Petco Sharpens Focus on Digital Experience Amid Brand Reinvention

Petco is working to enhance the omnichannel capabilities and digital experience it offers customers as part of “Phase 2” of its effort to reinvent its brand and position itself to regain market share.

The pet health and wellness chain began this phased process six months ago, Petco CEO Joel Anderson said Wednesday (March 26) during the company’s quarterly earnings call.

In Phase 1, the company focused on restoring its “retail fundamentals.” This project was helped by changes to its leadership team and by Anderson visiting Petco stores and distribution warehouses and holding small group listening sessions and larger town halls.

Now, in Phase 2, Petco is working on merchandising, cost reduction and gross margin improvement, Anderson said.

“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,” Anderson said.

In the fourth quarter, while Petco saw growth on a two-year basis in services and in consumables, it saw declines in discretionary categories, according to a presentation released Wednesday in conjunction with the call.

Petco is also working to drive efficiencies throughout the organization, an effort that Anderson said will improve both profitability and customer satisfaction.

The retailer is optimizing its customer support infrastructure, which includes its call center, vendor partnerships and physical locations. It’s also taking actions in the eCommerce operations to increase shipping efficiencies and delivery speed by, for example, reducing the number of split shipments and the cost per order.

“We’re taking actions to improve overall customer satisfaction, including reducing click-to-delivery time for our eCommerce customers, and increasing visibility into order tracking for omnichannel customers,” Anderson said.

Petco will begin Phase 3 in late 2025 by targeting revenue growth. The company will test initiatives like communicating with customers in a more cohesive way, sourcing products that are unique to Petco, and continuing to invest in services like grooming and veterinary care, which are the fastest-growing segment of the pet category.

“We will also look to enhance our omnichannel capabilities and digital experience to stimulate growth, including revisiting and scaling our membership program in 2026,” Anderson said.

Anderson joined Petco as its new CEO and a member of its board of directors in July, a day after stepping down as president, CEO and board member at retailer Five Below.

When announcing the CEO transition, Glenn Murphy, executive chairman of the board of directors at Petco, said he looked forward to working with Anderson in the company’s initiatives “to improve operating and financial results.”