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Chewy Dominates Pet E-Commerce, Taking The Lead Over Amazon

In the largest e-commerce acquisition in history, PetSmart bought Chewy, Inc. for $3.35 billion. What made the pet e-etailer worth the steep price? What can brands learn from them?

Chewy is doing it right. Not only have they been able to establish an influential presence among pet owners and retailers, but they’ve also positioned themselves as Amazon’s biggest contender in the category. There’s a lot that brands can learn from this successful company. Take a closer look at Chewy’s top three strategies:

  1. Own the ecosystem: Think about nurturing the environment where consumers learn about different brands and products.
  2. Consider the Lifetime Value of a Customer. (This is a big one for Chewy.) Unlike many companies, they don’t focus on dated metrics. They think about how they can capture customers and hang on to them.
  3. Grow by means of independent brands. Of the 500 brands Chewy carries, many are indie brands. The pet food space is growing because of the smaller, independent players, not the bigger conglomerates.

Brands of all sizes can adopt these ways of thinking and, ultimately, have the chance to be a frontrunner in their own arena.

Additionally, Chewy set out to learn about their customers. They discovered that 81% of pet care searches on Google start off with branded terms, and therefore, tailored their own search strategy to reflect their audience’s behavior. They also made sure to offer competitive shipping deals to sustain its lead over Amazon.

“In a winner takes all environment that is e-commerce right now, with Amazon literally ticking off every category, Chewy has come in and they’ve really really attuned their offering to how consumers shop,” says Maureen Mullen, Chief Strategy Officer and Co-Founder of L2 Inc.

Learn more from Chewy’s lead here.