The Big Story
Three Reasons Why We Like PetSmart’s Chewy.com Acquisition
PetSmart announced last week that it is buying Chewy.com, an online retailer of over 30,000 pet related products. According to Recode.net, the purchase price is $3.35 billion, making it the largest e-commerce acquisition ever. That statistic may be eye-popping enough to make you sit up, roll over, and play dead, but it makes sense to us for three reasons.
First, Chewy.com is very successful. Non-pet owners might not be familiar with the website, but it has grown to become the online leader in pet foot and litter sales in a relatively short period of time. The company, which was founded in 2011, achieved sales of $900 million in 2016, and projected to reach over $1.5 billion this year. According to 1010Data.com, Chewy commands 57% of online pet food and littler sales, ahead of Amazon’s 33% and PetSmart’s 2%. An emphasis on customer service and love of pets has helped Chewy.com to distinguish itself from competitors and bond with its customers. The website’s customer service agents are available 24 hours a day via phone and text, and sent handwritten holiday greeting cards to 2 million customers last year. The company keeps profiles of each customer and their pets, and enters newly registered customers into a drawing for a free oil painting of their pet – 700 paintings are awarded and delivered per week, according to Bloomberg.