The pandemic has triggered various shifts in the digital-first economy, and Petco has just notched another one.
The company last week announced a cross between a subscription plan and health insurance for pets. Called Vital Care, the paid annual plan provides pet owners with options to meet their animals’ routine wellness needs.
The program is available through Petco.com and the Petco app. Membership costs $19 per month and requires an annual commitment. The plan includes routine services and veterinary exams at 22 locations, unlimited nail trims for dogs at Petco grooming salons, and inclusion in the Petco loyalty program.
“With an uptick in pet fostering and adoptions in 2020 and families spending more time than ever at home with their pets, providing streamlined pet care services at an affordable price point is something we believe pet parents are looking for, and Petco is perfectly positioned to deliver,” said Tariq Hassan, Petco’s chief marketing officer.
Petco has worked hard to hang its brand and business model on pet care. In conjunction with the Vital Care announcement, the company also introduced the opening of its 100th in-store veterinary hospital, located in Encinitas, California. Petco has more than doubled its in-store vet hospitals over the past year. Those facilities offer access to preventive care, vaccination clinics, full-service hospitals, telehealth, pharmacy services and other options. Building upon its veterinary hospital growth over the past year, Petco expects to increase that momentum through the end of the year.
The move comes as the owners of Petco are exploring a buyout of the pet retail store that could net as much as $6 billion, according to Bloomberg. Anonymous sources have said that the owners, CVC Capital Partners and the Canada Pension Plan Investment Board, are looking into potential advisors and strategic options, with formal efforts toward a sale or initial public offering (IPO) expected to come sometime next year.
But the owners could decide not to sell at all and keep the company. They acquired Petco in 2016 for $4.6 billion from TPG and Leonard Green, according to Bloomberg.
Petco’s in-store vet service also gets pet owners to visit brick-and-mortar locations at a time when the business is finding better traction online. Internet research firm Packaged Facts reports that eCommerce is expected to comprise 35 percent of pet product sales by 2024.
“During the past few years, sales of internet-connected and Bluetooth-enabled pet products have proliferated while outpacing the overall market growth average,” Packaged Facts said in a statement. “Venture capitalist-backed, app-based pet care sitting and walking services such as Rover and Wag! have broadsided the traditional non-medical pet services paradigm. Meanwhile, veterinary telemedicine services have begun to move into the mainstream.”
For 2020, Packaged Facts expects sales of digital pet care products and services to top $27 billion, set to outpace the overall pet market’s forecasted 2019-2024 compound annual growth rate of 5.4 percent.