Petco is changing the pet retail game and customer expectations at such a rapid pace that officials believe its competitors—both mom-and-pops and online retailers like Chewy—won’t be able to keep up.
Petco officials are particularly confident in the company’s in-store services like grooming and dog training and same-day delivery capabilities.
“Our customer acquisition in our services end of our business is a fraction of our competitors,” Ron Coughlin, CEO of the San Diego-based company, said during Petco’s Q1 2021 earnings call with investors on May 20. “If you think about things like Google Local, a mom-and-pop … isn’t going to be deploying tools like that, so we have the traffic advantage from the pet care center.”
Grooming and training are not the only services that are helping Petco stave off its competition. Its buy online, pickup-in -tore, curbside and same-day delivery services, including ship from store, are resonating with pet owners, Coughlin said.
“Our structural advantage of 1,453 micro distribution points or pet care centers is a strategic differentiator versus pure play online competitors,” he said. “We can get to the customer faster for lower costs than shipping from a [distribution center].
“Our pet care centers now fulfill roughly 83 percent of petco.com orders, which is just incredible,” Coughlin added. “We’re actively shifting customer expectations to same-day delivery, [which is] something pure play online competitors will be challenged to replicate nationally. This is particularly strategic in categories like fresh food that are much more costly to ship from distribution centers.”
During the earnings call Coughlin said that Petco officials were “super excited” about fresh food via same-day delivery. Just days after the call, Petco announced that it is expanding same-day delivery for its entire assortment of fresh and frozen dog and cat food, starting with JustFoodForDogs, the availability of which is planned to triple to 560 pet care centers in 2021.
Petco officials seem eager to find new ways to differentiate itself from its competitors, and the company is executing these strategies expeditiously.
The company, which rebranded itself as The Health and Wellness Company, kicked off 2021 with quite a few irons in the fire.
In March, the company removed traditional rawhides from store shelves and launched its Whole Health philosophy, which was created with the focus to improve pet well-being and strengthen one another when addressed as a whole.
“In the first quarter, we supplemented our focus customer acquisition approach with a brand building campaign to pull away from competition as a Health and Wellness Company,” Coughlin said.
Petco debuted its It’s What We’d Want If We Were Pets campaign in April, which is “intended to educate pet parents about what whole health means for their pets and motivate them to take action and so thinking about their pets, health and wellness, like they would think about their own,” Coughlin said.
In April, the company also made a commitment to increase its assortment of sustainable products to 50 percent by the end of 2025 in Q1.
“Petco is a strong brand,” Coughlin said. “It was dormant two, three years ago, we really reactivated it.”
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