Many industries claim to be recession-proof. The services industry, for example, was long thought to be impervious to economic downturns until the pandemic made person-to-person businesses untenable.
But one sector has proven especially durable: the pet industry. Research from the American Pet Products Association shows that over the last 2.5 decades (through multiple recessions), the industry hasn’t seen a single year of negative growth.
Source: Statista Review of American Pet Products Assoc. Data
The reason is simple: People don’t see the money they spend on their pets as discretionary. Ninety percent of Americans consider their pet part of the family, and one poll said 82% of millennials consider pet ownership a kind of primer for parenting.
The humanization of pets means that pet owners are increasingly seeking out products and services that would have traditionally been reserved for people, especially when it comes to health.
In our new report, we dig into case studies in 4 major areas of the pet health industry:
Some of them are open to new competition. Pet insurance, for example, has only reached an estimated 1-2% penetration among North America’s ~200m pet-owning households (it’s closer to 25% in the UK and parts of Europe).
Others focus on emerging challenges. Veterinary diagnostics, for example, can be extremely lucrative -- Idexx Laboratories, the largest diagnostics company, sees ~58% operating margins. But the shift to remote work in the COVID-19 era has accelerated changes in the pet-medicine world, and left vets in search of new solutions for their businesses.
We also highlight expertise from members of the Trends community who’ve spent years building in the pet industry. They call out challenges that only insiders can recognize, and identify opportunities on the horizon.
Who says you need an artist’s training to create a masterpiece?
Diamond painting is one of the art world’s “up and coming, addictive” crafts. So declares the r/diamondpainting subreddit, which has blown up in the last 2 months, to ~25k subscribers. That’s 10x the size of the community at the start of 2020.
What exactly is diamond painting? Think of it like a mix between cross stitching and painting by numbers. Artists apply small rhinestones to a canvas, to create original mosaics or recreations of famous works. Canvases can be as small as a regular painting or big enough to dominate a living room.
Many companies (like DiamondXpres and Paint by Diamonds) make kits aimed at beginners, but there’s plenty of opportunity to sell supplies and accessories to diamond painting enthusiasts.
Lanyards Are the New Must-Have Mask Accessory
Etsy is minting mask millionaires. The COVID pandemic has powered huge demand for face coverings, and some amateur crafters are making 7 figures selling masks.
But there’s another mask-centric opportunity emerging, in the realm of accessories. Search interest in mask lanyards is exploding:
Source: Google Trends
These lanyards can be worn around the neck, and they’re designed to keep your face covering clean and close at hand. They’re especially helpful for kids, who might be prone to ripping off their mask, losing it, or leaving it behind at home.
According to Jungle Scout, Amazon searches for mask lanyards are up 239% over the last 30 days, with mask clips, chains, holders, and straps all seeing rising interest, too.
Sports Gambling Apps Are Going Mobile
In January, we wrote about the explosive growth in sports gambling (one of our most popular articles this year). The trend continues to sweep across the US, and the industry could hit $81B by 2030.
Last week, a new sports gambling app made a huge splash: On Sept. 20, sportsbook app downloads hit an all-time single-day high, powered by the debut of the Barstool Sportsbook app.
The top mobile sportsbook apps in the US have been downloaded 3.4m times so far in 2020 -- that’s on pace to top 2019’s total of ~4m downloads.
In its first week, the Barstool Sportsbook app was downloaded 53.6k times -- more than fantasy-sports titans FanDuel and DraftKings saw at launch combined (26k).
More signs that sports gambling is making big inroads in mobile and social:
ESPN just launched a YouTube channel dedicated to sports betting, and a digital show called “Bet.”
Stock Sanity is a new, bracket-style contest that pits stock pickers against one another, with cash prizes for the top performers.
With the casino industry still hurting because of the COVID pandemic and American pro sports just a few months into their revival, expect to see more recreational gambling options on the horizon. One example: FOX Bet Super 6 is letting users wager on what will happen in tonight’s presidential debate.
Read our report to see where the growth is in sports gambling and to learn how to capitalize on the boom.
Trends Signals Quick snapshots from across the internet of potential trends before they happen.
