Pets at Home data strategy barking up the right tree

Pets at Home has once again hailed its data-driven marketing strategy for yet another sales surge, with the company predicting turnover will top £2.3bn this year, up from £1.4bn in 2020 thanks to greater use of data insights, increased personalisation and its omnichannel approach.

The move comes as Pets at Home reported group revenue of £677.6m in the 28 weeks to October 7; 18% up on the same time last year. Pre-tax profits of £70.6m more than doubled (up 102%) from the £38.9m it reported last time and the retailer now expects full-year pre-tax profits to come at the top of end of expectations.

The retailer also revealed it now has a 100-strong in-house team working on the Pets at Home digital transformation project Polestar, which aims to connect its data-led customer insights with its products and services across all channels. In the first phase, customers will be able to access all of its products and services through a single login, while its mobile app will also be updated.

Meanwhile, active members of its VIP membership club grew by 13% to 6.8 million, while Puppy and Kitten Club member numbers more than doubled on last year, growing by 107%. Members typically spend a third more each year compared to non-members.

Pet care subscriptions also grew, by 45% year-on-year to more than 1.4 million, and generating more than £110m a year in recurring revenues. Subscriptions now account for about 9% of group revenues. This growth, says Pets at Home, came as it used data insights to identify which customers might take another product or service – and it sees more opportunity in growing subscriptions.

Meanwhile, marketing campaigns with ‘threshold offers’ that optimise incentives based on anticipated spending, have now seen basket spending grow twofold from those who redeem the offer, compared to those who do not receive it. Pets at Home now has a new pet lifetime value model for dogs that it is using to predict full lifetime spend across all major breeds, both in-store and in its vet practices.

The business says it has about 250,000 unique segmentation requests each month which are not only triggering a “significant step up in marketing velocity”, they also lower 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.

Group CEO Peter Pritchard said: “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.

“Our growing, in-house data capability is underpinned by a 50-strong team of colleagues across a range of analytical and CRM disciplines, providing deep, actionable insights across our unique and growing dataset of 8 million pets and their owners.

“While our ability to leverage our data insights will only increase over the coming months, these early indications of the potential for higher levels of engagement and spend are highly encouraging.

“Beyond our CRM activities, we are increasingly using intelligent data to optimise decision-making across the wider business and empower colleagues and partners across stores and veterinary practices.”