"Business Wire" reported on May 31, 2023 that the latest market value of pet brand Chewy was US$14.3 billion, with gross profit margin increasing by 90 basis points year-on-year, and achieving more than 50% market share in the US pet e-commerce market .
Chewy is an emerging brand that covers all kinds of pet products and pet medical care. The post-epidemic era has ushered in the peak of e-commerce and the pet industry . The convenience that e-commerce platforms provide consumers and the emotional care pets provide consumers will only grow with time. More and more are coming, and it is under this background that Chewy has seized the opportunity and actively innovated, becoming the largest pet supplies e-commerce company in the United States surpassing the Amazon platform.
This article mainly introduces Chewy’s innovative approach to products and marketing from three aspects, aiming to provide new ideas for niche vertical brands.
01 Combining warehousing logistics and subscription models to innovate, Chewy has a trace to defeat Amazon.
After going public in 2019, Chewy has increased investment in warehousing and logistics and is committed to building a complete and flexible supply chain system.
Chewy has achieved results that rival even Amazon in terms of user experience and supply chain efficiency. 9 logistics centers have been established in the United States to connect the warehousing and logistics of goods through the Internet. Through automation, the sorting cost and delivery efficiency have been greatly improved: consumers can have their orders delivered within two days after purchase, and each order exceeds US$49. Orders can be delivered to your door for free; in the United States, which has a dispersed population, Chewy's next-day delivery service can cover 80% of the U.S. population, which is considered a strong supply chain system. Therefore, due to the implementation of its self-built warehousing system and efficient distribution network, Chewy's sales have not only surpassed similar pet supplies e-commerce companies like Petco, but its own revenue has also achieved considerable growth.
After comparing the low delivery return rate of pet food with large volume and small unit price and the opposite high delivery return rate of pet products , it is not difficult to find that Chewy has slowly shifted its marketing focus to pet supplies, cat climbing frames and dog products in recent years. Products such as dog seat cushions gradually occupy the homepage of Chewy’s official website.
The optimization of warehousing and logistics is only the first step for Chewy to increase consumer stickiness. After improving consumer favorability through efficient order fulfillment, Chewy's friendly subscription model also ensures the brand's high absorption rate for consumers: Users You can get a 35% discount on products for your first purchase, and Chewy members can always get a 5-10% discount compared to ordinary consumers, and can also use the pet medical function for free; and Chewy’s pet medical project CarePlus is available through every The monthly pet medical plan of US$20 and the first free pet health fund of up to US$150 provide pet lovers with a full set of pet medical ecological services, greatly accelerating consumers' subscription decisions...
In addition to greatly improving user stickiness, the subscription model also makes product inventory and distribution forecasts more accurate . In this way, the complementarity of the supply chain and the subscription model has contributed to Chewy's rapid growth.
02 Comprehensive services and full social media coverage create the ultimate experience for young consumers
Pet brands target a caring consumer group, so the most important thing for such brands is to embody humanistic care . Putting consumer needs first and even exceeding consumer experience expectations is Chewy's main entry point.
First of all, Chewy provides consumers with 24/7 customer service response, and the customer service handles messages very quickly. Secondly, Chewy provides a series of personalized services, including online pet consultation, pet hand-painted portrait mailing, etc.; When it comes to providing consumers with unexpected care, Chewy never lacks creativity. It sends condolence flowers and letters to the owners of deceased pets. If consumers are not satisfied with their orders, they can refund them at any time and donate them to pet shelters... Since high-quality user experience is a constant issue for pet brands, Chewy has set an example for this.
As pet owners around the world become younger, Chewy's marketing focus is online. Chewy has official accounts on almost every major social media, and continues to conduct interesting online operations based on the tonality of different platforms to bring it closer to young people. The distance between consumers gradually occupies the authoritative position on pet topics: First of all, the blog column of Chewy independent station provides consumers with a community platform to share with each other. Both members and non-members can share interesting content such as pet cake making and pet knowledge; Facebook Paying attention to picture display, on Facebook, Chewy will update cute pet pictures every day with product links; on Youtube, Chewy will publish practical videos, such as dog training and pet moving; in order to fit the tone of TikTok, Chewy will The short videos uploaded on this platform are more life-like and interesting; on Reddit, Chery also posts cute pictures of pets in the form of pictures. It can be seen that Chewy has basically achieved full coverage of ** social media platforms **.
03 Multi-brand & multi-category "collection station" thinking helps Chewy increase its popularity
Chewy's product categories extend far beyond cat and dog food .
First of all, Chewy takes the lead in expanding the scope of pet categories and continuously introduces food and supplies suitable for birds, fish, reptiles, etc.; secondly, in terms of product projects, Chewy’s pet medical plan CarePlus combines pet health and pet medical care. Introducing pet e-commerce to activate a new pet e-commerce ecosystem; finally, Chewy also actively cooperates with different brands to launch more trendy and interesting products.
Chewy has also built the platform into a collection site for its own brands and cooperative brands , such as pet toy brand Frisco's launched in 2016, high-end cat and dog snack brands Tylee's and American Journey launched in 2017, and Vibeful launched this year focusing on pet health products. , cooperated with Disney to launch a number of co-branded pet toys... By independently controlling the production and supply chain of its own brands, it can flexibly formulate and adjust sales strategies and increase gross profit margins; it can further open up awareness and improve brand positioning by cooperating with well-known brands.
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Extended article :
1. Innovation Guide｜Ten Steps for Product Managers to Manage the Product Lifecycle
4. DTC Plan | How to use 5 new forms to reshape the post-epidemic physical store experience in 2023
5. Innovation Guide｜Chain operation starts with a single store profit model
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