The primary goal of any retailer is to sell stuff, right? Well, not according to Peter Pritchard, the animal-loving CEO of Pets at Home. Pritchard, appointed to the store’s top job in 2018, has turned around the ailing pet-care company, which had seen its share price slashed by 70% in two years, ruffling industry feathers and taking it to the brink of failure.
So, if retailers’ raison d’être isn’t to sell stuff, then what exactly is it? According to Pritchard, -speaking this week at The Retail Bulletin’s Omnichannel Futures Conference 2020 – the time for high street stores simply shifting SKUs is over. There will always be someone able to do it faster, cheaper and more conveniently online. Of course, it took a while for the penny to drop at Pets at Home.
“We were essentially in denial as a company,” says Pritchard. “First we thought ‘we’ll be okay tomorrow’ then we thought, ‘we just need to sell more stuff’ but we were just being undercut by Amazon. Then we just thought it was all unfair!” The torrid trading period for Pets at Home ended with flying fur and the fourth CEO appointed in five years.
Experiential retail – it’s the cat’s whiskers
The road to Damascus moment of revelation came for Pritchard when he asked the philosophical question: why does Pets at Home exist? “The answer wasn’t just to sell stuff, it was and still is to make pet care rewarding, enjoyable and convenient for our customers,” says Pritchard. “Pet owners make a hugely emotional investment when they buy a pet and our role is to facilitate that relationship in the best way we can. Up until that point we thought we had customer focus, but we simply didn’t.”
And when you consider Pets at Home’s business model and the level of knowledge and expertise held within the organisation it is immediately clear where the company’s unique value proposition lies. For example, 40% of its lines are own brand, developed using in-house expertise and knowledge.
As Pritchard started to realign the company strategy to focus on pet care, key retail metrics began to improve, especially the frequency of store visits and average basket value. “We didn’t need a single new customer,” says Pritchard “we just needed to address what our existing customers really wanted and needed.”
Having discovered what it hopes is the key to success, Pets at Home is now doubling down on experiences over stuff, transforming its stores. Its new Stockport branch, for example, features a ‘groom room’ where customers can wash their own pets, a ‘selfie spot’ kiosk, a dog food deli, ‘Vets 4 Pets’ and an RSPCA ‘Cat Adoption Lounge’ to name but a few. The company’s goal is now to generate 50% of its revenue from pet care services.
Data is not just for Christmas
As with many tales of high street renaissance, digital has had a significant role to play. Before Pritchard’s turn at the helm, Pets at Home outsourced data management, but that soon changed, and the company’s chief data officer now has a seat at the board table. Pritchard says: “If you shop with Amazon, there’s a good chance they know if you have a dog, for example, and they’ll do their best to sell you dog food. If you’re a pet owner and shop with us we’ll know your dog’s name, its birthday, its favourite food, its weight, its monthly worming and flea routine and whether you use a kennel or cattery. Ours is a much more granular insight and that leads to a much more insightful and profitable customer-focused relationship.”
Pritchard’s advice for other high-street retailers faced with a terminal decline in sales of ‘stuff’? “Don’t be afraid to gamble. In fact, place thousands of bets, find the winners and then double down fast.”
Peter Pritchard, Pets at Home CEO, was speaking at The Retail Bulletin’s Omnichannel Futures Conference 2020.