Retail

How PetSmart Shampoos Its Way Around Amazon


Jeff Bezos is not interested in shampooing dogs—at least not yet.

That, in a nutshell, is why PetSmart (PETM) has continued to fetch sizable returns despite pressure from Amazon’s Wag.com. The e-commerce giant’s pet store is well into its third year of business, with no shortage of treats and toys on offer. And those consumers regularly tasked with laying in a 31-pound bag of dog food probably appreciate Amazon’s “free” delivery service more than most.

But Wag still isn’t washing animals or training them or helping them find homes. PetSmart, meanwhile, is a “retailer of services and solutions for the lifetime needs of pets.” Notice the word “products” is missing from that description.

PetSmart sales from grooming, training, boarding and other services increased 5.4 percent in the recent quarter to almost $195 million—roughly 11.5 percent of all revenue. The segment handily outpaced the company’s sales of pet food and hard goods like leashes, beds, and chew-toys. “That continues to be a very sticky part of our business that we think is a key differentiator,” PetSmart CEO David Lenhart said on a conference call today. “You’re going to see us continue to invest and focus on it.”

In the next few weeks, dogs that go through a PetSmart salon can get a “sugar-cookie cologne spritz” as part of its “Bret Michaels Top Dog” package. It’s unclear whether the former Poison front-man (and German Shepherd lover) actually washes the animals, but the offer definitely includes a festive bandana. In PetSmart’s version of holiday a shopping blitz, meanwhile, animals staying at one of its 196 boarding facilities will be given turkey for dinner.

And PetSmart continues to court would be pet owners. The chain has smartly become a major host of pet-adoption events, helping more than 5 million animals find homes in the past decade. The events are held by PetSmart’s nonprofit group, but new owners conveniently pick up their pets inside stores that are very much for-profit.

Kyle-stock-190
Stock is an associate editor for Businessweek.com. Twitter: @kylestock

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Companies Mentioned

  • PETM
    (PetSmart Inc)
    • $78.7 USD
    • 0.57
    • 0.72%
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