When night falls and emergency pet needs arise—be it depleted cat food or urgent deworming medication—pet owners increasingly turn to on-demand delivery services. While this convenience has been a boon for consumers, traditional brick-and-mortar pet stores face mounting pressure to evolve. With major players like NetEase Yanxuan partnering with Linxiaohu to enter the pet delivery market, how can local pet shops compete and win customer loyalty, much like Watsons succeeded in the beauty retail sector?
Industry Giants Enter the Pet Delivery Arena
The recent collaboration between NetEase Yanxuan and Linxiaohu has sent shockwaves through the pet industry. Combining NetEase's brand power with Linxiaohu's specialized pet delivery network, this partnership signals a new era of online-to-offline integration in pet supplies. Linxiaohu, a national pet supply delivery supermarket chain, operates nearly 500 franchised stores across 60+ Chinese cities including Guangzhou, Shanghai, and Hangzhou.
A typical Linxiaohu store in Changsha's Yuhua District stocks 26 product categories ranging from premium pet food to medical supplies, with particular demand for medications and disposable pet pads. The store maintains monthly sales of 1,000-3,000+ orders through flexible delivery minimums (¥68/¥128 tiers), generating estimated monthly revenues exceeding ¥68,000 per location.
The Decline of "Chasing Traffic" Strategies
The pet market's initial growth was fueled by viral pet content on short-video platforms, creating a "traffic-first" mentality where promotions and influencer marketing dominated. However, as digital customer acquisition costs soared and returns diminished, many pet brands found themselves ill-prepared to return to physical retail channels.
Simultaneously, the rise of instant retail models catering to "lazy economy" consumers has created new challenges. This O2O evolution allows shoppers to receive goods within hours without leaving home, potentially disrupting both traditional e-commerce and physical stores. The pet sector has seen particularly rapid adoption, with pet delivery services attracting numerous investors despite being in their infancy.
Watsons' Successful Pivot: A Case Study in Retail Adaptation
While many beauty retailers struggled with declining foot traffic, Watsons demonstrated remarkable foresight by shifting focus from store operations to customer lifecycle management as early as 2018. Moving beyond traditional retail metrics like sales per square foot, the company prioritized customer satisfaction, retention rates, and average spending intervals.
Watsons built sophisticated customer engagement channels through mini-programs, enterprise WeChat, and community groups, connecting with 43 million users. Its innovative O+O (Offline plus Online) model seamlessly integrated physical stores with digital platforms, maintaining double-digit online growth even during pandemic restrictions. Key to this success was transforming beauty advisors from salespeople into trusted consultants—a strategy that reduced reliance on dense store networks while improving inventory efficiency.
Survival Strategies for Local Pet Stores
Pet retailers can draw valuable lessons from Watsons' transformation by focusing on service differentiation and community building:
1. Pet Health Advisory Services: Employing certified pet health consultants to provide nutritional guidance and preventive care advice can establish trust and increase customer retention.
2. Behavioral Training Programs: Hosting professional pet behavior workshops helps owners understand their companions while adding value beyond merchandise sales.
3. Creating "Third Space" Communities: Transforming stores into social hubs through pet parties, competitions, and educational events fosters owner engagement and brand loyalty.
4. O+O Integration: Merging physical and digital experiences via apps and social platforms enables convenient services like online consultations and appointment booking.
5. Staff Role Transformation: Training employees as knowledgeable pet advisors rather than sales clerks enhances personalized service and long-term customer relationships.
Implementing these changes requires significant investment in staff training, technology, and organizational restructuring—with benefits that may not immediately reflect on balance sheets. Not every pet store should pursue identical strategies; success depends on clearly defining each business's unique market position and competitive advantages.
For specialty high-end retailers, emphasizing premium pet care services may prove most effective, while neighborhood stores might focus on building local pet owner networks. In the face of delivery service disruption, proactive adaptation—not reaction—will determine which pet retailers thrive in this evolving marketplace.