International sales increased an even faster 30%. The company also reported a record profit of $857 million during the second quarter and accelerated expansions ...
The pet products e-retailer offers free, two-day shipping on all orders of $49 or more.
Wag.com, an e-retail site selling products for pets, debuts today from the creators of Diapers.com and Soap.com. The Wag.com product catalog includes more than 10,000 products at launch and the site shares back-end operations, such as warehouse space, customer service and shipping efficiencies, with its sister sites, the company says.
Wag.com is operated by Quidsi Inc., a wholly owned subsidiary of Amazon.com, the No. 1 e-retailer in Internet Retailer’s 2010 Top 500 Guide. Quidsi’s Diapers.com is No. 72.
Wag.com leaders say the site is aimed at serving the needs of families—Quidsi’s target market for its other web properties. “A lot of our customers have pets in their family, and running out for pet food is an errand that certainly is not the most enjoyable one,” says David Zhang, site leader for Wag.com. “Our experience is in building relationships with customers, and a lot of our customers consider their pets members of the family, so this is a natural extension for where we are going.”
Wag.com will offer free, two-day shipping on any order of $49 or more, a low shipping threshold considering the weight of some of the products it will sell, such as 25-pound bags of dog food or jumbo containers of kitty litter. Zhang says Quidsi’s worked out the value equation in its shipping process to make it work. The shipping minimum drops further to $39 if a consumer combines a Wag.com order with items from Diapers.com, Soap.com or skincare site BeautyBar.com. “Shipping is a main challenge of being in the pet business and is the big reason why others have failed in this space,” he says, pointing to the boom-to-bust example of Pets.com, which attracted more than 500,000 customers in the early days of e-commerce, then went bust in 2001. “Over the years we’ve optimized and optimized our fulfillment process to make sure our systems are able to support larger and lower-margin bulky products.”
That includes using robots to help fill orders quickly at Quidsi’s warehouses in Gouldsboro, PA, Reno, NV, and Kansas City, MO, and using multiple shipping services, including UPS, FedEx and OnTrac, which provides delivery services in six states in the West.
The e-retailer sees the convenience of fast, free two-day delivery as a key selling point that competing online retailers of pet supplies don’t offer. Pet product seller, Drs. Foster and Smith, No. 115 in the Top 500 Guide, for example, ships any order of $49 or more free, but delivery can take seven business days. 1800PetMeds.com, operated by No. 107 PetMed Express Inc., offers free shipping for orders of $39 or more with delivery within five to nine days. Petsmart.com, No. 294, participates in GSI Commerce’s ShopRunner premium shipping program, which offers two-day shipping to members who pay an annual $79 membership fee. Petco Animal Supplies Inc., No. 224, bases its shipping rates on product weight and the shipping method selected. Representatives from each pet product retailer did not respond to inquiries or declined to comment.
Tim Sailor, founder and principal of Navigo Consulting Group, advises e-retailers on how to offer free shipping without breaking the bank. He says speedy delivery can drive incremental sales and be an important deciding factor for consumers trying to select a retailer. “Speedy delivery does increase sales, repeat orders and lowers cart abandonment rates,” he says. Sailor estimates the shipping price for a 25-pound bag of dog food via FedEx ground service for a retailer with the shipping volume of Quidsi may cost anywhere from $6 to $14 depending on the origination and destination points; via air cost estimates range from $12 to $45. Sailor does not consult with Quidsi directly.
The inclination of consumers in Wag.com’s target market to pamper their pets may also help offset the brunt of shipping costs. Zhang says consumers’ fond feelings for their pets can lead them to buy premium brand pet food or add an extra higher-margin item or two, such as pet vitamins or pet shampoo, to an order. “Our customer base is asking for more premium brands, and premium brands have better economics,” he says.
The product array Wag.com carries runs the gamut from mass market pet brands to items found in boutique-style pet shops, says Liz Hochberg, Wag.com’s director of merchandising, and includes products for dogs, cats, birds, fish, reptiles and small animals. The e-retailer does not sell prescription pet products at this time, but may consider offering them in the future, Zhang says.
Quidsi’s external marketing plans for Wag.com are still under development, but it is supporting Wag.com’s launch by marketing the site to existing Quidsi customers and on social networks, including Facebook. “Social media is a big part of the strategy,” Zhang says. “Pet parents are very social media-savvy and like to talk about their pets, tweet about them and post pictures of them. We want to be there and foster that kind of engagement with them.”
Zhang also expects Wags.com to get some real estate on Amazon.com’s home page, which features links to some of Amazon’s wholly owned subsidiary sites, such as Zappos, Woot, AbeBooks and Quidsi’s Diapers.com and Soap.com. Amazon closed April 1 on its acquisition of Quidsi in a deal valued at approximately $500 million. Zhang says Amazon is not managing day-to-day operations at Quidsi. “We’re still operating autonomously, but within the larger umbrella of Amazon,” he says.