retail news in context, analysis with attitude

The Wall Street Journal has an excellent story about how PetSmart, which just a few years ago found its sales eroding, identified e-commerce company Chewy as being at least part of the problem - and then bought the online retailer for $3.35 billion.

While the deal was criticized in many quarters (though not in MNB … we saw the opportunities as well as the challenges), it has worked out: "These days, Chewy is worth about $11 billion, and PetSmart is shaping up to be one of the most successful private-equity turnarounds in history. Chewy went public in June, and its shares have climbed nearly 20% since then in what has been a busy year for initial public offerings and despite the recent tumult in the IPO market. PetSmart’s roughly $10 billion paper gain on Chewy’s first day of trading is one of the largest ever from a private-equity-backed IPO. Its bonds are back near par thanks in part to $826 million of debt reduction fueled by proceeds from the share sale."

One of the keys to making it work: superior customer service.

You can read the entire story here.
KC's View:
I don't think it is an accident that high levels of customer service were critical to making the deal work, since it also is a relentless focus on the customer that ultimately is Amazon's secret sauce. E-commerce isn't just an alternative way to sell stuff … it is an opportunity, because the data is both plentiful and specific, for retailers to gather far more actionable information about their shoppers … and then actually act on it.