The Company: PetSmart
PetSmart operates 1,352 stores and 200 in-store PetSmart
PetsHotels® dog and cat boarding facilities in the United States, Canada and
Puerto Rico. The company provides a broad range of competitively priced pet
products and in-store services including pet adoption, boarding, grooming and
training. PetSmart stores are stocked with more than 10,000 products and the
company is also a leading online provider of pet supplies and pet care
information (About PetSmart).
Company founders Jim and Janice Dougherty introduced their pet
superstore concept as Pacific Coast Distributing, Inc. in 1986. Their first two
stores, originally called PetFood Warehouse, opened in Arizona in 1987. In 2004 the company launched PetSmart®
PetPerks®, a customer loyalty program, to provide pet parents with better
communications and valuable offers (PetSmart History, 2014).
The Challenge:
According to some media repots, the pet-goods retailer has
struggled to turn around its business as sales slumped, while top shareholders
Longview Asset Management LLC and Jana Partners LLC have pushed the company to
explore strategic options, including a sale in 2013-2014. PetSmart, meanwhile,
has been reviewing its capital structure and has said that it looks forward to
engaging with its investors earlier this year. In spring 2014, The Wall Street
Journal reported that PetSmart was holding talks with investment banks (Calia
& Prior, 2014).
One
of the strategic moves to help the retailer was the purchase of Pet360. PetSmart
recently announced a deal to buy online pet specialty retailer Pet360 for $130
million, with the possibility of additional performance-based payments totaling
up to $30 million by the end of 2016. The deal closed this past September (Calia
& Prior, 2014).
What web analytics strategy is PetSmart currently using to help
generate greater online sales of products?
This year, PetSmart
is focusing its customer strategies around three areas: connecting with pet
parents in a personalized way, expanding its products and services, and growing
its most valuable customers.
"Across all of retail, technology is
rapidly changing how customers interact with retailers, and we believe that in
order to stay relevant with our customers, we are going to need to accelerate
our deployment of omnichannel capabilities," said PetSmart CEO David
Lenhardt (Giannopoulos, 2014).
PetSmart is
working on ways to better connect with pet parents. One of the ways the
retailer is doing this is by leveraging its customer data and analytics to
increase personalized connections. With this use of technology, PetSmart will
enhance the customer experience. The company is hoping to link 90% of sales to
individual customers (Giannopoulos, 2014).
"We have the data and we know
that whether it's in our stores, online or through our customer loyalty
program, that personally relevant connections lead to higher levels of customer
engagement and spend," said Lenhardt. "We've been investing in new
capabilities to help us capture and use customer and pet data, and this year,
we will deliver on new methods to use this data to drive growth."
(Giannopoulos, 2014).
Another way the retailer is increasing its
sales is through testing
and building a foundation for future omnichannel growth. Just this year,
customers began to notice these improvements. The company launched a new
website platform during Q1 of 2014. The platform was projected to deliver the
experience that customers expect, including product image zoom, enhanced
natural search performance, improved item comparison tools and better
presentation of item-level content such as videos, reviews and color swatches.
These enhancements are only a benefit for the company if properly measured
using the right web analytics tools. Although the company does not disclose
which tools they use, it can be assumed that they will be measuring metrics
such as time spent on their new page compared to their old platform as well as
click-through rates on optimized product views. More examples of measurements
that PetSmart should be paying close attention to are some common e-commerce
retailer, Key Performance Indicators or KPIs.
For example, it
may be a goal for PetSmart to increase site traffic 50% in the next year with their
new web platform. Relative to this goal, a performance indicator might be the
number of unique visitors the site receives daily or which traffic sources send
visitors (pay-per-click advertising, search engine optimization, brand or
display advertising, or a YouTube video) (Hayes, 2013).
PetSmart is also paying close attention to the
mobile visitor. Earlier this year the company’s redesigned mobile website, which launched this
fall. This is important because customers' use of mobile devices continues to
dramatically increase. Today, about one-third of PetSmart.com visits are via
smartphone, according to Lenhardt (Giannopoulos, 2014).
"We want to be there for our
customers however and whenever they shop, which is why we are excited to launch
an enhanced mobile web experience with expanded shopping tools for our
customers, like product comparisons, brand shops and wish lists, mobile content
for services, adoptions and pet care guides and mobile optimization of our
PetPerks loyalty program and account management," noted Lenhardt.
