Pets At Home - The No 1 place to work . How did they become such a great place to work and the UK's NO 1 pets retailer

1. Service excellence – Pets @ Home
“To be the NO 1 pet shop in the
world”
Tim Slade & Saj Bhojani
1

2. Welcome to the No 1 Pet Shop in the world
2

3. Dog Cam
3

4. Agenda
1. Business review
2. No 1 place to work
3. Key Conclusions
4. Appendix
4

5. Formidable business performance consistent revenue & profit growth
£m
700
Store Numbers
400
350
300
250
200
150
100
50
0
Turnover
600
500
400
300
200
100
2006 2007 2008 2009 2010 2011* 2012 2013
Stores
£m
120
0
2006 2007 2008 2009 2010 2011* 2012 2013
£m
600
Profit ( EBITDA )
100
500
80
400
60
Gross Debt
300
200
40
100
20
0
0
2006 2007 2008 2009 2010 2011* 2012 2013
Turnover
EBITDA
EBITDA Margin %
Stores
Vet Practices
2006
279.2
40.7
14.6%
173
36
2007
306.5
46.7
15.2%
193
39
2008
354.6
60.7
17.1%
213
42
2006 2007 2008 2009 2010 2011* 2012 2013
Expires 2017
Year ending March
2009
2010
404.3
467.7
70
84.3
17.3%
18.0%
232
256
51
59
2011*
517.8
93
18.0%
281
73
2012
544.3
91.7
16.8%
313
92
2013
598.3
100.8
16.8%
345
209
5 Yr CAGR
11.0%
10.7%
10.1%
5

6. 350 Stores typically out of town settings, 10,000 sq feet.
Pets are the UK’s leading specialist
retailer of pet foods, pet related
products, accessories and services
Recent operational highlights
• Continued investment in new stores &
formats (32 stores in FY12)
• Opening of 2nd distribution centre &
Hong Kong sourcing operation
• Expansion of vet practices and
grooming salons (18 new grooming
salons, 19 instore vet practices)
6

7. Range expansion core strategic driver
Improved good, better, best range expansion in key dog
and cat areas including luxury ranges
Expansion is driven further by innovation focus eg
specialist shampoos, indestructible dog toys with
squeakers that only dogs can hear
Continued investment and strong performance of own
brand development e.g. Wainwrights
Web used to drive extended ranges
Pets at Home insurance introduced with pleasing
performance. Stand alone website developed.
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8. Service proposition continues to grow creating a one stop shop
Pets continue to invest in service proposition
92 In care Veterinary practises
- Second largest vet chain in the UK
61 Grooming salons
– The first national chain of groomers
Services continue the unique opportunity within the Pet space to develop customer
engagement
Stylists and vets have the opportunity going forward to provide more general
advice on health and wellbeing
8

9. Considerable space given up to services within store estate
(delivers authority, expertise and lock in)
9

10. Service proposition given strong home page presence
Links to additional services:
• Pet Insurance
• Veterinary services
• Pet adoption
• Grooming services
Links to additional services:
• Pet Insurance
• Help Advice
10

11. Service leverages multi channel – online nutrition booking system
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12. Accelerating ecommerce growth via range, services & acquisition
eComm growth circa 28.5% LFL
Visitor numbers reaching 1.5m per month/4week
period
Significant investment in on site UGC through video
channel – also includes Pet Care videos from
pets….used to drive specialist credentials
Extended ranges continue to grow on site.
Delivery to store trial completed, intention to roll out
this service in forthcoming year. This would be on top
of reserve and collect
Dec 2012 saw the acquisition of Ride Away, a
significant ecommerce business in a £2.8bn
equestrian market. This enhances specialist
credentials, the ecommerce offer and fits Pets values
and ethos
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13. Future growth opportunities identified including a loyalty programme
Following extensive customer research and analysis of retail
loyalty schemes – loyalty identified as a key benefit for existing
customers
Nov 2012 saw launch of Pets at Home VIP (Very important Pets)
which rewards loyalty by earning Lifelines for nominated animal
rehoming charities.
The lifelines earned by customers swiping their card which turn
into financial rewards for nominated rehoming charities.
Initial sign up and customer reaction to club has been positive and
beyond expectation. Over 1 million sign ups now
Internal belief is the VIP club will have a significant role to play in
the future of the business…..presumably through data collection
of customer purchase behaviour to understand RFM value
13

