A shopper wearing a protective mask pushes a dog in a cart outside a Walmart store in Lakewood, California, July 16, 2020.
Patrick T. Fallon | Bloomberg | Getty Images
Walmart is jumping into the burgeoning pet telehealth market.
The mega-retailer has inked a deal with veterinary telehealth provider Pawp to offer Walmart+ subscribers access to the startup’s membership for a year, the companies confirmed to CNBC.
Unlimited access to veterinary telehealth via video or text will be available to Walmart+ subscribers beginning Tuesday when Walmart is expected to announce the partnership publicly. Remote veterinarian visits are growing industry wide as consumers seek convenience, but some vets say the practice could be risky for pets.
The offer will be available for a limited time, Walmart said. Walmart+ subscribers will have until Nov. 19 to opt in.
The terms of the deal weren’t disclosed. Pawp’s annual membership starts at $99.
Walmart’s foray into veterinary telehealth comes as the company looks to deepen loyalty with shoppers, attract and hold on to higher-income customers and better compete with Amazon by making its subscription service more valuable with the addition of perks.
Walmart+ costs $98 annually, or $12.95 a month. Similar to Amazon Prime, the Walmart service gives members access to unlimited free deliveries and a range of other benefits, such as free access to Paramount+ and discounts at the gas pump.
Amazon Prime, which costs $139 annually or $14.99 monthly, offers its own partnerships, as members currently get free access to GrubHub+ for a year, along with other perks such as photo storage and discounts on prescriptions. By adding Pawp to its subscription, Walmart hopes to keep its membership service competitive with Amazon Prime.
“It’s undeniable that over the past decade, we started thinking and looking at pets as part of the family,” Pawp’s CEO Marc Atiyeh told CNBC. “[Walmart has] a very strong thesis around the pet category and yes, they want to be a big player in pet care and pet health in general, and Pawp really allows them to leapfrog the competition and do something that none of the other players have done.”
Promotional image from Pawp.
The deal comes as the $123.6 billion U.S. pet market explodes, with more and more American households shelling out big bucks to keep their furry family members healthy and happy.
The U.S. market is expected to grow to $200 billion by the end of the decade and pet health care is driving that boom, according to research from Bloomberg Intelligence.
“During the pandemic there was a huge number of pet adoptions and even more important than just the numbers is how people are treating their pets. Pets are becoming part of the family, people are spending on their pets and spending on their pet’s health care,” Ann-Hunter Van Kirk, a senior biopharmaceutical analyst with Bloomberg Intelligence, told CNBC.
When an animal had a serious health concern or life-threatening disease in the past, it was common to put the pet down, but now, people are often willing to spend what’s necessary to keep them alive, said Van Kirk.
She said Walmart’s partnership with Pawp “makes perfect sense” and shows how eager retailers are to grow their share of the pet market.
As Amazon has deepened its investments into human health, including through its $3.9 billion acquisition of primary-care provider One Medical, Walmart has been growing its pet business. It’s already one of the larger players in pet food, prescriptions, insurance and hard goods such as toys and beds.
Walmart’s expansion into pet telehealth signals the largest U.S. retailer is ready to grow its share of the market.
“[Walmart] has become the one-stop destination for all the needs of pet parents,” a company spokesperson told CNBC. “By providing simple, convenient shopping and affordable solutions to take care of pets across all areas — from food, treats, toys, apparel, durables and services — Walmart delivers real value, especially during this inflationary time.”
The telehealth visits can be used to address “many common concerns,” such as allergies, digestive issues or “light limping,” the spokesperson said. The service can also be used for follow-up care.
Traditional pet-only retailers such as Chewy and Petco have already been investing in pet health care to better compete with big-box stores. Long term, it will be a key factor in whether they can grow and make higher profits over time.
A Walmart logo seen from the parking lot of its store in Bloomsburg, Pennsylvania.
Paul Weaver | SOPA Images | Lightrocket | Getty Images
Walmart’s partnership with Pawp will allow it to better compete with Amazon and could boost sales of its pet products. The deal will also solve a crucial problem for Pawp: customer acquisition.
Walmart has yet to publicly disclose its Walmart+ subscriber numbers, but Morgan Stanley estimates membership has reached 19.3 million and is steadily growing, according to an April research note.
Industry insiders have pointed to gaining new customers as one of the steepest hurdles pet telehealth providers must overcome to scale their businesses, because the practice is still new, and its value proposition can be limited.
Pawp, which has raised $27.5 million in funding since its inception in 2020, according to Crunchbase, also doesn’t share its membership numbers. But it will now have access to millions of potential customers through the partnership.
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