pets at home - a service examplar
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Pets At Home - The No 1 place to work . How did they become such a great place to work and the UK's NO 1 pets retailerTRANSCRIPT
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Service excellence – Pets @ Home
“To be the NO 1 pet shop in the world”
Tim Slade & Saj Bhojani
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Welcome to the No 1 Pet Shop in the world
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Dog Cam
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Agenda
1. Business review
2. No 1 place to work
3. Key Conclusions
4. Appendix
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Formidable business performance consistent revenue & profit growth
2006 2007 2008 2009 2010 2011* 2012 20130
50100150200250300350400 Store Numbers
Stores Vet Practices 2006 2007 2008 2009 2010 2011* 2012 20130
100
200
300
400
500
600
700 Turnover£m
2006 2007 2008 2009 2010 2011* 2012 20130
20
40
60
80
100
120 Profit ( EBITDA )£m
2006 2007 2008 2009 2010 2011* 2012 20130
100
200
300
400
500
600 Gross Debt
Expires 2017
£m
Year ending March 2006 2007 2008 2009 2010 2011* 2012 2013 5 Yr CAGR
Turnover 279.2 306.5 354.6 404.3 467.7 517.8 544.3 598.3 11.0%EBITDA 40.7 46.7 60.7 70 84.3 93 91.7 100.8 10.7%EBITDA Margin % 14.6% 15.2% 17.1% 17.3% 18.0% 18.0% 16.8% 16.8% Stores 173 193 213 232 256 281 313 345 10.1%Vet Practices 36 39 42 51 59 73 92 209
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350 Stores typically out of town settings, 10,000 sq feet.
Pets are the UK’s leading specialist retailer of pet foods, pet related products, accessories and services
Recent operational highlights
• Continued investment in new stores & formats (32 stores in FY12)
• Opening of 2nd distribution centre & Hong Kong sourcing operation
• Expansion of vet practices and grooming salons (18 new grooming salons, 19 instore vet practices)
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Range expansion core strategic driver
Improved good, better, best range expansion in key dog and cat areas including luxury ranges
Expansion is driven further by innovation focus eg specialist shampoos, indestructible dog toys with squeakers that only dogs can hear
Continued investment and strong performance of own brand development e.g. Wainwrights
Web used to drive extended ranges
Pets at Home insurance introduced with pleasing performance. Stand alone website developed.
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Service proposition continues to grow creating a one stop shop
Pets continue to invest in service proposition
92 In care Veterinary practises- Second largest vet chain in the UK
61 Grooming salons – The first national chain of groomers
Services continue the unique opportunity within the Pet space to develop customer engagement
Stylists and vets have the opportunity going forward to provide more general advice on health and wellbeing
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Considerable space given up to services within store estate (delivers authority, expertise and lock in)
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Service proposition given strong home page presence
Links to additional services:• Pet Insurance• Veterinary services• Pet adoption• Grooming services
Links to additional services:• Pet Insurance• Help Advice
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Service leverages multi channel – online nutrition booking system
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Accelerating ecommerce growth via range, services & acquisition
eComm growth circa 28.5% LFL
Visitor numbers reaching 1.5m per month/4week period
Significant investment in on site UGC through video channel – also includes Pet Care videos from pets….used to drive specialist credentials
Extended ranges continue to grow on site.
Delivery to store trial completed, intention to roll out this service in forthcoming year. This would be on top of reserve and collect
Dec 2012 saw the acquisition of Ride Away, a significant ecommerce business in a £2.8bn equestrian market. This enhances specialist credentials, the ecommerce offer and fits Pets values and ethos
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Future growth opportunities identified including a loyalty programmeFollowing extensive customer research and analysis of
retail loyalty schemes – loyalty identified as a key benefit for existing customers
Nov 2012 saw launch of Pets at Home VIP (Very important Pets) which rewards loyalty by earning Lifelines for nominated animal rehoming charities.
The lifelines earned by customers swiping their card which turn into financial rewards for nominated rehoming charities.
