This paper, written for my master's level IT Policy & Strategy course, examines the problems PetSmart is currently having, and how an IT project centered around improving the PetPerks program could help the company. Includes a SWOT analysis.

1. Running Head: STRATEGIC PLAN: PETSMART
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Strategic Plan: PetSmart
Teresa J. Rothaar
Wilmington University

2. STRAGETIC PLAN: PETSMART
Strategic Plan: PetSmart
Introduction
Headquartered in Phoenix, Arizona, PetSmart is the largest specialty pet retailer in North
America, with 1,289 stores in the U.S., Puerto Rico, and Canada (PetSmart, 2014). In addition to
hard goods, the company also offers services such as grooming, dog training, boarding, and
veterinary care in select stores. The company sells birds, fish, reptiles, and other small animals,
but it does not sell dogs or cats. However, each store offers space for dog and cat adoptions to
local rescues. A stock market darling with a bright future only two years ago (Sandholm, 2012),
the company has since struggled with lackluster sales growth, and has recently been under
pressure to allow itself to be sold (Zack, 2014).
Company Vision/Mission
According to the company’s website, PetSmart’s mission/vision is “to provide Total
Lifetime Care to every pet, every parent, every time.”
Objectives & Goals
In its 2010 Annual Report, PetSmart spoke of focusing less on hard goods, which it felt
offered limited growth potential, and more on the burgeoning pet services market, in particular
its PetsHotel boarding facility (PetSmart, 2011). In its most recent Annual Report, the company
talks of having shifted its focus. While PetSmart intends to continue making inroads into
services, its primary objective going forward is to differentiate itself from the competition
through superior customer engagement, specifically:
· Building a personal relationship with each customer and their pets.
· Expanding the company’s private label goods, and continuing to expand pet
services.
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3. STRAGETIC PLAN: PETSMART
· Putting a special focus on the company’s “most valuable” customers, which it
defines as those who purchase the company’s channel exclusive foods, utilize
grooming services, and who have recently adopted a dog or cat, or purchased fish.
To this effect, PetSmart has a number of IT initiatives planned, including a revamping of
PetSmart.com, giving store employees mobile devices to use while waiting on customers, and
offering customers the option to purchase online and pick up their order in a store. Subsequent to
the release of its Annual Report, PetSmart announced its intention to acquire ecommerce pet
retailer Pet360 (Hertzler, 2014). The company also wishes to build more stores, expand in
existing markets, and increase operating efficiency overall.
Industry Analysis
The pet industry has consistently remained one of the few bright spots of the American
economy since the 2008 economic crash. Although consumers have reined in spending in most
areas, they are spending more on their pets than ever before. According to the American Pet
Products Association (APPA), Americans will spend $58.51 billion on pet products and services
in 2014, up from $55.72 billion on 2013, and $41.2 billion in 2007. Approximately 68% of
American households own a pet, up from 56% in 1988, the first year the APPA began surveying
consumers. Dogs are the most popular pet, followed by cats and freshwater fish.
Brough (n.d.) reports that a psychological shift from pet ownership to pet parenting has
resulted in “pet parents” seeking out more specialized products and services for their pets, such
as natural and organic foods, concierge pet sitting and boarding, and pet travel. Services is an
especially strong category; about 22% of small pet businesses offset declines in their hard goods
sales by beefing up on services (Brough).
Although the industry is large, most pet businesses are very small, with 92.2% of them
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having four employees or fewer, and less than 8% having more than 20 employees (Brough).
PetSmart SWOT Analysis
Strengths
· The PetSmart brand is large, well established, and well known.
· Company image is very good overall.
· Individual stores have good community ties, with in-store adoption centers and
sponsorship of local pet events, such as the Pittsburgh Pet Walk that precedes the
city’s annual marathon.
Weaknesses
· Company may be too big for its own good, limiting its agility to respond to
changing trends.
· Despite the company’s claims of wanting to penetrate services more heavily,
PetsHotel seems like an afterthought.
· PetSmart.com is clunky and not intuitive; it’s nothing like Amazon.
· Retail store checkout lines are notoriously long and slow, and self-checkout is not
offered at all.
· PetPerks rewards card is nothing special.
Opportunities
· Capitalizing on the recent purchase of Pet360, a successful pet ecommerce
business, and drawing on their expertise.
