Chewy CEO Sumit Singh Talks 'Pet Parent' Behavior
During a keynote session earlier this week at Shoptalk in Las Vegas, Sumit Singh, CEO of pet brand Chewy, detailed the retailer's success amidst a challenging economic environment. In addition, Singh addressed the growth opportunities that Chewy is targeting, the behaviors it's seeing from its customers (who Chewy affectionately refers to as "pet parents), and his strategy for building the right corporate culture at the online-online retailer.
Here are some highlights from Singh's interview with Phil Wahba, senior writer at Fortune.
On Consumer Behavior in the Pet Category
Singh noted that there are 90 million American households with pets, a number that grew during the pandemic. The core input that Chewy is seeing is that spending on pets is somewhat recession-proof. We treat our pets as family.
"The beauty of being in pet is it's the only category other than baby where people refer to themselves as parent shoppers," said Singh. "We’re not seeing people trade down for pet spending — e.g., pet food."
As for how consumers are purchasing products for their pets, while the e-commerce penetration rates seen during the pandemic were likely unsustainable, digital remains a convenient and viable option for many shoppers. Chewy is successfully tapping into that behavior, eclipsing $10 billion in revenue in its 2022 fiscal year and posting a profit for the first time in its third quarter.
"We believe the scale and convenience of e-commerce, with the superior experience we provide is a strong combination," Singh said.
On the Growth Potential of Pet Insurance
Chewy views the expansion of pet insurance, including the retailer's partnership with leading providers in this space, as an exciting opportunity. Singh noted that the percentage of pet parents in the U.S. with pet insurance (around 3 percent) is much lower than other parts of the world, including the United Kingdom and Australia. He wonders why pet insurance hasn't yet been commercialized in the U.S.
"We have relationships with 21 million customers," Singh noted, an attractive customer base for pet insurance providers to sell to.
Similar to the growth we've seen in retail media networks, pet insurance is an avenue for Chewy to diversify its revenue through something other than the sale of physical products. As such, Chewy has partnered with a leading pet insurance provider — Trupanion, which is an affiliate of the American Pet Insurance Company — to launch CarePlus, an exclusive suite of pet-first wellness and insurance plans.
"We can bring to market a world-class insurance platform," said Singh. "Our goal is to make pet healthcare affordable for pet parents. We're early in the journey, but excited about the mission."
On Having the Right Culture
The final portion of Singh's interveiw touched on leadership. Specifically, the type of culture that he has built, or more accurately maintained, at Chewy.
"Chewy is the journey of a startup becoming a world-class company," Singh told the audience. "A culture of wow. None of the success we’ve had is possible without the culture we’ve built. It's about customer centricity. We’re happy pet parents ourselves. We strive to live up to our mission statement — to be the most trusted and convenient destination for pet parents (and partners) everywhere."
As Chewy has grown very rapidly, Singh has been tasked with maintaining the culture that the company was founded upon. In fact, one of the reasons that Singh was hired as COO in 2017 (before being elevated to CEO in 2018) was to provide discipline and structure to the rapidly scaling organization.
"Our focus on discipline is exemplified by getting big fast, but also fit fast," Singh told the audience. "Don’t get complacent as you get big."
Related story: Chewy Tops List of 100 Fastest-Growing Retailers
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.