The Signal: In a time when the overall retail sector is projected to shrink by 15%, the online secondhand sector will win big. It’s projected to grow by an estimated 69% from 2019 to 2021. The secondhand market, currently valued at $28B, is projected to more than double, to $64B by 2024.
Luxury goods are a well-documented winner in resale -- the secondhand luxury market is growing 4x faster than the primary market. The high price tag and durability of high-end products make them a good fit for resale.
Clothing, watches, and handbags are some of the most common items you’ll find on luxury resale sites. What premium products could be next? One candidate that warrants a closer look: bikes, especially high-end bikes and e-bikes.
The COVID pandemic is fueling a cycling boom, and the resale market is one area where you can capitalize.
For example, Moore’s is a bike shop based in Hattiesburg, Mississippi. Its refurbished secondhand bikes usually sell within a day. Many are even pre-sold before they go into the shop for renewal. On average, the company sells a pre-owned bike at a 64% gross margin, compared with a new bike at 43%.
The Opportunity: Combine the growth of the premium resale market with the explosion of e-bike sales, and you have yourself a winning niche.
Premium e-bikes are one of the biggest-ticket items in cycling. They go for as much as ~$14k out the box. Improvements in battery technology, a shift towards zero-emission vehicles, and government subsidies are sending the e-bike industry into overdrive: It’s expected to nearly double in the next 5 years, from $21.1B in 2018 to $38.6B in 2025.
As the pre-owned e-bike market expands, there will be space for more companies that buy, sell, exchange, and refurbish secondhand e-bikes and specialized parts.
Search data highlights other electric transportation options that could take off:
scooters: 1.2m searches/month (according to Keywords Everywhere)
For those who don’t want to assume the risk of stockpiling inventory, there is also the option to create an online marketplace that connects buyers and sellers. Bikesoup, in the UK, charges people ~$25 to list their bikes for sale on the site. BikeExchange in Australia does the same, with an additional option for customers to pay ~$15 to boost their listing in search results.
Parts Exchange: High-end electric bikes are “absolute prime candidates for part exchange,” noted Cycling Industry News, in an interview with Matt Connelley, founder and CEO of Cycle Exchange.
The worldwide automotive aftermarket parts industry is worth $723B, compared with the primary automotive sales industry, which is worth roughly ~$2T. Applying the same ratio (35%) to the global e-bike industry, we can extrapolate that the e-bike aftermarket industry may be worth as much as $13.5B (35% of $38.62B) by 2025.
An upstart could establish itself as the go-to company for aftermarket e-bike parts and services for B2B and B2C markets. One player already in this space is E-Bike Marketplace. According to their website, their rebuild service currently takes 12 weeks due to high volume.
Rentals and Partnerships: As low- and high-end e-bikes start to flood the market, why not snap them up and start an e-bike rental business? You wouldn’t have to compete with the likes of Bird and other micromobility startups to win. One niche worth further exploration is tourism.
Partnering directly with hotels, vacation-rental hosts, and other tourist accommodations is one way to capture travelers looking for a fun way to explore a city by bike. One company successfully applying this model in Europe is Greenstorm.
The company, which recently raised an undisclosed “double-digit million Euro” investment, partners with ~1k hotels in central Europe that let them store bikes in empty rooms in exchange for discounted rental prices for their guests.
Sam has a spreadsheet of companies he’s keeping his eyes on. Here’s a peek at one from his list:
Outlier.org: From the co-founder of Masterclass, Outlier is rewriting the future of college classes. They produce beautiful, cinematic online courses with transferable college credits, for just $400 each (~⅙ the price of a typical college class). The kicker? Courses are fully refundable to anyone who completes all the work but doesn’t pass.
Why It’s Interesting: Apparently ~1m students in the US take Calculus I each year, paying ~$2.5k each. That means calculus alone is a $2.5B market. In January, Outlier’s funding total to disrupt that market reached $16m -- 3 months before the entire world moved education online.
This week’s Trends send was brought to you by Sam Parr, Steph Smith, Julia Janks, Nick DeSantis, Ethan Brooks, Trung Phan, and Brad Wolverton. 😉 Got 15 seconds? Please share your feedback by hitting the smileys above. Tell us what you liked and how we can make Trends better.