14. Employee engagement seen as a critical factor to business growth
Circa 6000 colleagues, consistent rankings in 25 Best Big
companies to work for. Including NO 1
Simple, easy to understand set of values – clearly visible
within the business
Unique relationship with colleagues and pets (owners and
products) Colleague turnover less than 20%
Structured training programme for every colleague, with
choice to specialise via Pets at Home academy.
Significant commercial investment in delivering employee
engagement & removal of task
NPS now regularly 80% and higher
We’re All Ears is the internal employee engagement
measure/process – last measured at 91%
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15. Giving something back
Central and local relationships
with Scouts, Brownies and Guides
– includes free animal workshops
to encourage animal care badges.
Schools – Stores offer school
visits for children to learn about
animals
Support adoption for Pets – Pets
at Home work with a national Pets
charity helping the rehoming of
pets
15

16. Agenda
1. Business review
At operating level similar to Dunelm, private equity
ownership. Biggest Pet Chain in UK. Many similarities to
Dunelm
2. No 1 place to work
3. Key Conclusions
4. Appendix
16

17. Becoming the No 1 place to work…..
• 1st place in the Sunday Times Top Big Companies to Work in 2013, 2nd in 2012
• Employee engagement for Pets at Home is about having a business that is
• full of people that are really ‘up for it’
• passionate about what they do,
• understanding how and what they do fits in with the big scheme of things
• are real advocates for the business.
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18. Becoming the No 1 place to work…..
Employee engagement is a long game. Has taken 8 years to get to No 1
Journey had a very clear goal of creating an amazing place to work, through 3 core areas
1. Recruit the right people
•
Get pets and get retail
2. Train them and give them the right tools and skills they need to do their jobs well
•
Everyone that works at Pets at Home has access to a wide variety of specialist training
courses including pet nutrition, microchipping, grooming and the legally recognised Suitably
Qualified Person (SQP) qualification, enabling them to dispense licensed flea and worm
treatments
3. Reward and recognise them
•
Bonus, pay and visible recognition
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19. Becoming the No 1 place to work…..through a balanced workforce
• Whilst 92% of their employees are pet owners it’s not a prerequisite to work for
Pets at Home.
• Must get pets – not necessarily own a Pet
• Being good with people and willing to do the hard work that is involved with
being in a retail environment equally important
Therefore, that’s the balance that they strive to identify in the people that they hire.
• Their model, a la the Service Profit Chain is
recruit the right people
create a great place to work
AND
they will deliver great service to
their customers and that will put
money in the till.
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20. Employee engagement delivers hard benefits in retention & recruitment
• 8 years ago labour turnover was over 70%
• Recruitment costs were over £300,000 per year on recruiting new retail management.
• Today, stores has doubled and they only spend £30,000 per year on recruitment costs
because turnover has plummeted.
• Internal promotion is encouraged with 90% or more of assistant store managers and
area managers rising through the ranks.
.
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21. Employee engagement tactics
21

