PetSmart Inc.is probing an expansion into in-home services, including dog walking, backyard clean-up and aquarium set-up, in an effort to help differentiate itself from mass retailers such as Wal-Mart Stores Inc.
PetSmart currently offers grooming, training and kenneling at many of its 1,137 stores.
"In-home services are a big opportunity, but we have a lot of work to do before we determine how to make that work," Robert Moran, who became the pet retailer's chief executive officer last month, recently told Bloomberg News. "It becomes a competitive advantage if we can break the code on how to provide that."
The challenge for PetSmart is how to deliver profitable, quality services, he said. Mr. Moran, chief operating officer since 2001, also plans to increase store-brand sales to as much as 30 percent of sales in the next five years from 17 percent currently, as well as further increase its emphasis in hard goods, which are about twice as profitable as food and another differentiator.
The moves come as Wal-Mart has been making a big push into the pet category. Besides upgrading the quality of pet products, Wal-Mart is repositioning pet food and supplies right in front of its other fast-growing business, such as baby products. David Strasser, an analyst at Janney Montgomery Scott, said Wal-Mart competes in about 20 percent of the items carried by PetSmart.
"We are concerned, as most of the overlap is in food and consumables, which is a traffic-driving category for PetSmart," Mr. Strasser said.
Conversely, any move by PetSmart into at-home services would put pressure on the many mom & pops currently supplying those services.
Jill Tuesday, owner of No Furry Worries in Huntington Beach, Calif., told the Orange County Register that customers may trust these services from an established firm. In particular, they'd likely have better procedures in place in case something goes wrong than some entrepreneurs. But she said the work isn't easy.
"I would really question the training of the people they would hire," Ms. Tuesday said. "You can’t just hire a bunch of kids and then expect people to let them into their homes."
Discussion Questions: What do you think of PetSmart's potential move into at-home pet services? What are the challenges in such as move? Will it help differentiate the chain from retailers like Wal-Mart?