September 22, 2025
AllaSerebrina/Depositphotos.com
Does Chewy Have a Big Paid Membership Opportunity?
Chewy+, Chewy’s recently-launched paid membership program, is exceeding expectations with CEO Sumit Singh comparing its potential stickability to similar programs from Amazon, Walmart, and Costco.
“We see this program in line with an Amazon Prime or Costco membership or a Walmart+ with similar benefits and similar returns,” Singh said on Chewy’s second-quarter analyst call. “Our job is to position it as the best pet membership program in the industry.”
Chewy began testing the program in May 2024. The program offers:
- Free shipping on all orders.
- 5% rewards to redeem on future orders.
- Limited time seasonally relevant member exclusive offers.
Chewy is currently offering a 30-day free trial period to new subscribers. Once the trial ends, members pay an introductory price of $49 per year. Non-members pay $4.95 in shipping fees per order, and earn free shipping for orders over $49.
Singh said in the month of July, approximately 3% of Chewy’s total monthly sales were to Chewy+ members. The retailer is seeing “strong incrementality” in spend, NSPAC (Net sales per active customer), and a positive contribution profit per customer across Chewy+ customers compared to non-members.
Chewy+ customers are also buying at a higher frequency and adding three more categories on average to their orders versus non-members, he said. Additionally, Chewy+ members are displaying incremental Autoship adoption and greater mobile app usage relative to nonmembers.
“All of this is leading to both higher as well as accelerated NSPAC curves for Chewy+ customers compared to non-members, which in turn is contributing positively to Chewy’s net sales flywheel,” said Singh. “As we exit this year, we expect approximately mid-single-digit percentage of our net sales to go through the Chewy+ program. Further, we expect the program to generate positive gross profit dollars in fiscal 2025, though at a gross margin rate below Chewy overall, reflecting both the ramp that we anticipate in the second half of this year and the mix of paid versus free trial members.”
He cautioned that Chewy will continue to evaluate the program structure, including pricing and member benefits.
Chewy+ Faces Subscription Fatigue Concerns
The momentum around Chewy+ comes as consumers are reportedly facing fatigue amid a surge in subscription offerings, including newer ones from Apple TV, Disney and Peacock.
A recent survey of 1,000 Americans from MarketWatch showed 40% had canceled a subscription service within the past 12 months, with one-in-three citing budget cuts as their reason for doing so. Subscribers spent a median of $60 per month, or $720 per year, on subscription services. Asked which subscription service they canceled, the top five answers were video streaming, 55%; music streaming, 23%; shopping platform, 15%; and gaming and grocery/kit delivery, both at 14%.
Amazon reportedly signed up fewer subscribers over this year’s Prime Day, and missed its target, despite extending the event to four days, according to internal company data reviewed by Reuters. Costco, however, continues to see healthy membership growth despite raising membership fees last September for the first time in seven years. In its fiscal third quarter ended May 11, the U.S. and Canada renewal rate concerning Costco was 92.7%.
BrainTrust
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
Paula Rosenblum
Co-founder, RSR Research
Neil Saunders
Managing Director, GlobalData
Recent Discussions
Discussion Questions
Does Chewy have a major opportunity to drive loyalty though a paid membership program?
Is the program structured appropriately or will it likely have to add more membership benefits and adjust prices?
Poll
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This works for Chewy because pet products are regularly purchased, pet spend is often prioritized, and because Chewy has a strong brand and good loyalty levels. I doubt it would work for many other brands in quite the same way.
I am a loyal Chewy customer. Unless the company opts to slow down delivery of the orders I already make, I see no reason to become a member,. And if they slow down delivery, I’ll just be pissed.
It makes no sense. I already pay a bit more for their products because of great customer service.
I’m 100% with you Paula, I love Chewy, I have an auto order once a month that gives me free shipping since its over $50. I don’t find a membership very compelling.
I have had an auto-delivery order with Chewy for kitty litter for years. I hadn’t heard of Chewy+ but it will save me $15 a year, plus 5% in rewards. I’m in.
Chewy+ makes a lot of sense, especially for shoppers who buy frequently but don’t usually hit the free shipping minimum, like people ordering pet food every month. Offering a subscription can encourage those shoppers to order more often which can boost loyalty and overall spend.
Chewy is already in the subscription business, and despite the talk around subscription fatigue, I don’t believe pet products fall into that conversation. Creating a membership program with obvious money-saving perks could draw existing customers in a little closer and entice new ones to join the Chewy club.
Chewy+ looks like it has serious potential to drive stronger loyalty, though not without risks and tweaks. It already shows encouraging early metrics: higher spend, more frequent orders, broader basket of categories per purchase, greater autoship use and stronger app engagement among members vs non-members. Because pet owners tend to have recurring needs and are pretty engaged, a value-packed membership can make sense for locking in customers.
That said, the current structure feels like a solid foundation rather than a final form. At $49/year with free shipping, 5% rewards, and seasonal member-only offers, it’s competitive — but consumers are increasingly wary of “subscription fatigue.” To sustain and grow the program, Chewy will likely need to add more perks (maybe faster shipping, special services, exclusive merchandise, deeper discounts) or tiered benefits, especially for its highest-spend customers. And pricing may have to adjust depending on how usage and value perceived evolve.