22. Employee engagement tactics
1. Pay linked to training and service
2. Clear team bonus schemes
3. Significant training investment
• Expert badges
• Pet well being courses
• H&S courses
4. 97% of employees own a pet – in head Office colleagues allowed to bring Pets to work
5. Birthday off (in-store and head office)
6. Allowed 1 days off per annum to work in a local charity
7. One of the most powerful ways to recognise people were hand-written notes.
8. 25% staff discount
9. Treats – access to a staff discount scheme to access discounts on insurance, holidays etc
10. Ethical approach to corporate social responsibility – eg Pet adoption scheme
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23. Agenda
1. Business review
2. No 1 place to work
At operating level similar to Dunelm, private equity
ownership. Biggest Pet Chain in UK. Many similarities to
Dunelm
Employee engagement drives customer engagement –
clear link to NPS. Employee engagement is a journey
and an investment
3. Key Conclusions
4. Appendix
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24. Key Conclusions - becoming NO 1
1. To be No 1 you need to be No 1 at product and service offering
2. Service offering = 2 different elements or dimensions
• Services offered as part of value proposition (Vet service or M2M)
• Services to customers (Customer First)
3. Value added services/ A service offering enables
• Differentiation
• Increases share of wallet (customer lifetime spend)
• Brand authority and expertise
4. To deliver a great service to customers you need a highly engaged colleague workforce
• Motivated
• Satisfied
• Understand business and culture
• Rewarded
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25. Agenda
1. Business review
2. No 1 place to work
3. Key Conclusions
At operating level similar to Dunelm, private equity
ownership. Biggest Pet Chain in UK. Many similarities to
Dunelm
Employee engagement drives customer engagement –
clear link to NPS. Employee engagement is a journey
and an investment
Services has 2 dimensions, service offering and
unbeatable service – both are key.
4. Appendix
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26. Appendix
1. Service profit chain definition
2. Web Site review
3. Service exemplar case study Zappos
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27. Becoming the No 1 place to work…..
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28. www.petsathome.com
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29. Homepage
Offer messaging and
Delivery options
Links to additional
services:
• Pet Insurance
• Veterinary
services
• Pet adoption
• Grooming services
Loyalty scheme
29

30. Navigation
Multi-coloured navigation.
Image of animal
appears when you
hover over navigation.
30

31. Category Page
Basic shop by category
Free delivery
threshold reminder
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32. Product Lister Page
Basic refinement options
(multiple selection not
available)
Online exclusive offers
Offer lozenges
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33. Delivery Proposition
*Free standard delivery over £29 ends 31st May 2013
Delivery Service
Order Weight
Price
Details
Standard Delivery
Up to 32kg
£4.95
We aim to deliver within 4-6 working days. Items
delivered direct from our suppliers will take up to
the time stated in the product details.
£7.95
Orders must be placed by 4pm previous working
day. Excludes Saturdays, Sundays and Public
Holidays. Orders placed on a Friday will be
delivered on Monday.
£29.95
Charge per order. Standard delivery up to 6
working days. No next day delivery available.
8am - 6pm, Mon to Fri
Next Working Day Delivery
Items weighing 25kg or more
+25kg
Deliver to UK mainland, Northern Ireland and UK offshore island addresses.
Reserve online and pay in store.
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34. Pet Care Advice
Pet Care Advice centre featuring
‘buying guides’, advice
videos, choosing a breed, animal
health etc
34

35. Video Suite
Suite of videos for:
• Products and Services
• Pet Care Advice
• Charity
• Meet the Team
• Your Pet Videos (UGC)
Your Pet Videos –
user generated
content
35

36. Other Services
In store grooming salon
Pet Insurance:
• Dog
• Cat
• Rabbit
In store Vets Surgery
www.companioncare.co.uk
Animal adoption
charity support
36

37. Hitwise Overview Report of www.petsathome.com
Dunelm Mill
12.53% Paid: 87.47% Organic
Dunelm Mill
49.30% New: 50.70% Returning
Dunelm Mill
House and Garden: 10 (0)
Hitwise stats for week ending 11th May 2013
37

38. Hitwise – Visits Overview Report of www.petsathome.com
Overall visits to the site have
grown during the last quarter by
25%
38

39. Key Competitors
Pet Planet
www.petplanet.co.uk
Pet Supermarket
www.pet-supermarket.co.uk
Argos
www.argos.co.uk
39

40. Social Media
Dunelm
Facebook Likes Twitter Followers G+ Fans
44973
4958
554
Pets at Home
Facebook Likes Twitter Followers G+ Fans
31985
10529
NA
40

41. Paid Search & Display
No Paid Search
activity on either
Brand or Non
Brand Terms
No Display or
Retargeting
activity either
Dunelm Mill
House and Garden: 10 (0)
Their only Paid Search
activity is on Google
Shopping
They are loosing traffic
from competitors bidding
on their terms
41

42. SEO Optimisation
Optimised Meta
Data
On-site content –
Buying guides,
Videos, Advice
tips
Keyword rich
footer copy
42

