Petco looks to the web to enhance multi-channel marketing
Petco Animal Supplies Inc. has taken an initial investment several years ago in an Internet pure-play and turned it into a successful e-commerce operation that hosted more than 15 million unique visitors in 2005, executive chairman Brian Devine told attendees Monday at the National Retail Federation convention in New York City.
Petco was an early investor in Petopia, an Internet pure-play that burned through almost $200 million in start-up capital. But after the initial company failed, Petco acquired the brand for $2.5 million, moved the operation to San Diego and began building the unit into a profitable operation that today is tightly integrated with Petco`s network of 780 stores. “When we acquired the brand it was losing $4 million a month,” Devine says. “Now we have an operation run by just 17 people that’s profitable.”
While he didn’t break out any specific numbers, Devine says Petco.com generates “annual sales that are about nine or 10 times that of some of our top performing stores.”
In 2006, Petco’s top e-commerce priority is using its integrated marketing data base to drive both web and store sales. “We have plenty of data on how our customers shop, now we want to use Petco.com to make them aware that we know that,” Devine says.
For instance, better customer segmentation can help Petco increase the number of shoppers enrolled in its customer loyalty program and use Petco.com to check specific information. “We are enrolling about 1 million more people into our loyalty program each quarter,” Devine says. “These are our best customers and we want to use the web to let them know they can buy their pet food and supplies online or offline.”
About 70% of Petco.com’s web shoppers are women who shop both online and in Petco stores, he says. With more effective data base marketing integrated with its web strategy, Petco can do a better job of catering to its best customers, Devine says. “We made the web and web retailing into a very good value proposition,” Devine says.
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