribution = # stores that stock your brand / total stores in relevant market
Knowing how to calculate this allows brands to see what portion of the market their products make up. It also allows them to see potential markets for expansion for their future business growth goals, which is precisely how Petco, a leading retail pet store chain, effectively utilized this knowledge and expanded its market in the pet industry. They utilized numeric distribution to enhance their market presence and service availability. This case study from CASTUS explores how Petco applied numeric distribution principles to drive strategic growth and achieve business success.
Identifying Market Potential
Petco recognized the need to expand its presence in international markets to capitalize on the growing global pet care market. The company conducted a comprehensive market assessment to identify new markets and ultimately selected Canada for its expansion due to its promising market potential and relatively untapped pet care segment.
Expanding Through Partnerships
Petco partnered with CASTUS to identify and develop relationships with well-established Canadian retailers. This partnership focused on increasing the availability of Petco’s products across multiple retail outlets, ensuring a higher numeric distribution and better market penetration. By the end of 2022, CASTUS helped Petco generate $43 million in incremental revenue through the partnership with Canadian Tire.
Enhancing Numeric Distribution
To calculate its numeric distribution, Petco analyzed the number of potential retail locations versus those currently stocking its products. For instance, if there were 1,200 potential retail locations, and Petco’s products were available in 480 of them, the numeric distribution was:
Numeric Distribution = (480 / 1,200) = 40%
This calculation highlighted areas for improvement, prompting targeted marketing and partnership efforts to increase product availability.
Strategic Implementation
Petco implemented several strategies to enhance its numeric distribution in its market:
- Targeted Marketing: Focused on regions with lower numeric distribution to increase awareness and attract more retail partners, allowing them to expand their market share and improve their numeric distribution.
- Product Differentiation: Introduced unique product features to make Petco’s offerings more appealing to retailers and their customers. We can see in this video shared in the CASTUS case study that one way of differentiating their products was for Petco to share promotions about how they were removing artificials from their shelves and products.
- Customer Engagement: Leveraged loyalty programs and referrals to drive demand and encourage more retailers to stock Petco products. With multiple segments in their target market, Petco aimed to provide everything needed for a pet’s well-being. We can read about their social media strategies in this article from Ambassify.
Growth Results
After implementing these strategies, Petco can reassess its numeric distribution. The efforts led to a significant increase in retail locations stocking their products, ending with 500+ store distribution, 350+ SKU Count, and 65% Assortment Penetration. This would be like having them go from the 480 stores we mentioned earlier to 780 out of the 1,200 potential stores:
New Numeric Distribution = (780 / 1,200) = 65%
This improvement in distribution enhanced Petco’s market presence and resulted in higher sales and better brand recognition.
By understanding and applying numeric distribution analysis, Petco expanded its market reach and improved service availability. This case study demonstrates the effectiveness of leveraging numeric distribution to guide strategic decisions, optimize market presence, and drive business growth. Petco’s approach is a valuable example for retail pet store owners looking to enhance their business strategies and achieve similar success. With the case study stating that the global pet care market is projected to be worth more than $197.6 billion by 2027, this is an excellent time to start looking at your numeric distribution and fine-tune your strategies to fit your business goals better. The industry is continuing to grow, so let’s grow with it!
