Exceeding Shoppers’ Connected Retail Expectations 

Produced by CI&T

CI&T’s Director of Retail Strategy, Melissa Minkow hosted Petco’s Chief Administrative Officer, John Zavada, in this session covering the buzziest topics from CI&T’s annual Connected Retail Report. The consumer insights portion of the discussion focused on the fact that intra-pandemic shoppers are nuanced along their paths to purchase and are particular about the types of omnichannel retail experiences they want. For example, most consumers report apps as their digital channel of choice, but the majority are using those apps solely while at home. Social media is also important for consumers, with 65% using it to browse items before considering buying them. However, only 19% of consumers have shopped in the metaverse, and 45% do not see themselves ever shopping there. When it comes to personalization, consumers want retailers to show them the closest store based on their location, offer discounts on products they regularly buy, and suggest products based on their previous purchases. 59% of respondents said they are excited by the idea of a retailer using their preferences and shopping history to personalize the shopping experience, but the ways they want to see retailers personalizing digital channels are less adventurous and more tactical.

In the Q&A portion of the chat, John deep-dove the details of Petco’s highly personalized app experience and the omnichannel ecosystem Petco has created so that pet parents can access the brand in the most convenient, yet emotionally engaging ways possible. Offering an expansive array of pet health services, in addition to tailoring channels to the user have been paramount in driving loyalty.

Following are the take away points from the conversation with John Zavada, Chief Administrative Officer PETCO:

  • The pet industry is changing, and pet owners are becoming more focused on pet nutrition and wellness. The industry is shifting towards humanization and premiumization.

  • Pet owners feel connected to their pets like family members but are not always equipped to provide the best care. They want a one-stop-shop experience for pet care and products. This presents an opportunity for the company to help bridge the gap and assist pet parents in caring for their pets.

  • Petco's ecosystem platform offers various goods and services critical to pet care, including veterinary services, grooming, training, and insurance partnerships.

  • The company's focus is on providing a total pet care experience to serve customers in the best way possible. This has required a huge transformation and transition to build capabilities that cross channels and provide a seamless experience for customers. Examples: booking experience for services that crosses channels and digital and in-store experiences.

  • The company has implemented same-day delivery in all of their major markets, which has been a huge success for them, particularly for fresh and frozen food. The same-day delivery capability allows them to cost-effectively and efficiently deliver premium pet care products to their customers.

  • App is a key platform for personalization and care reminders: The app is the fastest growing platform within the pet parent ecosystem. It [App] travels with the pet parent, making it critically important for digital purchases and personalization.
    • The app unlocks personalization, specifically through care reminders and notifications. Over 8 million notifications were sent last year to remind pet parents of important care tasks. Pet care involves many unique tasks, such as vaccination reminders, that are important to remember for grooming appointments and pet boarding. The app helps ensure that care reminders are front and center, and top of mind, for caring for pets.

    • Pet-specific profiles have been created in the app and have gamification features to encourage engagement. The more information added to a pet's profile, the richer and more relevant notifications Petco can provide.

    • Customers who create pet profiles have higher conversion rates and engage more with the app.

    • Pet profiles are a key aspect of Petco's strategy and they plan to continue adding more features and functionality to the app.

    • Petco has found that its highest value customers are those who are highly engaged with its app. Membership services, specifically Vital Care, are a key aspect of the app and its value to customers.
  • Millennials and Gen Z's are some of the most engaged in adopting new pets and are a top tier customer segment for premiumization. Customers in this segment are focused on what's next and what's needed in the premium area, and this extends beyond just products to experiences as well.

  • Premiumization goes beyond just products, it also includes experiences. The company has stores with full-blown kitchens where customers can see the food being made, and some customers are passionate about that experience. Customers will come to the store to get the most current product.

  • The company is targeting the millennial and Gen Z customers who are highly engaged in adopting new pets. This segment loves Petco's lifestyle products (such as collars, leads, apparel, and beds,). There is a continued value stream in catering to this segment of customers.

  • Data Analysis: Developing a new product line based on customer data and understanding of their needs in the outdoor lifestyle segment. Example: Petco partnered with Backcountry to launch a new product line, which includes products such as rugged crates for pets to use while camping. The product line has been successful, with the narrator personally purchasing and using the products.

  • Future direction: Focus on sustainability.

  • Understanding the customer journey and providing personalized recommendations is important to ensure customer satisfaction and conversion. Customer journeys in the pet industry involve a mix of core consumable products and discretionary products. The "Welcome to the family" customer journey is important as it involves immediate needs such as feeding and quickly transitions into other supplies and entertainment.

  • The world of vet care is a data-rich area for Precision Marketing, and the company uses this data to provide the best pet care across all of its vet hospitals.

FEB 2023