One-stop shopping

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petbarn_300Mega-markets, where all your requirements can be met in one place, is a business model that’s becoming commonplace. Is it something an individual practice can aspire to? By Amanda Scotland.

When you enter the super-sized Petbarn store at West Gosford on the Central Coast of New South Wales, the first thing that hits you is the wide-format supermarket aisles, cutting across pet-friendly polished concrete and helpfully labelled by animal. To your right, the wall of toys has been segmented into toys for chasing, tugging, chewing, snuggling, and an interesting category of enrichment toys simply known as ‘IQ’. Turn your head to the left however and you’ll see something even more surprising. Just past the rows of aquariums, shying away behind a rack of pet-themed greeting cards, is one of Australia’s first in-store veterinary surgery.

Late last year the ink was still drying on the $338 million deal that would see Petbarn come under the wing of Greencross to form one of Australia’s largest pet care companies. It creates a model similar to the successful Banfield/PetSmart model in the US, which boasts around 800 in-store pet hospitals across the world’s largest pet retail chain.

With the UK’s Pets at Home enjoying similar success across 100 in-store vet clinics, it seemed an obvious pairing, but the Banfield model has not been without its detractors. With two co-located facilities already up and running and six-to-10 new facilities planned over the next 12 months, what does the future hold for the Greencross/Petbarn partnership in Australia?

Much like its American counterpart, the key driving force behind the Australian merger was not the opportunity to cut costs, but the opportunity to cross-sell across both brands, drawing on Petbarn’s 1.1 million-strong ‘Friends for Life’ member database and the 500,000 strong Greencross database. This is precisely where Banfield has come under fire, with complaints the company has crossed the line with its ‘Optimum Wellness Plan’ and a class action lawsuit targeting Banfield’s aggressive upselling strategies filed at around the same time the Greencross/Petbarn deal was taking place. Dr Glen Richards has been a practising vet surgeon for 26 years and is the founder and managing director of Greencross and a founding director and shareholder of Petbarn.

Dr Richards says the model being established here is very different to that of Banfield, in that the main focus is on high-quality pet care. “We will be developing full-service veterinary hospitals capable of doing high-quality medicine and surgery, located at the front of the Petbarn stores,” says Dr Richards. “I have concerns about pet stores with vet clinics located at the rear of the store as it does not convey the right message to pet owners nor allow easy access for sick pets.” To achieve this, full-service, fully equipped vet hospitals will take up a prominent position over 150-250 square metres in each co-location. Multiple consult rooms with separate dog and cat wards and diagnostic imaging facilities will feature, with easy access at the front of the store to serve emergency cases. “Over the last seven years we’ve developed complementary networks between Petbarn and Greencross, so it was just a sensible decision to merge,” says Dr Richards. “Customers want a trusted adviser in their vet clinic and a trusted adviser in their pet store. They don’t want to be sold too, but see that those people are doing the best they can to look after their pet.” From a sales point of view, Dr Richards says the merged team will seek to engage with pet owners on a longitudinal level to serve both the proactive and reactive sides of vet medicine. A steady stream of foot traffic from the retail side will boost services in grooming, dental hygiene and behaviour and puppy training. Dr Richards says the merger will be a reality check for many smaller practices and that competitors will need to work harder than ever to keep their clients happy. “If you’re not focused on client relationships, you need to pick your act up,” he says. “I tell veterinary friends of mine all the time, ‘we’re not a problem if you’re offering a good standard of service for pet care and client care.’ Boutique vet clinics have the opportunity to build very deep relationships so they shouldn’t have too much concern with our plans.”

As pet owners become more deeply engaged with their pets, Dr Richards believes they have come to expect a higher standard of service. “Pets are moving from the backyard to the bedroom and their owners expect friendly and professional staff in the practices they go into. You’re dealing with people that see their pets as family members. You need to match or even exceed their expectations.” This means not only investing in customer service, but investing in equipment and facilities, and supporting staff in furthering their clinical education. Dr Richards believes the Greencross/Petbarn model will attract the next generation of vets who are interested in creating wealth by practising high standards of veterinary medicine through an “owner-like” partnership model. The underlying investment in high-quality equipment and facilities, as well as continuing education programs and HR support, will be paired with employee discount schemes offering retail and veterinary care benefits.

There is no doubt that the one-stop-shop model will make it very easy and convenient for pet owners to do business with the new Greencross/Petbarn family. Large format stores with high visibility on main roads will feed cross-pollination across the 10 trial dual-purpose facilities. Over the next 12 months we will begin to see how Australian pet owners will respond to the new service, although initial reports from the two existing Greencross/Petbarn co-locations suggest take-up will be strong from pet owners. What is clear from the US experience is that long-term success of the partnership will hinge on strict adherence to the ethical, care-centric model and an offering of true value to loyal customers.

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