Chewy’s plan to keep up with hungry cats and dogs

D2C pet supply company Chewy boomed as people adopted new pets and turned to online shopping. In Q22021, Chewy’s sales grew 27% YoY.

CEO Sumit Singh attributed the growth not to the pandemic, but to the value of getting your pets’ stuff shipped right to your door.

But this quarter…

… Chewy saw lower than expected earnings and falling stock prices, per Forbes. Why?

• Labor shortages
• Shipping lags
• Increased digital advertising costs

Google and Facebook ads are up 51% and 47% respectively, Singh said.

To stay on top, Chewy is:

• Launching Practice Hub, a marketplace where vets can sell prescription meds to Chewy customers
• Opening 3 fulfillment centers in Nashville, Reno, and Kansas City over the next 14 months, per Retail Dive

Chewy opened an automated center in Archbald, Pennsylvania, in October 2020, and will retrofit some of its existing 10 non-automated centers.

Automated centers will use conveyor belts and pneumatic rollers for faster fulfillment, but they’ll still need employees. Nashville, for example, is expected to hire ~1.2k people.

Meanwhile, Petco is expanding PupBox, its subscription for dogs, which has grown 3x in the last 2 years. The new boxes include 4 age groups, including puppies and seniors, with 5-7 curated picks for each.

Now please enjoy this thread of pets sitting in Chewy boxes.