· PetsHotel could be wildly successful if marketed properly; perhaps franchise
some locations?
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5. STRAGETIC PLAN: PETSMART
· Expansion of private label brands, especially organic and natural foods.
· Use technology to make stores more customer-friendly, especially self-checkout,
and to make PetPerks rewards card a better program.
Threats
· Petco can take over the market, and possibly acquire PetSmart at a fire sale price
down the road.
· Small, independent specialty retailers and service providers are more agile and
can quickly adapt to industry trends, as well as provide more personalized service.
· PetSmart’s size makes it more vulnerable to negative press than its tiny
competitors.
· Amazon, Wal-Mart, Costco, etc., can offer pet foods and products at potentially
lower prices than PetSmart.
IT Recommendations
The following IT projects are recommended to support PetSmart’s goal of differentiation
through customer engagement and relationship building:
· Food Lion has a kiosk in each store where customers can scan their rewards cards
and receive coupons personalized just for them. Alternatively, they can go on the
store’s website and have the coupons loaded directly to their card. PetSmart
should do the same thing with their PetPerks rewards card.
· There is currently no way to book grooming, training, veterinary, or boarding
appointments through PetSmart.com; the website instructs customers to call each
individual location. This is unacceptable for a large company operating in 2014.
Customers should be able to book appointments through the website, and
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additionally sign up to receive coupons and reminders via email, such as when
their pet is due for a vaccination.
Although both of these projects need to be done—and even more could be recommended
(such as self-checkout registers)—I recommend that PetSmart implement the PetPerks project
first, as that is the one that is geared most toward personalization of the customer experience.
Currently, the PetPerks card offers nothing particularly special to customers. There is no
personalization; it’s just another store card. A PetPerks customer should be able to visit
PetSmart.com, log in to their PetPerks account, and fill out profiles for each of their pets, which
PetSmart could use, in conjunction with past purchase history, to offer each customer coupons
that are personalized just for them and their particular pets. This builds a relationship between
the pet parent and PetSmart, and gives them a reason to shop there instead of at Petco or a big
box store.
Food Lion’s in-store coupon kiosk, located just inside each store’s entrance, is terrific for
driving sales because it reminds customers to get their special offers just as they are entering the
store. A customer who comes into the store intending only, for example, to buy milk may decide
to pick up some other items once they see that Food Lion has given them coupons for those
items. PetSmart can do the same thing not only to drive impulse hard goods sales, but to promote
services. A customer who comes in to purchase a bag of dog food may decide to take a look at
the grooming shop if the in-store kiosk prints a coupon offering x% off a grooming appointment.
PetPerks should be the heart of PetSmart’s efforts to build stronger relationships with
customers, and the technology exists to make it a true rewards program instead of just another
store card.
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References
American Pet Products Association. (n.d.). Pet Industry Market Size & Ownership Statistics.
Retrieved from http://www.americanpetproducts.org/press_industrytrends.asp
Brough, C. (n.d.). Pet Businesses Will Prosper: Industry Trends for 2014 and Beyond.
MultiBriefs. Retrieved from
http://www.multibriefs.com/briefs/exclusive/pet_businesses_will_prosper.html#.VAyXO
GRdWKs
Hertzler, L. (2014, September 5). PetSmart to Acquire Montco E-Commerce Company Pet360.
Philadelphia Business Journal. Retrieved from
http://www.bizjournals.com/philadelphia/news/2014/09/05/petsmart-to-acquire-montco-e-
commerce-company.html
PetSmart. (2014). PetSmart 2013 Annual Report. Retrieved from http://phx.corporate-ir.
net/External.File?
item=UGFyZW50SUQ9MjMzOTUyfENoaWxkSUQ9LTF8VHlwZT0z&t=1
PetSmart. (2011). PetSmart 2010 Annual Report. Retrieved from http://phx.corporate-ir.
net/External.File?
item=UGFyZW50SUQ9OTE5MDB8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1
Sandholm, D. (2012, 13 February). Cramer: Put PetSmart Stock On Your Radar. CNBC.
Retrieved from http://www.cnbc.com/id/46373423
Zack, G. (2014, September 6). Bank Of America: PetSmart Sale Unlikely. Bidness Etc.
Retrieved from http://www.bidnessetc.com/25155-bank-of-america-petsmart-sale-unlikely/
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