It might become a norm to go see a vet at Walmart. You might be soon taking Fido to his grooming appointments to Walmart. The retailer is taking steps towards that this year with zest and hopes to establish itself in the pet care market in the near future. Walmart is also working on stocking on more organic and natural per food brands. The expansion will be complete with online pet pharmacy and 79 new vet clinics at various metro locations.
Are there online pet-care providers currently?
Pet products are often heavy and due to that people are turning towards delivery more and more often. Amazon has been booming when it comes to bulky pet food subscription and delivery. Walmart has been investing in online grocery ordering, so they are definitely looking for ways to get some profit out of it and pet food fits the bill. Current free 2-day shipping with $35 order minimum is very attractive to pet owners who don’t feel like going to the store to do heavy lifting.
Another reason for expanding pet services is a global shift to e-commerce that results in emptier store shelves. Rather than having empty areas, the retailer plans to devote some space to veterinary clinics. Best of all – these services can’t be outsourced online. CVS and Walgreens are taking the same route with developing small clinics at their physical locations, but for people.
Can pet care market be profitable?
No matter the economic conditions and political developments, people will always have and love pets. In fact, during tough times we tend to have even more need for unconditional love from our dogs, cats, hamsters, and birds. There will always be a need for pet care places and pet food. Current pet industry is estimated at over $70 billion per year and rising. The staggering growth outpaces broad economic growth with 5.5% compound annual expansion. The industry spending doubled since 2005 with no signs of slowing down. So yes, pet care market can be luxurious.
According to some studies, millennials spend close to $1,300 on their dogs and just under a $1,000 on cats each year. As this generation ages, the spending is expected to increase.
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What are Walmart’s plans?
- WalmartPetRx.com
This is Walmart’s first online pet pharmacy. It will carry over 300 brands of low-cost medication for a wide range of issues and conditions. All the products will be shipped for free via 2-day shipping on orders over $35. Physical Walmart pharmacies will receive extra 30 most popular medications to have in-stock for emergency needs.
- Organic selection
Organic trend has definitely reached pet industry with more and more owners wanting to feed their pets pure and natural food with no additives and harmful chemicals. Blue Buffalo was acquired by General Mills for $8 billion mostly as a result of this natural foods expansion.
Walmart recognizes this country-wide healthy pattern very well and is adding new brands of pet food to its shelves, including Blue Buffalo, Greenies, and Hill’s Science Diet. In addition to over a 100 new brands, the retailer is developing in-house brand food with similar ingredients, but lower cost.
- Vet clinics
Walmart is investing significant funds into physical veterinary clinics. The current number is just 21 such clinics in 6 states, but there are plans for a total of a 100 new within this year. After all, about 70% of Americans have pets and over 90% of population lives less than 10 miles from a Walmart store. This is about 200 million of people that can become potential customers and save 40-60% on pet care. Cheaper vaccines, exams, and minor issues are the biggest part of pet expenses, so it is safe to assume that most people would love some serious savings there.
How does new Walmart pet care strategy going to affect competitors?
The news comes as a disappointment to many independent veterinary clinics, pet retailers like PetCo and PetSmart, and even online giants like Chewy.com and PetMed Express.
Walmart has the size, the name, and the developed infrastructure, making it very hard to fight against. Walmart will win in price, convenience, and accessibility departments just because of all the physical store locations and a huge customer base.
Another reason for crushing the competition is the fact that virtually every company would be happy to get their products on Walmart shelves and expose them to millions of new customers. A relatively new natural food producer, Greenies, would be a good example of a business with great desire to enter Walmart’s 5,000 stores.
Even Amazon is feeling the heat because Walmart has what it takes to win – a huge number of physical stores, e-commerce capabilities, and economies of scale. This lethal combination can deliver a great mix of goods and services, leaving even the most powerful competitors behind and investors doing a happy dance.