Businessmodel of PetSmart

Customer Segments

PetSmart serves a large consumer base, offering broad range of speciality products, accessories, and other items for pets. The Company caters to a specific audience, offering products and services for pet owners, including owners of cats, dogs, birds, fish, reptiles, and other small pets, such as gerbils and mice.

PetSmart is a leading pet product retailer and service provider in its core operating jurisdictions of the US, Canada, and Puerto Rico, with it and its main competitor, PetCo, accounting for around 20% of all pet product sales in the US in 2015.

While the Company has established itself by offering a broad range of products at prices lower than those found at independent specialist pet stores, research suggests that its customers are typically higher income earners of upper middle age.

Value Propositions

PetSmart provides value to its customers in the following ways:

• Its size and industry standing, with the Company established as a market leader in its field and a popular source of pet products for consumers, and having garnered a reputation for providing high-quality and reliable products and services;
• Its broad range of products and additional services, with the Company providing a diverse range of pet products, accessories, and supplies – catering to owners of a broad selection of animals, including reptiles, fish, and small pets – as well as providing specialist services, such as grooming and training;
• Its competitive pricing, with the Company offering its products and service at reasonable prices compared to those found in independent pet stores and other pet retail chains;
• Its accessibility, with the Company serving customers through a large network of retail outlets across the US and Canada, as well as operating an online retail channel and a mobile app; and
• Its industry expertise and experience, with the Company employing trained retail staff who are able to provide relevant technical advice across its store network, as well as a team of experienced industry executives. ### Channels

PetSmart operates a corporate website at www.phx.corporate-ir.net, through which it provides information on its operations and corporate activities. The Company operates a consumer-facing website at www.petsmart.com, which provides more detail on the Company’s product and service portfolio, as well as doubling as an online retail channel. This channel allows to browse products, make purchases, and arrange deliveries. PetSmart also offers a mobile app, available on iOS and Android devices, which allows customers to book pet services and access resources.

PetSmart principally makes its sales through its network of around 1,500 pet stores spread across the US, Canada, and Puerto Rico. These outlets are staffed by dedicated sales personnel through which sales and services can be purchased directly. The Company also provides services to customers through 204 in-store PetSmart PetsHotel dog and cat boarding facilities.

PetSmart also operates distribution infrastructure across the US and Canada, which allows it to serve both its own stores and its customers quickly and efficiently.

Customer Relationships

PetSmart offers a large proportion of its products to customers on a self-service basis through its online retail store. This sales channel enables customers to browse items, make payments, track deliveries, and manage account details without interacting directly with members of the Company’s sales and service teams. The Company’s mobile app additionally enables customers to book certain pet services, as well as access resources independently.

The bulk of PetSmart’s sales are made through the Company’s chain of retail outlets, through which the Company’s in-store sales personnel are able to provide personal assistance with enquiries, complaints, and queries. The Company also offers personal care through its additional services, such as grooming, training, and boarding.

PetSmart additionally offers customer support via email, and provides a range of online support resources through its website. This includes FAQs and product information, as well as shipping information and specific training and animal care guidance. Customers can also follow the Company’s activities and interact with it directly through its social media accounts, including with Facebook, Twitter, Instagram, and YouTube.

Key Activities

PetSmart operates principally as a retailer of pet products, accessories, and supplies for pets of all kinds, including dogs, cats, fish, reptiles, and small animals.

It provides a broad range of products – including toys, food, grooming equipment, and pet habitats – to general consumers, as well as a range of additional services. This includes in-store grooming and training services, as well as boarding services through its network of PetSmart PetHotel facilities.

The Company operates a network of around 1,500 stores across the US and Canada, which serve as its principal avenue for sales. However, it also operates an online sales channel and mobile app.

Key Partners

PetSmart works closely with a broad network of partners in order to ensure its customers receive an effective and reliable service. These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, comprising suppliers of products and supplies that are resold by the Company through its stores and online sales portal, as well as suppliers of equipment, services, and technologies that are utilised more broadly across the Company’s business;
• Channel and Distribution Partners, comprising various logistics and distribution companies that assist in the Company’s distribution operations, ensuring that shipments are processed quickly and efficiently;
• Affiliate and Marketing Partners, principally comprising participants in the Company’s affiliate program, which enables websites and online business to earn commissions by driving traffic to the PetSmart website;
• Adoption Partners, comprising various pet-focused charitable organisations with which the Company jointly runs an animal adoption program; and
• Strategic and Alliance Partners, comprising various market leading companies across multiple sectors, with which the Company collaborates on joint marketing, branding, and other projects. PetSmart has launched a number of partnerships in recent years. This includes a strategic partnership with NBCUniversal Brand Development Group, a strategic partnership with Eukanuba Dog Foods, and an adoption partnership with Dumb Friends League.

Key Resources

PetSmart’s key resources are its products and supply chain, its online sales channel and mobile app, its IT and communications infrastructure, its network of physical retail outlets and other service facilities, its partnerships, and its personnel.

PetSmart owns and or leases a number of properties across the US and Canada that are key to its ongoing operations. This notably includes the Company’s network of around 1,500 retail locations, as well as its extensive distribution and storage facilities.

Cost Structure

PetSmart incurs costs in relation to the procurement of supplies and products, the procurement of services, the development of its online platform and mobile app, the maintenance of its IT and communications infrastructure, the management of its partnerships, the implementation of advertising and marketing campaigns, and the retention of its personnel.

Revenue Streams

PetSmart generates revenue through the sale of various pet-related products, accessories, and supplies. The Company derives the bulk of its revenue in the form of point-of-sale fees, with a smaller portion of its revenue derived in the form of service fees paid in relation to the Company’s provision of services such as grooming, training, and boarding.

PetSmart is a privately-owned Company and as such is not obliged to publish its financial reports online. Media coverage, however, suggests that in 2015 the Company generated revenue for the year in the amount of $6.96 billion. Most of this revenue appears to have been derived through sales made at the Company’s various retail outlets.