Consumers Cut Back on Optional Expenses, with Chewy Prioritizing Healthcare Services
Rewritten Article:
Deeper Dive into Chewy's Expansion into Veterinary Healthcare
NEW YORK - Pet retailer Chewy is eyeing the healthcare sector as a key driver for future growth. According to Chewy CEO Sumit Singh, the animal health market is a potential goldmine, with a whopping $40 billion up for grabs.
"Animal health is the next frontier," Singh asserted during a discussion at the National Retail Federation's Big Show in New York. "It's growing much faster than pet food, supplies, or retail."
To get a piece of the action, Chewy announced plans to open its first veterinary clinic under the banner of Chewy Vet Care. The company expects to have numerous vet practices up and running by 2024, offering a variety of services, including surgery, urgent care, and routine appointments. This expansion is powered by Chewy's open platform, which can also accommodate third-party partner practices.
Singh believes the demand for veterinarians will soon outpace the available supply. He stated, "Over the next five to seven years, the demand for veterinarians is going to outweigh the relevant supply for veterinarians." Chewy aims to fill this gap by offering a tech-forward and customer-centric approach to veterinary care.
These vet practices are designed to alleviate common pain points associated with traditional vet visits, such as limited appointment hours or unavailability during holidays. Chewy also aims to create a more comfortable and welcoming atmosphere, addressing concerns about the typical sterile appearance and overpowering odors found in traditional vet clinics.
Chewy Vet Care clinics aren't the retailer's first venture into healthcare. Previously, they launched the telehealth service "Connect with a Vet" and the veterinarian-only marketplace Practice Hub. The humanization of pets is driving the demand for health and wellness offerings, according to Singh, who believes pet owners are often willing to prioritize their pets' health over their own.
Recent years have seen other pet retailers focusing on healthcare as well. For instance, Petco repositioned itself as a health and wellness company, offering better-for-you food choices, rolling out pet hospitals, and introducing Vital Care, its paid annual membership program. Meanwhile, PetSmart launched an online pharmacy for pet medications.
Despite economic uncertainties, the pet category, particularly pet health, remains relatively strong. In its most recent quarter, Chewy reported a 8.2% year-over-year increase in net sales, reaching $2.7 billion. However, the retailer swung to a net loss, with a loss of $35.8 million compared to a profit of $2.3 million in the previous year. The active customer base also decreased slightly by 1.3% to 20.3 million. The introduction of Chewy's new healthcare offerings could serve as a new entry point for potential customers to engage with the brand.
Sigth echoed this sentiment, stating, "From a caring-for-the-pet point of view, pet parents are still very resilient. They're spending robustly on pet health. We've remained fairly resilient."
Enrichment Data:
- Chewy Vet Care clinics are designed to be stress-free, personalized experiences for pets and their owners.
- These clinics offer a wide range of services, from routine wellness care to urgent care and surgeries.
- Chewy's telehealth platform, "Connect with a Vet," has reached over 1 million consultations.
- An online pet portal allows pet owners to access medical records, schedule appointments, and manage prescriptions digitally.
- Chewy aims to improve operational efficiency, explore opportunities in sustainability and digital innovation through expansion of its board of directors.
- Given the vast potential of the animal health market, valued at $40 billion, Chewy is diversifying its business into veterinary healthcare with the launch of Chewy Vet Care clinics.
- Chewy Vet Care clinics are aimed at offering a stress-free, personalized environment for pets and their owners, addressing common pain points in traditional vet visits.
- With plans to open numerous vet practices by 2024, Chewy's expansion includes services like surgery, urgent care, and routine appointments, all aimed at catering to the growing demand for veterinarians.
- Leveraging technology, Chewy Vet Care clinics aim to outdo traditional vet clinics by offering a tech-forward and customer-centric approach to veterinary care.
- Chewy's telehealth service, "Connect with a Vet," has surpassed 1 million consultations, demonstrating the demand for digital health offerings in the pet industry.
- Chewy's new healthcare ventures, including Chewy Vet Care clinics and telehealth services, could serve as potential entry points to engage new customers, even in the face of economic uncertainties.
- In the quest for innovation, Chewy is also looking to improve operational efficiency, explore opportunities in sustainability, and further digital innovation through the expansion of its board of directors.