Initial sign up and customer reaction to club has been positive and beyond expectation. Over 1 million sign ups now
Internal belief is the VIP club will have a significant role to play in the future of the business…..presumably through data collection of customer purchase behaviour to understand RFM value
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Employee engagement seen as a critical factor to business growthCirca 6000 colleagues, consistent rankings in 25
Best Big companies to work for. Including NO 1
Simple, easy to understand set of values – clearly visible within the business
Unique relationship with colleagues and pets (owners and products) Colleague turnover less than 20%
Structured training programme for every colleague, with choice to specialise via Pets at Home academy.
Significant commercial investment in delivering employee engagement & removal of task
NPS now regularly 80% and higher
We’re All Ears is the internal employee engagement measure/process – last measured at 91%
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Giving something back
Central and local relationships with Scouts, Brownies and Guides – includes free animal workshops to encourage animal care badges.
Schools – Stores offer school visits for children to learn about animals
Support adoption for Pets – Pets at Home work with a national Pets charity helping the rehoming of pets
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Agenda
1. Business review
2. No 1 place to work
3. Key Conclusions
4. Appendix
At operating level similar to Dunelm, private equity ownership. Biggest Pet Chain in UK. Many similarities to Dunelm
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Becoming the No 1 place to work…..
• 1st place in the Sunday Times Top Big Companies to Work in 2013, 2nd in 2012
• Employee engagement for Pets at Home is about having a business that is
• full of people that are really ‘up for it’
• passionate about what they do,
• understanding how and what they do fits in with the big scheme of things
• are real advocates for the business.
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Becoming the No 1 place to work…..
Employee engagement is a long game. Has taken 8 years to get to No 1
Journey had a very clear goal of creating an amazing place to work, through 3 core areas
1. Recruit the right people• Get pets and get retail
2. Train them and give them the right tools and skills they need to do their jobs well• Everyone that works at Pets at Home has access to a wide variety of specialist training
courses including pet nutrition, microchipping, grooming and the legally recognised Suitably Qualified Person (SQP) qualification, enabling them to dispense licensed flea and worm treatments
3. Reward and recognise them• Bonus, pay and visible recognition
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Becoming the No 1 place to work…..through a balanced workforce
• Whilst 92% of their employees are pet owners it’s not a prerequisite to work for Pets at Home.
• Must get pets – not necessarily own a Pet
• Being good with people and willing to do the hard work that is involved with being in a retail environment equally important
Therefore, that’s the balance that they strive to identify in the people that they hire.
• Their model, a la the Service Profit Chain is recruit the right people create a great place to work AND
they will deliver great service to their customers and that will put money in the till.
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Employee engagement delivers hard benefits in retention & recruitment
• 8 years ago labour turnover was over 70%
• Recruitment costs were over £300,000 per year on recruiting new retail management.
• Today, stores has doubled and they only spend £30,000 per year on recruitment costs because turnover has plummeted.
• Internal promotion is encouraged with 90% or more of assistant store managers and area managers rising through the ranks.
.
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Employee engagement tactics
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Employee engagement tactics
1. Pay linked to training and service
2. Clear team bonus schemes
3. Significant training investment• Expert badges• Pet well being courses• H&S courses
4. 97% of employees own a pet – in head Office colleagues allowed to bring Pets to work
