PET TRENDS 2006

Retailers are increasing their selections of holiday gifts for the estimated 165 million pets in the United States. Cashmere sweaters, 18-karat-gold bowls and personalized Swarovski crystal collars are just a few of the treats Santa will be delivering to pets this year. Neiman Marcus' 2006 Christmas Book included gifts for dogs - Choices include an argyle cashmere vest for $245 and cashmere short-sleeve polo for $175 by canine couture designer Hedy Manon, crystal-encrusted leashes for $185 and luxury pet homes starting at $5,000.

Overall, spending on pets has more than doubled from $17 billion in 1994 to an estimated $38.4 billion this year, according to the American Pet Products Manufacturers Association. About 63 percent of U.S. households own at least one pet. Owners spent $36.3 billion for pet products last year.

"Stores are certainly prepping for a big season," said Bob Vetere, president of the APPMA ."A lot of retailers are thinking that, based on Halloween, Christmas is going to be big. Now, you're seeing the Targets and Wal-Marts of the world stocking up on presents."

PetSmart, which calls pet owners "pet parents," says the humanization of pets helps to boost spending on products and services like grooming and boarding all year long but especially during the holidays. Rashell Cooper, a PetSmart product buyer who specializes in dog apparel and soft-sided carriers, said many pet apparel and accessory trends mimic human fashions this season for that reason. "You see a lot of bling. Apparel, collars and beds have more embellishment, whether it be with rhinestones or Swarovski crystals," Cooper said. "It's just not a basic T-shirt or a basic dog bed any longer."

*New pet services : Pet hotel operators, pet butlers, pet sitters, pet massage therapists, pet communicators and pet travel agents.

*Medical advancements : Canine dialysis, brain surgery, hip replacements, cancer treatments, teeth correction with braces, cataract surgery and canine prescription lenses.

*Animal-assisted therapy : Increasing use of companion animals to assist with everything from detecting cancer in humans to comforting Alzheimer's patients.

*Licensed pet products : Licensing of popular icons for pet toys and clothes, including Spongebob, Clifford The Big Red Dog, Dr. Seuss characters and Barbie.

Following its Old Yeller dog food last year Disney plans to unleash a new category of licensed goods that are sure to appeal to four-legged creatures and their owners, alike - pet care products.

The entertainment company is looking to capture a slice of the $75 billion global pet care industry ($38 billion in the U.S.) with a new line of products for dogs, cats, hamsters, fish ... even hermit crabs. Executives discussed details about the rollout at the 2006 Licensing Show in New York City. Disney Consumer Products wants to use the appeal and popularity of some of its iconic characters to expand into the pet care category with pet food, apparel, bedding and toys.

Humanization of Pets

The humanization of pets - dogs in particular - has increased the demand for products and services from empty-nesters and young professionals, making for big gains in the pet marketing sector. The transition of dogs and cats from mostly outdoor animals to beloved family members has been progressing in recent years, but the trend to view them in more human terms has gained popularity.

The very hot pet market has increased the number of exhibitors at trade shows, providing pet stores, boutiques, and dept. stores with a vast selection of merchandise. Colors and styles now coincide with human fashion trends. Last year, Target Corp. revamped its pet department, expanding its store space and introducing new clothing, toy and bedding lines. The discounter has also developed an exclusive line of super-premium dog and cat foods called LIFELong. "We've had tremendous feedback," said Target spokeswoman Brie Heath. "People have come to expect fashion from Target," and now pet clothes like khaki trench coats and faux fur jackets from designer Issac Mizrahi are big sellers. Architect Michael Graves created a $99 doghouse and a paw-print jacket for the line.

While basic pet needs - food, veterinary care, and medicines command the largest share of the market, pet luxuries, i.e. things people buy for their pets that are driven more by emotion than basic needs, are the fastest growing segment in the pet market today. Pet luxuries, orÊproducts and services bought forÊpampered pets,Êrepresent the best opportunity for pet product marketers, retailers and service providers. People spend more on purchases that are driven by desire and passion, than those bought out of pure need. So it is in the realm of pet luxuries, rather than basic necessities, where pet marketers need to explore.

Today nearly two-thirds of U.S. households own a pet, or roughly 69.1 million homes, according to the latest research. Nearly half of all households (45 percent) own more than one pet. Commenting on the pet market, the APPMA says that the "humanization of pets" is one of the biggest trends in the pet market today.