Chewy Focuses on Data-Driven Decisions in Q2
Chewy continues to make headway as a public company by making “disciplined data-driven decisions,” said Sumit Singh, CEO of the online retailer during the company’s Q2 2019 results earning call with investors.
Chewy reported net sales of $1.15 billion for its second quarter ending Aug. 4, an increase of 43 percent compared to $805.6 million in the year-ago period.
As part of its efforts to manage investments across its current and future marketing channels, Chewy launched a new data management platform (DMP) in the second quarter.
“Given the rapid and consistent payback levels from our customers, we strategically invest free cash flow in new customer acquisition marketing,” Singh said. “We are disciplined in how we deploy this capital, closely monitoring key metrics like acquisition cost and lifetime value.”
During the second quarter, Chewy consolidated all customer pet and veterinarian data into a single master dataset to “create a proprietary customer data platform allowing for clean, reliable and consistently formatted data,” Singh said. “Our marketing and merchandising teams will utilize this data for enhanced customer targeting and segmentation across all our platforms on site and mobile app.”
To improve the shopping experience for pet owners, Chewy launched new features on its mobile app platforms in the second quarter. Features include voice search and navigation redesigns.
Chewy’s customer base continues to grow, according to Singh. Active customers grew 3.4 million year-over-year to 12 million customers. Net sales per active customer increased about 10 percent to $352, up from $320 in the year-ago period.
Autoship customer sales reached $799.6 million, an increase of 49 percent compared to $538.4 million in the year-ago period, outpacing growth in overall net sales, according to Singh. Sixty-nine percent of the company’s net sales came from Autoship.
“It was our hypothesis that with our way of engaging with our customers, the tactics that we use, the way we educate them, the products we develop, and the way we communicate with them, the response pattern for Autoship should even be stronger for healthcare, and we’re seeing that come through,” Singh said.