Who inspires you? Six years ago Ryan Cohen’s dog, Tylee, inspired him to launch a new startup, Chewy. Today, PetSmart bought Chewy for $3.35 billion - the biggest e-commerce acquisition in history.
How did it happen? In 2011 Ryan and his co-founder Michael Day were struggling with their startup - an online jewelry site. Nothing was working and that’s when Ryan thought ‘This jewelry idea - we’re not passionate about what we’re doing.”
That’s when Ryan looked at his poodle, Tylee and thought “She’s my No.1”. That’s when he realized he was a “Pet Parent” who would spend on premium food and products for his dog.
Surely if Pet Parents like him were willing to spend on the best products, they would also love the best service? “So I was going to the pet store and realized the market online was really under-penetrated. This is a much better opportunity.’
This was something he could get passionate about: “I understand the customer - because it’s myself. So we built the company.”
Ryan and Michael sold all their jewelry inventory at a loss, scraped together their last $50,000 and launch Chewy - as a “Zappos on steroids”.
As Ryan says: “From the beginning, we came in saying that we want to provide pet parents with the most amazing customer experience. Period.”
While the food they offered on their website was really no different from what pet owners could buy in stores, the difference was in the service.
The two answered customer calls themselves, and taking no salaries to begin with, they spent their money hiring “Chewtopians” - who they explained to their customers were “pet-loving, adventure-seeking, silly hat wearing folks whose sole mission is to enrich the bond between you and your pets.”
In February this year, People Magazine published a story of a pet owner, Sheree Flanagan, who told the story of what happened when her 15-year old cat, Thor, died. She called the Chewy service number to see if she could return her unused pet food.
Sheree ended up on the line to a Chewtopian, Ashley: “Ashley was amazing. She told me she had a cat put down and she really understood. I kept saying that I didn’t mean to bother her and she kept saying ‘No, this is important. Tell me more.’”
Not only did Sheree get a full refund, but the next day a florist van showed up at Sheree’s home with a large bouquet and a note of condolence.
Sheree’s husband wrote back: “My wife has been taking their loss especially hard, and when we received the flowers we decided it was enough for us both to decide to stop shopping around and give Chewy all our future business.”
Kelli Durkin, Chewy’s VP of customer service, said they created a WOW department that sends out cards to customers for life events from birthdays to weddings, to illnesses to deaths soon after the company started. She says “We don’t feel we’re talking to customers. We are talking to pets’ parents. We want to hear the good and the bad. We are feeding their children. We are part of their families.”
Today, every Chewy customer gets a handwritten thank you card in the mail. All get entered into a lottery to win one of 700 weekly hand-made oil paintings of their pet (Chewy now has 200 full-time portrait artists). The company also has a 40-strong TV crew with 3 sound stages producing pet-care tutorials for the Chewy YouTube channel.
As a result of their incredible service, Chewy’s sales have grown exponentially - from $26 million in 2012 to $900 million in 2016. This year, the company is forecast to reach $1.5 billion in sales, giving it over 50% of the online pet food market.
All this started just six years ago, when looking at his poodle, Tylee, Ryan felt he was more than a pet food shopper. He was a pets’ parent, and wanted to be treated as one.
How are you treating your customer?
As part of a company? Or part of a family?
Today, PetSmart is buying Chewy for $3.35 billion, making this the biggest deal ever in e-commerce - and showing that it pays to care.
“No one cares how much you know, until they know how much you care.” ~ Theodore Roosevelt