Need to Know
- Direct-to-consumer pet retailer Chewy is experiencing a record high quarter, with a 37% increase in active customers.
- In 2020’s second quarter, Chewy raked in net sales of almost $1.7 billion. The retailer also added 4.6 million net-new customers.
- Demand for pet supplies amid the COVID-19 pandemic rings strong across the industry, with online sales surging 77% across the category.
- PetSmart acquired Chewy in 2017 for $3 billion.
Pet supply e-retailer Chewy is celebrating a record high quarter in customer acquisition. Chewy ended 2020’s second quarter with a year-over-year increase in active customers of 37.9%—an increase of 4.6 million.
And the huge quarter resulted in total net sales that grew to $1.69 billion — up almost 50% from last year.
As most e-commerce brands have experienced since the onset of the COVID-19 pandemic, the pet supply retailer experienced a boost in sales, due to more customers opting to shop online for their pet supplies rather than visiting a store in-person. Additionally, throughout the pandemic, many people have chosen to become a pet owner or pet foster parent for the first time.
As such, customer acquisition rates have increased and those customers have been able to enjoy Chewy’s improved perks, like pet medications, an increased offering of private-label goods, and gift cards.
Says Chewy CEO, Sumit Singh, “We continue to see elevated engagement, elevated demand patterns, [and] organic traffic to the website is up on a year-over-year basis.”
“The category is definitely recession resilient.”
And the data proves it. Nielsen data shows that pet food and supplies sales rose 26% in stores and 77% online at the height of the pandemic in March.
Chewy competitor Petco is experiencing a surge in share prices (as opposed to Chewy, whose shares have dropped in value), and may be going public in 2021, with a value of close to $6 billion. Chewy itself went public last year, raising more than $1 billion.
Meanwhile, another top pet supply retailer (which acquired Chewy in 2017), PetSmart has inked a deal with DoorDash, meaning the pet store can now offer same-day delivery. Starting September 20th, shoppers can place their same-day delivery orders for free.
Pandemic aside, it seems pet supplies are an essential service, much like groceries or other household items — and pet parents are unlikely to forget about their pets, especially during a global crisis.
“If you leave data aside and ask us as practitioners in the space, we are seeing higher engagement from pet parents,” said Singh. “People are home. They want to buy more toys. They want to buy more treats. The pets are getting fed more. In fact yesterday I was talking to somebody who was like, ‘My pet has gained 10 pounds.’ And the stories are true.”