Walmart debuts PetRx site, part of effort to grow share against Amazon, Chewy

by Kim Souza (ksouza@talkbusiness.net) 751 views 

Pet product area in the Walmart store in Jane, Mo.

Walmart announced Tuesday (May 7) a new website that allows consumers to shop for pet medications online, promising to deliver low prices and the convenience of free two-day delivery for $35 orders.

The service also will soon include in-store pickup for dozens of the most requested pet medications. The Walmart PetRX site is accessible directly or by searching for “Pet Rx” in the search bar on Walmart.com.

Consumers can find more than 300 brands of products for pets including horses and livestock in addition to cats and dogs. Walmart said customers have been asking for more organic options for their pets and the retail giant has delivered.

“We’ve expanded our pet assortment online with more than 100 new pet brands over the last year, including more premium and health-conscious brands like Blue Buffalo, Greenies, and Hill’s Science Diet. We’ve also developed more premium and ‘free-from’ options with our private label brands, Pure Balance, Golden Rewards and Vibrant Life, which offer premium ingredients, like farm-raised chicken, at three-fourths the price,” noted Kieran Shanahan, senior vice president of retail, food and consumables, health & wellness at Walmart U.S. eCommerce.

With Walmart PetRx, the consumer attaches a script or provides the veterinarian’s contact information along with the pet’s name and breed. Walmart will contact the veterinarian to obtain that script and then fill the order. Walmart also said it would expand the number of in-store pet clinics starting with nine new locations in the Dallas-Fort Worth metro by June. These in-store clinics are managed by either Essentials Pet Care or  VetIQ. Walmart spokeswoman Camille Dunn said the new Dallas area clinics will be run by Essentials Pet Care.

“We have plans to open 100 more clinics over the next 12 months, operated by Essential Pet Care or VetIQ. We have not disclosed where the additional clinics will be located,” Dunn told Talk Business & Politics in an email.

Roughly 68% of U.S. households own a pet and 90% of Americans live within 10 miles of a Walmart store. Even with 100 new clinics it will still be a small percentage of the more than 5,400 Walmart U.S. stores. Shanahan said Walmart’s work in expanding access and products in the pet category is chance for consumers to save as much as 60% on vaccines and minor illnesses, and exams in the stores that have clinics.

ANALYST INSIGHT
Keith Anderson, senior vice president of strategy and insights at Boston-based Profitero, said PetRx is a positive move for Walmart even though they are behind the curve given Amazon and Chewys.com gobbled up a large part on the online market share in pet supplies.

He said Walmart’s proposition to deliver products within two days works for items consumers don’t need right away. He said the in-store pickup is a better option for immediate access and that’s something Amazon and Chewy.com can’t do to Walmart’s scale. Anderson said Walmart chose not to enter the bidding process for Chewy.com and it went to PetSmart who is now trying to spin it off as a stand-alone enterprise. He said Walmart has gradually added premium brands like Blue Buffalo and Hill’s Science Diet that just a few years ago could only be purchased at pet specialty stores or a veterinarian’s office.

“This move creates an opportunity for Walmart to increase pet category sales and marry it with the retailer’s own consumer access in a scalable way. Walmart is able to take these specialty brands and meds and democratize them for the masses like no other retailer,” Anderson told Talk Business & Politics.

He also applauded the move to add more clinics to stores saying the service is a value-add for its massive customer base.

“Here in New England my dog gets ear infections pretty regularly and it’s a special trip to the vet which is a single mission only. It would be great to take the dog to the vet and also be able to buy a week’s groceries during the same trip,” Anderson said.

When asked about the timing of Walmart’s push into pet meds, Anderson said Walmart didn’t need to be first in trying to capture business that was moving online.

“Walmart doesn’t have to be first. They can let others use R&D funds to try and figure out the play, because when Walmart applies its own scale and logistical and category expertise the company can radically jump ahead of the pack,” Anderson said.

He said Walmart wants to grow share in this consumable category given the level of Millennial spending on family pets. Profitero reports online pet category sales total $3.6 billion annually. Online sales are growing at 53% annually compared to 0.7% for in-store sales. The biggest online players in the pet product category over the past 12 months are Amazon (55%), Chewy.com (31%), PetSmart.com (15%), Petco.com (13%) and Walmart.com/SamsClub.com (11%), according to data provided by Statista, Food Advisor, eMarketer and Walker Sands.

Profitero reports Chewy.com is 2.3% cheaper on pet supplies – including food – than Amazon. Walmart averaged 1.8% more expensive than Amazon, Target was 5.5% more expensive, and Jet.com averaged 7.5% more costly than Amazon. Petco.com had the largest price gap compared to Amazon at 16.3% most expensive, according to Profitero.

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