Pet supplies retailer Pets at Home claims ramping up its personalisation efforts is helping accelerate the brand’s “marketing velocity”, as it cements its faith in CRM.

The business says the speed at which it now iterates, supported by approximately “250,000 unique segmentation requests each month” is facilitating a “significant step up in marketing velocity”, while also lowering the cost of customer acquisition.

During the past six months, Pets at Home has launched over 300 targeted marketing campaigns and claims to have experienced a threefold increase in “supplier-driven communications”, improving response rates and marketing efficacy.

The number of the retailer’s active VIP loyalty members increased by 13% to 6.8 million over the 28 weeks to 7 October. The number of members shopping across more than one channel rose by 19% year-on-year, accounting for more than a quarter (27%) of members.

Pets at Home’s Puppy and Kitten Club membership grew 107% year-on-year, with members spending more per year compared to non-members. Meanwhile, petcare subscriptions grew 45% year-on-year to over 1.4 million, generating more than £110m in annualised recurring revenue. Subscriptions now account for 9% of group revenue.

How Pets at Home grew its VIP Club by 1.5 million members

“Stronger than anticipated growth in new pets over the past 18 months continues to lead to a significant increase in new customers across our loyalty clubs, subscription platforms and veterinary practices, and has strengthened the outlook for growth across the UK petcare market,” said group CEO Peter Pritchard today (11 November) in the company’s 2022 interim results.

Pritchard highlighted three key factors in Pets at Home’s strong performance: the growth in pet ownership, the brand’s omnichannel structure and the use of data-driven insights.

The retailer reports using data insights across existing subscribers to identify more customers with a propensity to take additional products or services across the group, with Pets at Home describing subscription growth as a “significant opportunity”.

The brand also points to its enhanced “threshold offers” campaign, which achieved a two-fold increase in basket spend from customers redeeming the offer compared to those not targeted.

Furthermore, a recent campaign targeting customer churn, which used an “always on” predictive model to target customers with relevant messages, saw more than two-thirds of reactivated customers return for a second time outside the offer.

Digital transformation agenda

Pets at Home credits its “omnichannel approach” to retailing with positioning the business for “sustainable growth”.

“Our omnichannel petcare model, providing pet owners with everything they need through the lifetime of their pets, enables us to access all components of spend within this growing market,” said Pritchard.

Total group revenue for the first half of 2022 grew 18% to £677.6m, with omnichannel sales up 21.5% compared to 2020 and 101.4% on a two-year basis.

The retailer highlighted the success of its use of data to optimise decision-making. An example is Pets at Home’s new pet lifetime value model, incorporating retail and veterinary data specific to over 4 million dogs, which is being used to predict the full lifetime spend across all major breeds. This insight is being used to improve planning of sales, resource and treatments at a veterinary practice level.

In addition, the retailer has begun profiling customer baskets to determine substitute and complementary products at individual store level in order to optimise its inventory.

During the period Pets at Home also commenced its ‘Project Polestar’ digital transformation plan. Spanning a 100-strong team of in-house analysts, developers, testers and customer experience experts, Polestar is intended to marry data-led insights on customers’ petcare needs with personalised journeys across a digital platform that “seamlessly connects” the retailer’s ecosystem of products and services.

The idea is to rollout a single login for customers to all Pets at Home’s products and services, as well as to launch a new iteration of its mobile app.

Pets at Home also plans to focus on convenience through its one-hour click-and-collect service and contactless collection service, which has been extended to 360 stores.

Source Article