Facing tougher competition from mass merchandisers like Wal-Mart, PetSmart is looking toward in-home services, such as dog walking and backyard cleanup, to give it a leg up.

As we’ve documented in the pages of Pet Business, the current recession has made the relatively stable pet products category a big draw for all types of retailers, particularly those in the mass channel. This could have major implications for big-box pet stores, which wield price and selection as their main competitive strengths. Even with their considerable buying power and merchandising space, it will be tough for retailers like PetSmart and PETCO to go head-to-head against the likes of the major discounters, should these retailers expand their pet selection significantly.

In an effort to prepare for what many industry observers consider to be an inevitable development, PetSmart is looking toward an expanded service menu to set it apart. The retailer has already experienced significant success with service offerings such as grooming, training, boarding and day care–to the tune of $526.6 million in revenue in 2008. Now it is looking to expand its service menu beyond the four walls of its stores and into the homes of pet owners.

“In-home services are a big opportunity, but we have a lot of work to do before we determine how to make that work,” said PetSmart CEO Robert Moran in a July 15 telephone interview with Bloomberg News. “It becomes a competitive advantage if we can break the code on how to provide that.”

Independent pet specialty retailers would do well to learn from PetSmart’s example. In a competitive climate that’s heating up, the big-box pet store is not content to rest on its laurels. Instead, PetSmart is proactively looking for ways in which it can increase its value to its customers by furthering its reputation as an all-in-one solution center for pet owners.

Now, offering dog walking and backyard cleanup services may not be the right fit for a small, independent pet shop–it may not even be the right fit for PetSmart, the jury is still out on that. However, what will fit any and all retailers is a proactive approach to getting a leg up on the competition. Maybe it’s the addition of a different type of services, like pet photography, or a line of private-label products. The point is to do something–anything–that will increase the store’s value to its customers and give them another reason to come through your front door instead of picking up their pet products at the mass merchandiser or grocery store across the street.

Otherwise, it may be the competition that gets a leg up on you.