5. Birthday off (in-store and head office)
6. Allowed 1 days off per annum to work in a local charity
7. One of the most powerful ways to recognise people were hand-written notes.
8. 25% staff discount
9. Treats – access to a staff discount scheme to access discounts on insurance, holidays etc10. Ethical approach to corporate social responsibility – eg Pet adoption scheme
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Agenda
1. Business review
2. No 1 place to work
3. Key Conclusions
4. Appendix
At operating level similar to Dunelm, private equity ownership. Biggest Pet Chain in UK. Many similarities to Dunelm
Employee engagement drives customer engagement – clear link to NPS. Employee engagement is a journey and an investment
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Key Conclusions - becoming NO 1
1. To be No 1 you need to be No 1 at product and service offering
2. Service offering = 2 different elements or dimensions• Services offered as part of value proposition (Vet service or M2M)• Services to customers (Customer First)
3. Value added services/ A service offering enables • Differentiation• Increases share of wallet (customer lifetime spend)• Brand authority and expertise
4. To deliver a great service to customers you need a highly engaged colleague workforce• Motivated• Satisfied• Understand business and culture• Rewarded
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Agenda
1. Business review
2. No 1 place to work
3. Key Conclusions
4. Appendix
At operating level similar to Dunelm, private equity ownership. Biggest Pet Chain in UK. Many similarities to Dunelm
Employee engagement drives customer engagement – clear link to NPS. Employee engagement is a journey and an investment
Services has 2 dimensions, service offering and unbeatable service – both are key.
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Appendix
1. Service profit chain definition
2. Web Site review
3. Service exemplar case study Zappos
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Becoming the No 1 place to work…..
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www.petsathome.com
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Offer messaging and Delivery options
Loyalty scheme
Links to additional services:
• Pet Insurance• Veterinary
services• Pet adoption• Grooming services
Homepage
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Navigation
Image of animal appears when you
hover over navigation.
Multi-coloured navigation.
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Category Page
Basic shop by category
Free delivery threshold reminder
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Product Lister Page
Basic refinement options (multiple selection not
available)
Offer lozenges
Online exclusive offers
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Delivery Proposition
*Free standard delivery over £29 ends 31st May 2013
Delivery Service Order Weight Price Details
Standard Delivery8am - 6pm, Mon to Fri
Up to 32kg £4.95 We aim to deliver within 4-6 working days. Items delivered direct from our suppliers will take up to the time stated in the product details.
Next Working Day Delivery £7.95 Orders must be placed by 4pm previous working day. Excludes Saturdays, Sundays and Public Holidays. Orders placed on a Friday will be delivered on Monday.
Items weighing 25kg or more +25kg £29.95 Charge per order. Standard delivery up to 6 working days. No next day delivery available.
Deliver to UK mainland, Northern Ireland and UK offshore island addresses.
Reserve online and pay in store.
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Pet Care Advice
Pet Care Advice centre featuring ‘buying guides’, advice videos,
choosing a breed, animal health etc
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Video Suite
Suite of videos for:• Products and Services• Pet Care Advice• Charity• Meet the Team• Your Pet Videos (UGC)
Your Pet Videos – user generated
content
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Other Services
In store grooming salon In store Vets Surgerywww.companioncare.co.uk
Pet Insurance:• Dog• Cat• Rabbit
Animal adoption charity support
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Hitwise Overview Report of www.petsathome.com
Dunelm Mill12.53% Paid: 87.47% Organic
Dunelm Mill49.30% New: 50.70% Returning
Dunelm MillHouse and Garden: 10 (0)
Hitwise stats for week ending 11th May 2013
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Hitwise – Visits Overview Report of www.petsathome.com
Overall visits to the site have grown during the last quarter by
25%
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Key Competitors
Pet Planet www.petplanet.co.uk
Pet Supermarketwww.pet-supermarket.co.uk
Argoswww.argos.co.uk
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Social Media
Dunelm
Facebook Likes Twitter Followers G+ Fans44973 4958 554
Pets at Home
Facebook Likes Twitter Followers G+ Fans31985 10529 NA
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Paid Search & Display
Dunelm MillHouse and Garden: 10 (0)
No Paid Search activity on either
Brand or Non Brand Terms
No Display or Retargeting
activity either
Their only Paid Search activity is on Google
Shopping
They are loosing traffic from competitors bidding
on their terms
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SEO Optimisation
Optimised Meta Data
On-site content – Buying guides, Videos, Advice
tips
Keyword rich footer copy
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SEO Optimisation
Dunelm
Domain Authority
Page Authority
Total number of Links to the Site
55 62 12735
Pets at Home
Domain Authority Page Authority
Total number of Links to the Site
58 65 48829
Keyword RankingPet Bowls 3
Pet Accessories 8Pet Food 1Pet Shop 1
Pet Advice 5Dog Leads 1Fish Tanks 1Pet Gifts 1
Pet Treats 1Pet Toys 3
Pet Grooming 5
Ranking on page 1 for all main
keywords
High DA and incoming links –
indicates a potential link
building strategy
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Point of Interest
http://www.bbc.co.uk/programmes/b006mg74/features/pets-at-home
Pets at Home were on
Watchdog a few months ago
They were accused of animal
negligence
They created a static page on
their site in response to the
accusations
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ZapposThe story.Since the online shoe retailer was founded in 1999, the Zappos brand has extolled its “wow” customer service positioning and a distinct corporate culture.
