Have you ever been to Petco? If you own a pet, you’ve probably been inside of their stores in the past few years. Did they try to push their loyalty program on you, the one called VitalCare Rewards? They gave that schpiel to me and I said ah screw it I come here often enough and signed on. I easily get my money’s worth out of it by going twice a month for my pets, saving money overall on food and grooming. While this isn’t an ad for VitalCare or sponsored in any way, it almost feels like there’s no way this is profitable for Petco. What’s the catch? Well, they’re harvesting our data and tracking purchases as a way to gather primary consumer data and applying it, among other things, to streamline their business. Even outside the app, our data plays a huge role in their business strategy.
Through demographic data collected from VitalCare, Petco has seen in their own stores that Gen Xers spend the most money on their pets, while in fact Millenials own the most pets by percentage of overall population. The real value in the information gathered is that they figure out how to better invest their marketing resources, as each demographic must be targeted differently. Furthermore, Petco data market researchers understand that they must keep track of the lifetime purchase history of their members to get a better, real time sense of the pet food market. This helps them to be agile and avoid being unaware of changes happening in consumer preferences until months after, when it is difficult to change course.
Outside of the rewards program, secondary data abounds for increases in pet ownership and how we take care of our pets. For instance, pet adoptions during the pandemic rose significantly, with 23 million American homes reporting an adoption from 2020 to 2022. Petco knows that consumer spending trends will increase overall and may be better prepared to handle increased demand in the immediate future. What I also found interesting was that through VitalCare, Petco has learned that consumers are willing to spend more on human-like food for dogs. While at surface level, trends like this can be broadly tracked by noting what is missing from shelves and needs frequent restock, this does not capture the full picture of consumer behavior.
Consumers often try different dog foods and settle on one based on price and their pet’s preference. Through VitalCare, the company can track the journey each customer embarks on to find that final magic food. Based on the number of experimental cycles (i.e. how many foods, on average, did a customer try before settling), Petco can understand how they need to stock their shelves and why. Data driven initiatives like this are aimed to save $150 million by the conclusion of fiscal year 2025, according to CEO Ron Coughlin.
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