43. High DA and
incoming links –
indicates a
potential link
building strategy
SEO Optimisation
Dunelm
Domain
Authority
55
Pets at Home
Page
Authority
62
Ranking on page
1 for all main
keywords
Total number of
Links to the Site
12735
Domain
Authority
58
Keyword
Pet Bowls
Pet Accessories
Pet Food
Pet Shop
Pet Advice
Dog Leads
Fish Tanks
Pet Gifts
Pet Treats
Pet Toys
Pet Grooming
Total number of
Page Authority Links to the Site
65
48829
Ranking
3
8
1
1
5
1
1
1
1
3
5
43

44. Point of Interest
http://www.bbc.co.uk/programmes/b006mg74/features/pets-at-home
Pets at Home
were on
Watchdog a few
months ago
They were
accused of animal
negligence
They created a
static page on
their site in
response to the
accusations
44

45. Zappos
The story.
Since the online shoe retailer was founded in 1999, the Zappos brand has extolled its “wow”
customer service positioning and a distinct corporate culture.
The challenge.
Tony Hsieh, the chief executive, became a multimillionaire at 24 when he sold a start-up he
had co-founded to Microsoft for $265m. After joining Zappos as an adviser and investor, he
eventually became chief executive. When Mr Hsieh got involved in 1999, annual gross sales
were $1.6m. He had two goals for the first 10 years: reach $1bn in annual sales and get on the
list of best companies to work for.
Culture rules.
Company culture came first in order to maintain passion and excitement. Zappos culture was
shaped by 10 core values on which it hired and fired. While Zappos had a playful side, with
values such as “create fun and a little weirdness”, it pushed performance just as hard with
values such as “do more with less”, and “deliver ‘wow’ through service”. Zappos also had an
unusual recruitment process involving two interviews – one to assess fit with the job and
another to assess cultural fit with the company. All successful recruits had the same five-week
training, including two weeks on the phones in the call-centre. Topics included the emphasis
on customer service and the philosophy behind company culture. Everyone was offered
$2,000 to quit as a test of enthusiasm.
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46. Zappos
Clear communications.
Transparency in dealing with employees, suppliers, investors and customers was a central
tenet. In late 2008, Zappos shed 8 per cent of its workforce. Rather than spinning it as
strategic, Mr Hsieh sent a detailed e-mail to staff on what was happening and why. He also put
the e-mail on his blog so even outsiders had access to the details at the same time.
Mr Hsieh viewed culture- building as an investment. The values, benefits and freedom that
went with it had resulted in a high-energy workplace. Customer service calls could take an
hour, but that was considered as a marketing expense because customers who had a good
experience would tell friends.
Adapting the service model.
Customer service was a core element of the culture. Its free-call number, free shipping and
returns, 365-day return policy and 24/7 availability also set it apart. Zappos employees had no
scripts or call-time metrics, and were empowered to take action to make customers happy.
Initially, Zappos relied on a “drop-ship” model, whereby the supplier sent the shoes to the
customer directly on receipt of information from Zappos, but orders were too often delayed or
lost. So Mr Hsieh switched to an inventory model and invested in a distribution facility, which
greatly helped Zappos deliver on its brand promise.
Another success factor was its relationships with vendors. Zappos built collaborative
partnerships and shared information with vendors in an open and transparent way. They were
able to see inventory levels, sales and profitability, and they helped Zappos plan its business
and made sure they had the right product at the right time.
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47. Zappos
The results.
By 2008, the company hit its goal of $1bn in gross sales and in 2009
Fortune magazine ranked Zappos 23rd on its list of the best
companies to work for. Zappos expanded into clothes and other
categories where customer service could be a differentiator.
Then Zappos was sold to Amazon in late 2009 for $1.2bn. Mr Hsieh
reassured employees and others that it would be business as usual.
Today, Zappos still operates as an independent entity with its brand
and culture intact.
The lessons.
The combination of corporate culture, customer service and supply
chain make Zappos stand apart. The organisation lives and breathes
customer service, which stems from its unique corporate culture.
Zappos understands it must recruit people who can deliver customer
service. As well taking care to hire the right employees, it provides
every recruit with the same basic training. It not only focuses on
customer experience at the front end, but delivers its promise from
the back end. It changed its business model from asset-light to fixedasset investment to deliver its promised “wow” experience.
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