CEO of Chewy Sumit Singh ‘dances to work everyday’, thanks to the increasing spending power of his customers – the “pet parents.”
Chewy is an online pet retailer that since 2018 has grown presence and engagement with America’s loved-up pet owners. In 2018 and 2019 the company spent ‘astronomically’ on marketing and strengthening e-commerce operations to have that investment pay of significantly as the pandemic saw more pet adoptions and more online spending. With an increasing market share, revenue has passed the $7 billion mark with over 20.1 million active customers, and sales per active customer of an impressive $404.
And whether it’s the basics like dog food, pet furniture or indeed attire (quilted puffer coats are quite the trend for humans and canines in these colder months) Chewy who partner with brands such as Disney, say they know the way to a fur heart.
Singh was speaking at the National Retail Federation ‘Big Show’ in New York, as the retail world gathered once again in real life to debate and discuss the future of the ever evolving world of retail.
And whilst it might be tough for the pets themselves to get involved with browsing online for goods – real life bricks and mortar store examples of retail pet paradises are alive and well in New York.
On the sidewalk before you enter the Reddy store (which is part of Petco) is a decal of a paw-print with the promise of “Free Belly Rubs Await”. Canines can accompany their human friends in store to be greeted by a chandelier made up of lightbulbs and hanging tennis balls.
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In-store, the theatre of the retail on offer is as focused on pups as it is owners. Dogs have harness and attire fitting areas with custom-sized benches to make the process more comfortable and free tasty treats. There are even floor based mirrors to check out your four-legged friend to check out their appearance. Sadly, whilst not meaningless to dogs, mirrors are not tools to help them feel camera-ready; they are more likely to be a ‘mere backdrop of life’ according to American Scientific. Practically the store also has the all important clean-up station with poop-bags, gloves and sprays.
Services include collar engraving and dietary consultations. The Reddy proposition is all about getting you and your fur-pal ready for adventures with products that are also said to be better for the planet. The store based in Soho, New York was opened in October 2021 as an experiential retail environment.
Across the pond in Britain, the power of the pet pound (£) is as buoyant, with a huge growth in pet-ownership.
In 2010, approximately 22% of UK households were dog owners, a rate that stayed level for nearly a decade until 2020-21 when it escalated to 33% – that is over 12 million households.. The pandemic increased the appeal and the opportunity of becoming a pet owner: working from home makes having a four-legged friend a more realistic prospect.
Indeed, general pet ownership has seen significant growth. Last year, the pet food manufacturers association estimated that 17 million (59% of) UK households have pets.
The UK’s largest pet-store chain Pets at Home, reported sales of £319.4 million in the 12 weeks to December 30 2021, an increase of 5.8% year on year. The retail business saw a boost with pet parents turning to more premium products Despite the cost pressures, bosses are confident that underlying pre-tax profits will beat expectations, coming in at at least £140 million.
There was strong growth in Pets at Home’s VIP loyalty scheme, up 13% year on year to seven million members, with more than one in four shopping across stores and online.
The brands puppy and kitten club membership increased by 60%, with on average 24,000 new members registering every week and members usually spending a third more than non-registered customers.
“The trend of new pet ownership has continued at the same pace we saw through the pandemic and I don’t see that dropping off” predicted CEO Peter Pritchard.
Pets at Homes also indicated that the inflationary pressure and the ongoing issues in supply chain were ongoing points of concern: “While we are not immune to these challenges, we are proactively mitigating them through a series of planned initiatives.” said Pritchard.
With the average life span of a dog being 10-13 years and cat being 12-18 years , the current surge of additional pet owners presents a decade of opportunity for the pet industry.
The possibility to build authentic and lasting relationships with every customer is significant, and those that do this respectfully will win the hearts and minds of the ‘pet parents’.
There is still much opportunity for pet retail to deliver past the promotions, premium brands and plush toys to ensure that this generation of pet-owners can offer the best quality of life for their pets that they can afford.
Chewy absolutely recognises this growth potential. Singh asserts: “A pet and a pet parent in their life cycle have greater needs than just buying food or toys or accessories. There are real health care needs, there are real services needs, and we have an obligation to connect those.”
Having a pet often means a significant commitment in terms of time and money, and animal charities are keen to ensure that the realities of pet ownership are clear from the outset.
As pet retailers enjoy the boost from the consumers desire to be a pet parent, the industry must be ready for a new era and one in which retailers deliver to customer, stakeholders, community and indeed to the animals.
As well as sustainability and environmental improvements, leaders must ensure that their organisations are engaged with stakeholders and the wider pet community. This means seeking not just opportunities that bring financial gain but also a commitment to helping the owners through all stages of the pet’s life.
Support and education for pet owners should be part of the offer from retailers, as we see a shift away from generic stock images of perfect pets and towards a celebration of individual stories and realities of everyday-life pet ownership.
Just as the beginning stages of owning a pet can be exciting and all-consuming, the last days can be emotionally turbulent. Clumsy CRM systems that message about pets that have ‘gone-too-soon’ and how a retailer engages at a point when there is not longer a pet at home are crucial areas to address. Retailers need to develop a more sophisticated approach which ensures nuanced support and an appropriately sensitive response at these genuinely emotional moments of the pet-owning cycle
This is truly one area of retail where bricks and mortar environments play an important role and indeed where smaller, independent businesses can flourish. The opportunity for a retailer to build a personalized, one-to-one rapport with pet and owner, as advisor, counsellor and indeed friend, is one that many small retailer both understands and delivers.
James O’Reilly is the owner of a local pet and supply store Honley DIY and Pet Supplies in Huddersfield, Yorkshire, England.
“In the current climate when there is little or no support from our big suppliers we try go that extra mile to find the best quality products for our customers. We invest in our knowledge and being ahead of trends and new concepts and pride ourselves on our ongoing relationship with customers. If we recommend a new food to a customer, we always follow up to see how the pet is getting on and to understand if there is anything else we can assist with. We want to ensure every pet can thrive.”
The Honley message and approach chimes with that of Sumit Singh in New York. Singh told the NRF conference attendees that it ‘takes a village to raise a pet’ with cooperation, networking and an holistic approach shaping the future of pet ownership.
This is a philosophy that is already delivered by local pet-stores from the heart, and where smaller retailer certainly has taken the lead.