Photo: Petco
Petco pilots experiential store concept for fur babies
Amazon.com’s encroachment into pet food sales has been making the big players in brick-and-mortar pet supplies rethink their strategies. Now, Petco is trying its hand at an experiential store concept to get customers through the physical door.
The chain recently launched a pilot of the new concept called PetCoach in San Marcos, CA, according to CNBC. The store dedicates only about one-third of its space to inventory, with the rest focused on grooming, veterinary care and pet-related services like dog walking. Petco is also testing a membership program at the new location. The company has plans to use PetCoach as a testing ground for features and then expand to additional locations.
A high-end in-store experience may differentiate Petco from its e-commerce rivals. But Petco’s main brick-and-mortar competition has also been pursuing an experiential pet care concept.
In 2016, PetSmart launched a high-end luxury concept called PetSmart Pet Spa in Oceanside, NY, and a second in Franklin Township, NJ the following year. It has not announced any further expansion of the store concept. PetSmart has also upped its main-line offerings with options like same-day delivery of products in some major metropolitan areas.
PetSmart has also made big online moves recently as well, acquiring popular online pet products retailer Chewy.com last year.
Petco, which was purchased by CVC Partners and Canada Pension Plan Investment Board in 2015, has also been working to beef up its omnichannel offerings. In 2017, the company acquired PupBox, a subscription service once featured on the television program, Shark Tank.
Whether Petco, PetSmart or both end up providing the ultimate pet store experience, there appears to be plenty of demand for services that allow pet owners to spoil their furry friends. A survey earlier this year indicated that 72 percent of Millennials own pets and 67 percent of those consider their pets to be their “fur-babies.” This quasi-parental bond is reflected in their spending — dog owners shell out $1,285 per year and cat owners $915, according to the study.
- Petco tries to ‘Amazon-proof’ its business with a new store – CNBC
- Will PetSmart’s luxurious pet spa concept catch on? – RetailWire
- Will Chewy.com help PetSmart gobble up the online market? – RetailWire
- Petco Acquires Shark Tank-Featured Pet Subscription Service Company, PupBox – Petco/PRNewswire
- Millennials spend like crazy on their ‘fur-babies’ – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: What will determine whether Petco’s new concept is a success? Will more experiential concepts like those being piloted by Petco and PetSmart be essential to physical pet supply business in the U.S.?
Poll
BrainTrust
Lyle Bunn (Ph.D. Hon)
Strategy Architect – Digital Place-based Media
Lauren Goldberg
Principal, LSG Marketing Solutions
Creating new and interesting in-store experiences is becoming key across all categories and the pet category is no different. The market opportunity appears large and substantially untapped, so I think Petco is placing a smart bet, but ultimately the success of the concept will be measured by consumer acceptance.
Beyond children, nothing is more precious than the family pet. This translates into customers who are looking for more than pet food at a cheap price. Petco’s concept not only taps into differentiated services, it provides a social experience for both pets and owners. Retailers must extend and evolve the store experience to remain relevant. Petco and PetSmart are focusing beyond selling products and developing experiences that build customer relationships. Innovation for future survival in an Amazonian world must begin now.
The success of creating a different experience for the pet lovers should be demonstrated, not necessarily in huge profits from this model, but by Petco’s ability to leverage that customer experience into increasing its bread-and-butter business. “Love my pet? I love you!”
I like the idea of PetCoach, and there is an opportunity for success. However, when we use the word “experiential” one has to ask, but how can I have a good experience when I am in a store that ignores me? I have walked through many Petco stores and there have been numerous times when I can go in and out without so much as a nod or a smile from an associate. Often today I see store leaders creating great concepts and PetCoach is another one of them, but without the support of well-trained and engaging staff, the likelihood of the idea achieving its goals are very slim. I’m all for new concepts, new technology and new strategies but all would work best when investing in staff and training. Then with well-trained employees watch as the new ideas take off with great accomplishments!
Pet retailers have to be a part of addressing the biggest challenges of pet ownership or they relegate themselves to being just shelves with checkout. Pets’ physical and social health, the need for care when apart from owners and grooming, are necessities that offer revenues and establish a triangle of the owner, pet store and vet around the pet. The more the pet store can enable the pet and owner quality of life, the greater success of the retailer. This is a 24-hour super store experience waiting to happen.
First, comparing Petco’s experiential trial to PetSmart’s stalled foray is somewhat meaningless. PetSmart is drowning in debt and may not have the wherewithal to try new store formats.
This concept supports the “retail as a destination” premise where buying product is only one aspect of the consumer/ store relationship. I think this is a very easy category to make inroads into that approach because people want to lavish attention on their pets and are open to add-on services. It will be appearing in many other categories in the coming years as fulfillment moves away from physical retail, especially for CPG or recurring purchases and the retail experience is transformed beyond warehousing inventory. Hello department stores, hello(?).
Pets have moved from being something “owned” to something loved. Some of the most successful pet retailers that I know doing this sort of thing, have their ear to the ground and incorporate customer feedback very quickly.
For Petco to be successful, they’re going to have to move quickly and adopt quickly. If you’re going to jump into a highly competitive, competent space like boutique pet care, you’ll have to play with the big dogs (pun intended).
Pets are family in every sense of the word. And in this case taking care of family is a lot more complicated than having a bag of food delivered every month. I love this — a “Genius Bar” for pet owners.
I love this concept as it makes Petco a destination and differentiates from what you can buy online. Pets are truly “fur babies” in many households and consumers are willing to pay for top-notch products and services. However, with all “experiential” concepts, the success lies in the execution. I’m hoping they truly invest in their staffing and training model to ensure a great customer experience.
At the end of the day you can buy things for pets online, but a lot of pet care is service-based — vet visits, grooming, training, etc. Therefore as Petco has identified, there is a real opportunity for brick-and-mortar spaces to capitalize on services and experiences over selling. I think success comes down to the quality of their service. People love their pets — they’re not going to trust their care to just anyone. They want assurances of proper, professional, high-quality services. This is where these companies need to be putting their focus.
Pet retailers like PetSmart have gotten it right from the get-go. They allow me to bring my dog into the store and pick out toys. They have grooming and doggie daycare right in the store. This concept has already proven itself so other pet retailers who follow suit are moving in the right direction. For my 2 cents.
The pet industry is both a huge opportunity and largely untapped. Studies have shown people are willing to shell out on their fur babies and given the trust Petco has built in the market, I think this will do well.
The key to success for PetCoach is loyalty. Shoppers are creatures of habit, as they have routine shopping patterns for reoccurring purchases. The first hurdle is to get consumers to try the new store concept and then to earn their loyalty. The membership approach has proven to be successful for many retailers and offering “valuable” perks will help drive membership and loyalty.
Looking forward to your store of the future is a smart strategy — much better than following the leader or simply trying to catch up with consumer expectations. Testing new concepts, measuring results and refining operations is essential to stay ahead of the curve. Innovation is a retail imperative.
Experiential marketing is here to stay. In New York, a stroll in Soho will net you multiple eCommerce and Direct to Consumer brands testing new storefront concepts. Many are using the “showrooms” as a halo and branding experience due to lower rents from established retail shrinking the commercial real estate market. For Petco, this has to be a learning experience to collect consumer feedback and iterate fast.
I like the idea of PetCoach, but I’d like to add actual per-owner coaching to the services. New pet owners, especially those who adopt strays, could use the help to keep the pets and the owners healthy and happy. It can be really stressful to add a puppy, mix cats and dogs, and figure out all the behavior training. Not everyone can afford DIFM doggy camps these days!