"This new mobile site will support e-influence and drive mobile e-commerce
conversion." (Giannopoulos,
2014)
Lenhardt’s dedication to expanding mobile
technology and optimizing the company’s mobile website is proof that PetSmart
is moving in the right direction.
Recommended Web Analytic Tools & Tactics:
Goals (hypothetical) that PetSmart should be
looking to accomplish with their recent strategy to embrace technology as it
relates to their website:
Goal 1: Boost sales 10% in the next
quarter. KPI’s- daily sales, conversion
rate, site traffic
Goal 2: Grow regular website traffic
25% in the next year. KPI’s-site
traffic, traffic sources, promotional click-through rates, social shares, and bounce
rates.
Goal 3: Increase conversion rate 2% in the next year. KPIs
include conversion rate, shopping cart abandonment rate, associated shipping
rate trends, competitive price trends.
How can PetSmart measure these goals?
Google Analytics is one of many
tools PetSmart can use to monitor their website data and track KPI’s. One of the benefits of Google Analytics is
that it allows companies both large and small to measure all aspects of their
data as it relates to their website.
Since PetSmart is a major e-commcerce retailer, it is important for the
company to understand what items customers are clicking on, but not purchasing.
Another piece of data that GA can help PetSmart with is “cart abandonment”
statistics. Many retailers today are
losing sales due to items placed in online shopping carts that are ultimately
never purchases. Approximately $4 trillion worth of
merchandise will be abandoned in online shopping carts this year, and
about 63% of that is potentially recoverable by savvy online retailers,
according to BI Intelligence estimates (Smith, 2014).
PetSmart can also use Google’s
Acquisition reports to understand how users are getting to their website and
which ads are most effective. Knowing which channels are driving
traffic and sales means you can focus on the channels that are most effective
for you. Understanding what other websites are linking to you and the
volume of traffic they're driving can help PetSmart understand where
other opportunities may exist.
There are a variety of custom reports and
analytics that can help PetSmart achieve increased sales online. PetSmart seems to have taken a step in the
right direction by embracing new technology as it relates to e-commerce. They recognize the future of their business
is in the hands of consumers who are increasingly looking to the web for many
items, including pet supplies.
References:
About
PetSmart. (2014, January 1). Retrieved December 7, 2014, from
http://phx.corporate-ir.net/phoenix.zhtml?c=93506&p=irol-homeprofile
Calia,
M., & Prior, A. (2014, August 19). PetSmart To Explore Strategic
Alternatives, Including Possible Sale. Retrieved December 8, 2014, from http://www.wsj.com/articles/petsmart-to-explore-strategic-alternatives-including-possible-sale-1408488155
Company
History. (2014, January 1). Retrieved December 7, 2014, from
http://phx.corporate-ir.net/phoenix.zhtml?c=93506&p=irol-timeline
Giannopoulos,
N. (2014, March 24). PetSmart Leverages Analytics for Personalized Experience |
Retail Best Practices | RIS News: Business/Technology Insights for Retail,
Supermarket Executives. Retrieved December 8, 2014, from
http://risnews.edgl.com/retail-news/PetSmart-Leverages-Analytics-for-Personalized-Experience91783
Lazazzera,
R. (2014, June 26). Google Analytics For Ecommerce: A Beginners Guide –
Shopify. Retrieved December 7, 2014, from
http://www.shopify.com/blog/14681601-google-analytics-for-ecommerce-a-beginners-guide
Hayes,
M. (2013, February 21). 32 Key Performance Indicators (KPIs) for Ecommerce –
Shopify. Retrieved December 8, 2014, from
http://www.shopify.com/blog/7365564-32-key-performance-indicators-kpis-for-ecommerce
Souers,
M. (2008, June 3). What Makes PetSmart So Fetching. Retrieved December 7, 2014,
from
http://www.businessweek.com/stories/2008-06-03/what-makes-petsmart-so-fetchingbusinessweek-business-news-stock-market-and-financial-advice
Smith,
C. (2014, November 7). Shopping Cart Abandonment: Online Retailers' Biggest
Headache Is Actually A Huge Opportunity. Retrieved December 8, 2014, from
http://www.businessinsider.com/how-retailers-can-reduce-shopping-cart-abandonment-2014-9#ixzz3LM9h2I74
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