Chewy Sees Promise in Vet Clinics and Payoff From App Investments

Chewy said its investment in veterinary clinics is helping it attract new customers.

The online pet product retailer released quarterly earnings Wednesday (Aug. 28) showing net sales increasing nearly 3% to $2.86 billion in the second quarter.

CEO Sumit Singh told analysts during an earnings call that the company’s vet care clinics, two of which have opened this quarter, are helping drive sales.

“With each additional week and month of operations across our clinic footprint, we are steadily accumulating data to prove out our initial thesis around Chewy Vet Care,” he said. “Although it is early, the leading indicators are promising. First, Chewy Vet Care is serving as an acquisition funnel with the proportion of net new customers acquired through our clinics, exceeding our expectation.”

In addition, clinic engagement is accelerating the company’s net sales per active customer metrics, bolstered by spending on veterinary services and “strong cross-category shopping behavior,” Singh said.

Many customers are “deepening their commitment to the Chewy ecosystem” by buying food or placing orders from the company’s pharmacy for the first time, he said. Chewy is also seeing a “highly positive” impact on visits to its website after clinic appointments.

“Chewy has seen highly positive, early pet parent interest in Chewy Vet Care,” Mita Malhotra, president of Chewy Health, told PYMNTS earlier this year. “Through our research, we found that customers viewed opening veterinary clinics as a natural extension of the types of services that we should be providing and of what they expect from Chewy.”

Singh said last year that shifts in consumer behavior offer an opportunity for Chewy to stake its position as a leader in the online pet products world. Pet owners are now prioritizing consumables and health products over traditional hard goods.

Also Wednesday, Chewy management addressed the company’s efforts to strengthen customer engagement through its mobile app. Singh said during the call that the company is seeing some early indications that its app redesign efforts are paying off.

“Unique customers who placed orders through our app increased by approximately 13% year over year, with overall mobile app orders increasing approximately 15% year over year,” he said. “We observed both higher units per order and better retention when customers download and use the Chewy app.”