Shoppers tightening funds on non-essential buys; Chewy prioritizes healthcare offerings
Rewritten Article
Pet Health: Chewy's Next Big Play
New York City - Chewy's future is rooted in healthcare, particularly animal health. That much is clear, according to CEO Sumit Singh, during a recent talk at the National Retail Federation's annual event.
Singh sees veterinary health as a $40 billion market opportunity, which is growing much faster than pet food, supplies, or pet retail itself. Last month, Chewy announced the launch of its first veterinary clinic, Chewy Vet Care, setting the stage for a nationwide expansion of vet practices in 2024. These clinics are set to offer a variety of services, including surgery, urgent care, and regular appointments. Chewy is harnessing the power of its open platform for these vet clinics, making them available not only for Chewy Vet Care but also for third-party partner practices.
According to Singh, the demand for veterinarians will exceed the available supply over the next five to seven years. Chewy aims to bridge this gap by using technology, excellent retail principles, and customer-focused service. The company plans to alleviate common pain points associated with traditional vet visits, such as difficulty in scheduling appointments outside of regular hours or on holidays.
Chewy Vet Care clinics aim to improve upon the less desirable aspects of traditional vet clinics, such as their sterile appearance and strong odors, emphasizing a more pet-friendly atmosphere. "Pets immediately recognize that," Singh pointed out.
Chewy's healthcare moves don't stop at vet clinics. The retailer has also introduced Connect with a Vet, a telehealth service, and Practice Hub, a marketplace exclusively for veterinarians.
The humanization of pets is driving increased demand for health and wellness offerings, according to Singh. "We would sacrifice our health sometimes for the needs of our pet," he explained.
Healthcare has become a focus for other pet retailers as well. In 2020, Petco rebranded itself as a health and wellness company, offering better food choices, rolling out pet hospitals, and launching Vital Care, a membership program. Concurrently, PetSmart introduced an online pharmacy for pet medications in 2021.
Even amid economic uncertainty, the pet category, particularly pet health, remains relatively strong, with pet parents showing resilience in their spending habits.
Recently, Chewy reported a 8.2% increase in net sales for the third quarter of 2022, reaching $2.7 billion. However, the company shifted from a profit to a net loss of $35.8 million and an operating loss of $10.2 million. With the introduction of more health and wellness offerings like Chewy Vet Care, there could be an opportunity for new customers to enter Chewy's ecosystem.
"Pet parents are still very resilient, maintaining spending robustly on pet health," Singh affirmed. "We've remained fairly resilient ourselves."
Insights from Enrichment:
- Chewy's focus on veterinary healthcare is a strategic move to capitalize on the growing demand for pet healthcare services.
- Chewy's telehealth platform, Connect with a Vet, has been successful in providing online veterinary consultations.
- Chewy's digital and retail platforms are integrated to offer seamless pet care services, which could differentiate it from competitors.
- Chewy plans to expand its veterinary care services by opening more clinics, improving telehealth capabilities, and diversifying services to offer more specialized veterinary care.
- Chewy, already focusing on pet health, sees a $40 billion opportunity in the growing veterinary health market, aiming to bridge a gap between demand and supply for veterinarians using technology, retail principles, and customer-focused service.
- The company's first veterinary clinic, Chewy Vet Care, launched last month, offering various services through an open platform that includes third-party partner practices.
- Chewy Vet Care emphasizes a pet-friendly atmosphere, addressing common pain points of traditional vet clinics, such as difficulty in scheduling appointments and a sterile appearance.
- Apart from vet clinics, Chewy has introduced Connect with a Vet, a telehealth service, and Practice Hub, an exclusive marketplace for veterinarians, demonstrating their commitment to the pet health sector.
- The humanization of pets is driving increased demand for health and wellness offerings, and Chewy aims to capitalize on this trend by expanding its veterinary care services, improving telehealth capabilities, and diversifying service offerings.
- Amid economic uncertainty, the pet category, particularly pet health, remains relatively strong, with pet parents consistently showing resilience in their spending habits, potentially drawing new customers into Chewy's ecosystem.
