You can now zoom your veterinarian with your pet on your laps. Asking the patient what is wrong will be a long and interesting process.
Who is Chewy?
Launched in 2011, Chewy is an online shop dedicated to pets and their owners. They offer everything for you to take care of your animals, such as food, treats, toys, medications and all sorts of gadget to make pet owners crazier than they already are – no offense, but we all know this person who’s passion for his animal has become obsessive and mildly annoying.
Chewy has products for dogs, cats, fishes, birds, small pets, reptiles and even horses. They have over 2’000 brands for a total of 45’000 items to satisfy all of the pet’s – and owner’s – needs. Their goal is to become the leading provider for pet supply, advancing the thesis that one should take care of his pets the same way he treats his family.
Through their Autoship membership, clients can get the basics to satisfy theirs pets needs such as food and other supplies delivered to their door on a regular, predictable basis, which lets Chewy be more competitive on prices. No more forgetting about Simba’s treats, they will be on your door every first of the month. This service has been doing really well so far, as it drives 70% of the company revenue.
The last thing they offer is superior customer service. Available 24/7, they promise an answer within 5 seconds. People tried. It’s true. They answer very quick. To add to their rapidity, they also offer a 1 or max 2-day delivery. Hey, it’s not Postmates but it’s still quite fast.
Zoom with your pet
In addition to all of these services, Chewy recently announced the launch of their new telehealth program called “Connect with a Vet”. The aim of the service is to keep pet care possible, despite the pandemic and the fear of getting contaminated. The services helps both veterinarians and pet owners.
Bear in mind, veterinarians are only here to answer basic questions and minor worries: they do not diagnose complex medical conditions and are not allowed to provide treatments and medications. The goal is more to treat simpler problems as for example, what you should do if you cut your dog’s nails too short or what you should do if your cat steps on a stove. Additionally, the service is free for Autoship program members. Today, the service is only for cats and dogs and during regular working hours, but they also plan it to extend it to 24/7 and other animals – otherwise, what are you going to do with your parrot’s depression?
“We are always looking to enhance our customers’ experience. Visiting a local vet continues to be a challenge for many pet parents during this time. Similarly, the vet community has also been impacted via clinic shutdowns or reduced clinic hours. So, we thought, why not come up with a solution that can help both communities, our customers and veterinarians, in this time of greatest need," said Sumit Singh, CEO of Chewy.
A service fitting the trend, enough for long term success?
It seems that the company’s offer comes at the right time. They had the video consultation planned for a while now, but they accelerated development with COVID-19. And rightly so. Indeed, the world is seeing new records of pet adoption, as many people just want some warmness and fuzziness on a daily basis: many are now working from home and have more time to take care of fluffy balls.
In the UK, one French bulldog received no less than 1’000 adoption request – the picture was super cute, I have to say. “In May we saw applications for each dog on our website leap by 515 per cent year on year, and demand has stayed strong since then,” said Alyson Jones, Head of Rehoming Services at the UK national pet charity Blue Cross. This is worrisome as animal care experts fear that people do not realize they won’t be working from home forever, an oversight that might be very hurtful for animal welfare in the coming years – but that’s another subject.
Telemedicine has also become very trendy and is an option which more and more people choose. Europe has seen success examples such as Doctolib', and the US have Teladoc, who tripled its visits last quarter to 2.8 million.
Although they fit the trend, the company should still be careful not to be bypassed by Amazon and its outstanding operations. So far, they capitalized on a wide variety of choice and competitive price, but that may not be enough. Telehealth is yet another argument for customers to stay subscribed to the Autoship program, but they could also think of additional offers such as pet insurance. Only by becoming the “all you need for your pet” place will they be able to stay competitive in the long run.
And the name: Autoship? To steal a joke from the Robinhood podcasts, it looks like the name of a boring FedEx internship. Some rebranding would not hurt.
Going forward
The stock went surged from $30 a year ago to almost $75, before settling down at $60 at the time of writing. The pet and food supply market was around $57 billion last year and is expected to grow 5% per year (with all these little cute animals getting adopted, it has to). Experts at the Motley Fool argue that the company is doing well, although the stock is a little overpriced at the moment. We still need to see the impact of tele-health and whether or not Chewy managed to keep or grow its market share facing other e-commerce giants.
Sources:
“The Barking Bundle” — Chewy’s tele-vets. Amazon wins Techageddon. The final pre-election GDP report, in Robinhood Snacks Podcasts
Chewy's press release on "Connect with a Vet"
Is Chewy Stock a Buy?, in the Motley Fool
Chewy launches virtual vet visits as pandemic fuels pet boom, in CNBC
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