The challenge.Tony Hsieh, the chief executive, became a multimillionaire at 24 when he sold a start-up he had co-founded to Microsoft for $265m. After joining Zappos as an adviser and investor, he eventually became chief executive. When Mr Hsieh got involved in 1999, annual gross sales were $1.6m. He had two goals for the first 10 years: reach $1bn in annual sales and get on the list of best companies to work for.
Culture rules.Company culture came first in order to maintain passion and excitement. Zappos culture was shaped by 10 core values on which it hired and fired. While Zappos had a playful side, with values such as “create fun and a little weirdness”, it pushed performance just as hard with values such as “do more with less”, and “deliver ‘wow’ through service”. Zappos also had an unusual recruitment process involving two interviews – one to assess fit with the job and another to assess cultural fit with the company. All successful recruits had the same five-week training, including two weeks on the phones in the call-centre. Topics included the emphasis on customer service and the philosophy behind company culture. Everyone was offered $2,000 to quit as a test of enthusiasm.
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ZapposClear communications.Transparency in dealing with employees, suppliers, investors and customers was a central tenet. In late 2008, Zappos shed 8 per cent of its workforce. Rather than spinning it as strategic, Mr Hsieh sent a detailed e-mail to staff on what was happening and why. He also put the e-mail on his blog so even outsiders had access to the details at the same time.Mr Hsieh viewed culture- building as an investment. The values, benefits and freedom that went with it had resulted in a high-energy workplace. Customer service calls could take an hour, but that was considered as a marketing expense because customers who had a good experience would tell friends.Adapting the service model.Customer service was a core element of the culture. Its free-call number, free shipping and returns, 365-day return policy and 24/7 availability also set it apart. Zappos employees had no scripts or call-time metrics, and were empowered to take action to make customers happy.Initially, Zappos relied on a “drop-ship” model, whereby the supplier sent the shoes to the customer directly on receipt of information from Zappos, but orders were too often delayed or lost. So Mr Hsieh switched to an inventory model and invested in a distribution facility, which greatly helped Zappos deliver on its brand promise.Another success factor was its relationships with vendors. Zappos built collaborative partnerships and shared information with vendors in an open and transparent way. They were able to see inventory levels, sales and profitability, and they helped Zappos plan its business and made sure they had the right product at the right time.
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Zappos
The results.By 2008, the company hit its goal of $1bn in gross sales and in 2009 Fortune magazine ranked Zappos 23rd on its list of the best companies to work for. Zappos expanded into clothes and other categories where customer service could be a differentiator. Then Zappos was sold to Amazon in late 2009 for $1.2bn. Mr Hsieh reassured employees and others that it would be business as usual. Today, Zappos still operates as an independent entity with its brand and culture intact.
The lessons.The combination of corporate culture, customer service and supply chain make Zappos stand apart. The organisation lives and breathes customer service, which stems from its unique corporate culture.Zappos understands it must recruit people who can deliver customer service. As well taking care to hire the right employees, it provides every recruit with the same basic training. It not only focuses on customer experience at the front end, but delivers its promise from the back end. It changed its business model from asset-light to fixed-asset investment to deliver its promised “wow” experience.