With 232.1 million Americans having Internet access at home or at the office, according to Forrester Research, a growing number of online petfood and pet product retailers are popping up in hopes of finding more success among pet owners, according to an article on WSJ.com.
Online pet supply retailers like PetFlow.com, MrChewy.com and Wag.com are among those that have emerged in recent years thanks to changes in Internet commerce, online pet retailers say, as well as reduced marketing costs and consumers' desires for convenience. In fact, it cost an online retailer three to five times as much to launch a decade ago, said Brian Walker, online-commerce analyst for Forrester Research.
So, following the failure of Pets.com, a petfood start-up founded in 1998 that raised US$110 million and went public in 2000 before going out of business shortly after, PetFlow was founded in 2010 after raising US$10 million in venture capital. The company's co-founder, Alex Zhardanovsky, said the company now ships one million pounds of petfood per month, and he expects the company will break even by the second quarter of 2012 with sales of US$30 million, up from US$13 million in 2011. PetFlow also stopped using its third-party storage and distribution warehouse in 2011 because Zhardanovsky said it would be too costly as PetFlow ships greater volumes of petfood. The company instead now leases a 65,000-square-foot facility in Cranbury, New Jersey, USA, and said it also plans to seek another round of venture funding in the next year to continue operations.
PetFlow, Wag, launched in July 2011, and Mr. Chewy, launched in September 2011, all say they differ from Pets.com because they focus on convenience, rather than price, by carrying mostly higher-end, premium dog foods that have a higher margin. Traditional retailers like PetSmart Inc. and Walmart have also expanded higher-end offerings online, with estimates that US online sales of pet supplies will reach US$4.8 billion by 2015, up from US$2.5 billion in 2011, according to Forrester.
"There are going to be some 99-cent cat food, dog food, lower-price-point items that may not make sense for us to carry online," said Ravi Jariwala, Walmart spokesman. "We'll bundle them together, so you might buy a six pack."
For more about sustainability in petfood, watch Jan Hoijtink's Petfood Forum 2010 PowerPoint, "Corporate social responsibility: from whim to a matter of strategy."
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