E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
The Internet has changed enough that Drs. Foster & Smith believes consumers understand shipping well enough to be willing to pay a surcharge for the convenience of having 40-pound bags of dog food delivered to their doorsteps.
One of the stories that has entered the lore of failed dot-com retailers is that shipping bulky dog food was one of the things that did in Pets.com. But that’s not keeping Drs. Foster & Smith Inc., which derives a third of its revenue from DrsFosterSmith.com, from adding dog and cat food to its site and catalog. The Internet has changed enough in the two years since Pets.com got buried that Drs. Foster & Smith believes consumers understand shipping well enough that they will be willing to pay a surcharge for the convenience of having 40-pound bags of dog food delivered to their doorsteps. “People understand that if they want the convenience of shopping online, they’re going to spend a dollar or two more for it,” Joe Voellinger, Internet marketing manager, tells InternetRetailer.com. “They’ve become accustomed to it online.”
With the acquisition last year of Pet Warehouse, Drs. Foster & Smith broadened its focus to pets beyond dogs and cats and in that year has learned about shipping bulky products. It ruled out zone-based shipping because it was too confusing for the customer. Then it tried incorporating the average additional shipping cost into the price of the product and charging just regular shipping. But customers who comparison shopped focused on the stated price and not the price with shipping and so Drs. Foster & Smith abandoned that approach. Now it will just add the surcharge for products over a certain weight to the shipping costs. “It’s the simplest and the easiest for the customer,” Voellinger says.
Drs. Foster & Smith’s goal is to break even on selling dog and cat food. “It’s not a money maker,” Voellinger says. “We’re doing it because our customers requested it of us.”
The company plans to add cat and dog food products over the next year.