Americans arguably love their dogs and cats more than themselves (and most other humans).
So during the global pandemic, consumers were understandably alarmed when they couldn’t find enough Bacon Bits or Kibbles for poor Sparky. Walmart Stores Inc. (WMT) and Amazon Inc. (AMZN) had frequently run out of pet food and other supplies. Online pet retailer Chewy Inc. filled some of the void but consumers keenly felt the shortage.
Now PetSmart wants to ease some of that anxiety – and close the gap with pet industry leaders Amazon, Walmart, and Chewy. The specialty pet food retailer said Instacart shoppers can now get same-day delivery of food, treats, toys, and accessories from 1,500 PetSmart stores across the country.
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“By expanding our Instacart partnership into the U.S., we are providing even more convenience and accessibility to help pet parents quickly get products and solutions for pets of all species,” Cherise Ordlock, senior vice president of Digital at PetSmart, said in a statement.
Image source: All About Pets
PetSmart and Instacart Jumping On a Trend
Pandemic or no pandemic, the demand for pet products remains robust.
There are currently five million more pets in the United States than there were in 2019, according to Morgan Stanley, with about 4% more households caring for at least one pet.
Younger Americans, ages 18-34, are driving much of that growth.
“As Millennials become homeowners, delay having children and increasingly have smaller families, they tend to spend more on their pets than older pet owners do, especially on premium food and services,” said analyst Simeon Gutman.
“The increase in ownership during the pandemic was driven primarily by this cohort, and they are likely to accelerate the trends toward treating pets like humans and providing premium care,” he said. “As a result, the COVID benefit to the pet industry likely has a long tail.”
Morgan Stanley predicts that total spending will hit $277 billion by 2030, a 134% increase from 2019. That represents 8% annual growth, a rate of return that far exceeds any other retail category.
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That’s why PetSmart’s partnership with Instacart is a “brilliant strategic initiative,” said Burt Flickinger, managing director of Strategic Resources Group consulting firm in New York City.
Instacart will allow PetSmart to cross-sell its Freshpet dog and cat food brand with higher margin items like toys, accessories, and clothing, including Halloween costumes, Flickinger said. PetSmart will also be better able to reach pet hospitals and pet owners who live in more rural regions, he said.
As for Instacart, the company will be able to deliver larger items like dog crates, cat towers, and aquariums to customers. Last year, Instacart launched its “Big and Bulky” technology platform so it can fill online orders for retailers like Big Lots, Container Store, and Office Depot.
Flickinger says Instacart really needed to expand into larger merchandise before it goes public. The company recently hiked its valuation to $12 billion from $10 billion and is widely expected to file for an IPO though the timing is unclear.
