Customers have numerous options to choose from and may easily switch to a different service if necessary, despite the fact that pet owners are actively involved in the decision-making process about their four-legged family members. The number of pet care subscription services is continuously expanding. Converting fickle customers who have a variety of alternatives into dedicated subscribers is the difficulty that pet care firms face over the long run.
The average American pet owner will spend $13,320 on their cats or dogs over the course of ten years. This amounts to around $111 each month, which is what they will pay to ensure that their pets are nourished, healthy, and happy. Companies that provide recurring deliveries of food and toys, prescription medication, telehealth appointments with on-call veterinarians, and even GPS tracking services in case Milo or Fido wanders off have a significant opportunity to capitalize on the consistent spending that pet parents do on their fur babies.
In order to raise their portion of the customer’s wallet, successful subscription companies often pull on three different levers. They offer great value through their price, the convenience of one-stop shopping and delivery, and they work hard to promote deeper engagement with the brand through tailored experiences. Chewy, a relatively new eCommerce retailer, has quickly risen to the top of the pet care subscription industry by masterfully using all three of these levers.
Chewy has developed a name for itself as a one-stop online shopping destination for bulk orders of pet foods, toys, prescription medication, and other supplies. This is in comparison to traditional retail chains such as Petco and PetSmart, which are both well-known in the industry. The “Autoship” subscription service is the cornerstone of Chewy’s business model. This service provides subscribers with unique subscriber discounts of up to 35 percent or $20 on their first order; following orders feature savings of 5 percent on “chosen brands.”
In addition, customers can place orders for a single item. On the other hand, it appears that the special subscriber discounts have motivated many people to test out Chewy’s Autoship subscription. As of August 2021, Chewy’s Autoship clients accounted for 70 percent of the company’s net sales, which is an increase from the previous year’s figure of 68 percent. The revenue earned from Autoship clients alone increased from 1.1 billion dollars during the second quarter of 2020 to more than 1.5 billion dollars during the second quarter of 2021, a growth rate of over 50 percent.
Chewy’s exclusive focus on e-commerce has allowed it to outpace its brick-and-mortar competitors Petco and PetSmart as it gnaws away at competitors’ relative market share for online sales, according to a report by Cardify.ai. During the pandemic, many major pet retailers have seen an increase in online sales. However, Chewy has been able to outpace its competitors because of its exclusive focus on e-commerce. Because of this, Chewy is now in a position to compete directly with even retail goliaths like Amazon and Walmart when it comes to online sales:
According to the report titled “U.S. Pet Market Outlook 2021-2022,” online sales of pet items reached 30 percent of total sales in the year 2020, with Amazon holding the overall lead in terms of online market share of pet products with a percentage of 59 percent.
Chewy comes in second place behind Amazon in terms of online market share, holding 41 percent of the market. Following Chewy is Walmart, with a market share of 33 percent, followed by Petco.com and PetSmart.com.
However, Chewy’s success as an online leader among pure-play pet care providers is not exclusively attributable to the discounts that are offered through its subscription programs. Clients can save almost the same amount of money through subscription plans offered by Petco and PetSmart. Amazon and Walmart both offer their own subscription programs and can save customers money in their own unique ways.
Chewy has found ways to wrap its subscription model in a personalized package with a delightful bow of stellar customer service designed specifically to make customers feel like family. This is in addition to the fact that the company offers competitive prices and provides a convenient shopping experience.
There is a wealth of anecdotes available online concerning the exceptional quality of Chewy’s customer service. More than one thousand free oil paintings of cats, dogs, and other animals are sent out by the company each week to customers who have uploaded images of their own pets to their Chewy accounts. The paintings come in a variety of sizes and styles. Customer care representatives who are on call around the clock have the authority to place orders for flower deliveries. These orders might be placed to honor a customer’s upcoming wedding or to pay tribute to a cherished pet who has passed away. All of this ultimately results in customers having a more in-depth and individualistic relationship with the Chewy brand.
While many businesses make their veterinarian telemedicine services available for a fee, Chewy provides its Autoship subscribers with the opportunity to participate in free online chats or video consultations through its “Connect with a Vet” program. It’s just one more way that Chewy makes its membership package more worthwhile for customers.
To be successful as businesses over the long term, subscription services require high levels of customer satisfaction and brand loyalty. This is accomplished by reinforcing client habits such as the payment of recurring fees or the continued delivery of monthly packages on an ongoing basis. Brands have the ability to turn customers into reliable, loyal subscribers for many years to come by ensuring that customers remain consistently engaged and thrilled with their subscription experience.
- The Key Point(s)
To encourage customers to sign up for subscriptions, firms that provide services for pets offer customers a wide range of bonuses and freebies. However, in a market where competitors can easily learn new strategies from one another’s subscription models, it is unlikely that any one particular subscription perk will provide a competitive advantage.
Instead, what differentiates the leaders from the rest of the pack is an all-encompassing strategy for producing a memorable experience for customers centered on their subscription packages.
Many of the packages that are offered in the industry of pet care subscription are based on the value proposition of gaining access to a variety of products and services, in addition to the convenience of home delivery.
In a market that is highly competitive and loaded with competitors, a subscription service that competes only on the basis of how convenient and affordable it is to use is always at risk of being undercut, especially if customers can quickly switch from one service to another.
Customers can be converted into brand advocates on social media if they are provided with personalized customer experiences and the business places a strong emphasis on ensuring their complete pleasure.
Long term, it is in the best interest of businesses to maintain high levels of customer happiness and brand loyalty, as this will both encourage repeat, habit-forming use of their subscription services.