In this article:
- Petco projects that the pet industry will grow by 7% by 2025.
- The company wants to migrate customers to a subscription service called Vital Care
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Every Sopranos fan remembers this scene. Tony Soprano chastises his captains, who aren’t making enough money for the crime family. He refuses to accept a struggling economy as an excuse and turns to his consigliere, Silvio Dante, for support.
Tony: Sil, break it down for them. What two businesses have traditionally been recession-proof since time immemorial.
Sil: Certain aspects of show business… and our thing.
According to Petco CEO Ron Coughlin, a third business has now made its way into this exclusive list: the pet industry.
Despite the rise in global inflation, Petco, one of the biggest pet retailers in the US, projects that the pet industry will grow by 7% by 2025.
It is certainly off to a good start in 2022: Jungle Scout’s Q1 2022 Consumer Trends Report shows pet supplies topping the list of categories experiencing sales gains.
Speaking at Petco’s 2022 Investor Day, Coughlin declared that the pet industry is “resilient to economic downturns” and said the company intends to compete for a larger share of the dog pie with the following strategic initiatives:
- Scaling personalization capabilities by leveraging its pet database, seeking to deepen engagement and loyalty.
- Enhancing the company’s physical footprint (brick-and-mortar shops) and digital capabilities.
- Connecting with high-value customers through partnerships with other brands, such as shop-in-shops partner Lowe’s.
- Encouraging customers to get supplies and services through a subscription service called Vital Care, which offers unlimited vet exams and discounts on food and grooming for $19.99 per month.
Petco believes that expanding its vet care is critical if it wants to migrate many customers to its subscription service. The company had nearly 200 full-service veterinary hospitals at the end of 2021 and plans to grow to 900 this year. In addition, Petco bought a 50% stake in Thrive Pet Healthcare, a veterinary firm that has helped more than 1.3 million pet families annually at Petco stores since the companies paired up in 2017.
“We are defining the future of pet parenting in an incredibly high-growth and economically resilient category,” said Coughlin. “Our ecosystem is built to capture the market opportunity and positions us as a leader of what we call Retail 3.0.”
An ecosystem that includes food, supplies, e-commerce & brick-and-mortar stores, vet care, grooming, and wellness services – and relies on scaled personalization capabilities? Sounds like a recipe for good dog pie.