So, yes — Chewy does have a major opportunity here. If it leans into ongoing benefit refinement, segments its membership offering, and continues delivering real measurable value, Chewy+ could become a durable loyalty engine rather than just another subscription.
Word of caution, every membership has to chase renewals. Chewy+ is not Amazon. Likewise Walmart+ nor Costco or Sam’s Club is nothing close to Chewy’s business model. Naturally, there is convenience, but consumers know how to get value including a larger basket to qualify for “free shipping”. There will undoubtedly be times that the Finance suite will look at cost per order and having to “eat” shipping income plus giving rewards over time, this can get very expensive for Chewy.com. To charge for membership, the guideline shared is to giveback 2x what the membership cost is. So if you are a frequent buyer, purchase items for your pets with small orders under the threshold for free shipping and want rewards, then $49 annual is a win. Plus, if you join you may indeed take advantage of the convenience while paying a higher price point / less savings per basket vs. shopping Petsmart, Petco and Pet Supplies Plus.
Pet products occupy a unique behavioral space, characterized by high purchase frequency, emotional prioritization, and brand loyalty. Unlike streaming services that compete for attention, pet needs are non-negotiable and predictable. Chewy+ is actually a Trojan horse for services expansion. The membership isn’t the endgame; it’s the platform for telehealth, grooming, training, and other high-margin pet services that Amazon and Walmart can’t easily replicate. Chewy has a significant opportunity!
The most interesting data I’ve seen recently showed the decline in birthrate contrasted with an increase in pet ownership. According to the American Pet Products Association, 66% of households owned a pet in 2024 compared to 56% in 1988. That bodes well for Chewy.
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This works for Chewy because pet products are regularly purchased, pet spend is often prioritized, and because Chewy has a strong brand and good loyalty levels. I doubt it would work for many other brands in quite the same way.
I am a loyal Chewy customer. Unless the company opts to slow down delivery of the orders I already make, I see no reason to become a member,. And if they slow down delivery, I’ll just be pissed.
It makes no sense. I already pay a bit more for their products because of great customer service.
I’m 100% with you Paula, I love Chewy, I have an auto order once a month that gives me free shipping since its over $50. I don’t find a membership very compelling.
I have had an auto-delivery order with Chewy for kitty litter for years. I hadn’t heard of Chewy+ but it will save me $15 a year, plus 5% in rewards. I’m in.
Chewy+ makes a lot of sense, especially for shoppers who buy frequently but don’t usually hit the free shipping minimum, like people ordering pet food every month. Offering a subscription can encourage those shoppers to order more often which can boost loyalty and overall spend.
Chewy is already in the subscription business, and despite the talk around subscription fatigue, I don’t believe pet products fall into that conversation. Creating a membership program with obvious money-saving perks could draw existing customers in a little closer and entice new ones to join the Chewy club.
Chewy+ looks like it has serious potential to drive stronger loyalty, though not without risks and tweaks. It already shows encouraging early metrics: higher spend, more frequent orders, broader basket of categories per purchase, greater autoship use and stronger app engagement among members vs non-members. Because pet owners tend to have recurring needs and are pretty engaged, a value-packed membership can make sense for locking in customers.
That said, the current structure feels like a solid foundation rather than a final form. At $49/year with free shipping, 5% rewards, and seasonal member-only offers, it’s competitive — but consumers are increasingly wary of “subscription fatigue.” To sustain and grow the program, Chewy will likely need to add more perks (maybe faster shipping, special services, exclusive merchandise, deeper discounts) or tiered benefits, especially for its highest-spend customers. And pricing may have to adjust depending on how usage and value perceived evolve.
So, yes — Chewy does have a major opportunity here. If it leans into ongoing benefit refinement, segments its membership offering, and continues delivering real measurable value, Chewy+ could become a durable loyalty engine rather than just another subscription.
Word of caution, every membership has to chase renewals. Chewy+ is not Amazon. Likewise Walmart+ nor Costco or Sam’s Club is nothing close to Chewy’s business model. Naturally, there is convenience, but consumers know how to get value including a larger basket to qualify for “free shipping”. There will undoubtedly be times that the Finance suite will look at cost per order and having to “eat” shipping income plus giving rewards over time, this can get very expensive for Chewy.com. To charge for membership, the guideline shared is to giveback 2x what the membership cost is. So if you are a frequent buyer, purchase items for your pets with small orders under the threshold for free shipping and want rewards, then $49 annual is a win. Plus, if you join you may indeed take advantage of the convenience while paying a higher price point / less savings per basket vs. shopping Petsmart, Petco and Pet Supplies Plus.
Pet products occupy a unique behavioral space, characterized by high purchase frequency, emotional prioritization, and brand loyalty. Unlike streaming services that compete for attention, pet needs are non-negotiable and predictable. Chewy+ is actually a Trojan horse for services expansion. The membership isn’t the endgame; it’s the platform for telehealth, grooming, training, and other high-margin pet services that Amazon and Walmart can’t easily replicate. Chewy has a significant opportunity!
The most interesting data I’ve seen recently showed the decline in birthrate contrasted with an increase in pet ownership. According to the American Pet Products Association, 66% of households owned a pet in 2024 compared to 56% in 1988. That bodes well for Chewy.