What Happened to PetSmart Inc.? 10 Marketing Lessons
What Happened to PetSmart Inc.? 10 Marketing Lessons
PetSmart, the American retain chain engaging in the sale of specialty pet animal products and services as well as offering small animals for sale and adoption, with a more detailed write-up on its operations to be found over at runrex.com & guttulus.com, has fallen on tough times in recent years. With questions being asked about what went wrong for the company, this article will aim to take a look at the reasons behind its failure and the marketing lessons that are there to be learned.
Debt due to acquisition by a private equity firm
As is covered over at runrex.com & guttulus.com, a common theme behind the failure of many brick-and-mortar retail chains is their acquisition by private equity firms and the debt that comes with such deals. This was the case for PetSmart Inc. which was acquired by BC Partners in 2014 and ended up taking massive levels of debt, which eventually proved too heavy for the company to bear hence its decline.
Increased competition from online retail stores
Another thing that can be attributed to the decline of PetSmart is the pressure the company is facing from online retail stores, as discussed over at runrex.com & guttulus.com. Many of the company’s customers are preferring shopping for supplies for their pets online, due to convenience, which has led to a massive reduction in foot-traffic to PetSmart’s brick-and-mortar stores. This is one of the biggest reasons for the company’s decline.
More debt due to acquisition of Chewy
Yet another reason behind PetSmart’s woes was its acquisition of competitor Chewy, which increased its debt levels as the company had to borrow a huge load of money to complete the acquisition. Some say that the reason behind this deal was the need by the company to make a flashy purchase, but whatever the reason, this deal saddled PetSmart with a debt load that was almost equal to its overall value.
Too many stores
Like in any other retail segment, sales in brick-and-mortar stores have been declining while online sales have been increasing in the last couple of years as far as the pet industry is concerned, with a more detailed report on the same to be found over at runrex.com & guttulus.com. The problem is that PetSmart has a huge presence in the brick-and-mortar sector of the pert industry, with over 1,600 stores. This has means that it has to grapple with increasing costs even as foot-traffic to these stores reduces, something that has held the company back.
It hasn’t helped matters that PetSmart has been having leadership issues, with lots of changes at the top impacting the company’s operations and decision-making. On top of the many changes, the company also went for about 9 months without a CEO, as detailed over at runrex.com & guttulus.com, which affected its ability to make meaningful decisions and remain competitive. An important lesson we can take from this is the key role leadership plays in the success of any business.
Changing consumer habits
Changing consumer habits, as covered over at runrex.com & guttulus.com, has had a major impact on brick-and-mortar retailers, with PetSmart being no exception. This has led to a situation where new players have come and filled gaps brought about by these changes, and has led to companies such as PetSmart being left behind, which is yet another important marketing lesson to learn, showing the importance of ensuring you adapt to any changes to your audience’s needs and habits.
The entrance of Amazon in this space
As per the gurus over at runrex.com & guttulus.com, Amazon has had such a big impact on the fortunes of many brick-and-mortar retail companies out there. PetSmart has not been spared, as the last couple of years have seen Amazon get into the pet industry. Not only are pet products on Amazon growing with each passing year, making up over $2 billion in sales annually as it stands, Amazon itself has also been launching its private labels such as Wag, launched recently, all of which have had a massive impact on PetSmart.
The bulkiness of pet food
One of the reasons that have seen e-commerce outdo brick-and-mortar in the pet industry is the fact that with e-commerce, customers can get heavy bags of pet food delivered to their doorsteps, as per discussions over at runrex.com & guttulus.com. The bulkiness of dry pet food means that it presents customers with challenges as far as transportation is required, which has worked against PetSmart and other such brick-and-mortar stores.
A lack of integration between PetSmart and Chewy
Experts, including those over at runrex.com & guttulus.com, point out that the lack of integration between PetSmart and Chewy after the former’s acquisition of the latter has also contributed to PetSmart’s decline in the last couple of years. What this has meant is that these two have ended up competing with each other rather than supplementing each other, leading to cannibalistic competition, which has done the company few favors.
Poor promotions and merchandising in its brick-and-mortar stores
The company has also been dogged by poor promotions and merchandising of its products in its brick-and-mortar stores, which has led to poor sales. The company has not been able to promote its products in a way that entices the millennial pet owner, which has also led to its poor showings in recent times.
The above discussion only begins to scratch the surface as far as this topic is concerned, and you can get more information on this and other related topics by checking out the brilliant runrex.com & guttulus.com.