Petco Debuts New Premium Pet Experience at its New York City Flagship
Earlier this month Petco opened its newest flagship location in New York City’s Union Square. The concept showcases the latest in Petco’s omnichannel capabilities alongside a full-service veterinary hospital, grooming salon, JustFoodForDogs kitchen, and its traditional pet retail assortment. The flagship serves as a destination for pet recreation and wellness that caters to the needs and preferences of pets and owners alike.
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Petco’s flagship design “humanizes” the traditional pet store experience, incorporating high-end finishes and amenities that are reminiscent of hair salons, quick-service restaurants, and health care facilities for pet parents.
McMillanDoolittle Point of View
The pet industry is ripe for innovation and investment – largely fueled by the time at home during the pandemic, at present there are more than 5 million new pets in the United States compared to 2019. This influx translates to notable growth in pet spending. In 2022 US pet spending totaled nearly $137B and Morgan Stanley projects an 8% CAGR for the pet industry by 2030 – one of the largest rates of return of any retail vertical.
Unlike other beneficiaries of the pandemic, such as home improvement and home furnishing retailers, pet industry spending is projected to remain strong with sustained opportunities for growth beyond the initial increase, as owners continue to invest in the health and well-being of their pets long-term.
Petco’s suite of in-store services offers practical advantages for the company beyond providing a convenient experience for owners. Veterinarians are the center of the pet ecosystem — owners rely on veterinarians to not only provide healthcare for their pets, but also for reliable product recommendations and to prescribe medications. Pairing veterinary care services alongside a robust retail assortment enables Petco to capture share of veterinarian-approved items and mitigate pet owners cross-shopping elsewhere. However, the store does not offer an entirely closed loop – the flagship does not offer pharmacy services, nor do the veterinarians prescribe medication on-site. This is not an insignificant component, as a survey of pet owners cited that 72% of owners expect to use prescription medications for their pets in the next six months.
The features and offerings of Petco’s flagship are evidence that the company understands the significant market growth opportunities alongside the preferences of owners and pets alike. While the scalability of this concept is questionable, it serves as a well-executed brand beacon for Petco, and we look forward to seeing if and how Petco samples elements of this concept in future store designs.
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