Petco is taking steps to refine its digital and omnichannel capabilities as part of its long-term restructuring efforts. The pet health and wellness company aims to improve profitability and customer experience through a multi-phase strategy. This initiative follows significant shifts in leadership and operational adjustments intended to address evolving consumer preferences. As competition in the pet retail industry intensifies, Petco seeks to differentiate itself by focusing on efficiency and product availability.
Six months ago, Petco initiated a phased plan to enhance its retail operations, with the first stage dedicated to strengthening its core business functions. This included leadership changes, store visits, and direct employee engagement to identify key improvement areas. Now, the company is advancing to the second phase, concentrating on merchandising, cost efficiency, and gross margin growth. Similar efforts have been made by competitors in recent years, particularly in response to changing economic conditions. Retailers in the pet industry have increasingly emphasized digital transformation to meet shifting consumer behaviors, aligning with Petco’s current strategy.
How Will Petco Improve Its Operations?
To enhance operational efficiency, Petco is working on optimizing its customer support system, logistics, and vendor partnerships. The company is also implementing measures to reduce shipping costs and improve delivery speed for online customers. By minimizing split shipments and lowering order fulfillment costs, Petco aims to enhance its eCommerce experience. These initiatives reflect broader industry trends where retailers look to streamline operations while maintaining service quality.
Petco is also responding to shifts in consumer demand, particularly as discretionary spending declines. While the company has recorded growth in services and consumables, other categories have experienced lower sales. CEO Joel Anderson emphasized the importance of offering competitive pricing and maintaining a relevant product selection by stating,
“In today’s more challenging economic and consumer environment, we recognize the consumer remains discerning, and it is critical that we always have the right products at the right price.”
What Are Petco’s Future Plans?
Starting in late 2025, Petco will enter the third phase of its restructuring plan, which will focus on revenue growth. The retailer intends to enhance customer communications, introduce exclusive products, and expand its services, including veterinary care and grooming. Additionally, Petco plans to revisit and scale its membership program by 2026 to reinforce customer engagement.
By leveraging both physical and digital channels, the company aims to create a seamless shopping experience. Anderson highlighted these upcoming initiatives, stating,
“We will also look to enhance our omnichannel capabilities and digital experience to stimulate growth, including revisiting and scaling our membership program in 2026.”
Petco’s restructuring efforts coincide with broader trends in the retail industry, where businesses are adapting to an increasingly digital marketplace. Many retailers have sought to improve logistics and customer engagement through better eCommerce strategies. Petco’s planned enhancements, particularly in improving delivery efficiency and product selection, align with these industry-wide shifts. The company’s ability to execute these strategies effectively will determine its competitive standing in the evolving pet retail sector.
