Tania Schrey, general manager of e-commerce business Pet Depot, discusses how the Covid-19 pandemic has affected consumer spending and the positive impact the deadly virus has had on the business, which is expected to be profitable in the next six months.
What does your business do?
Pet Depot is an online business that delivers pet food and flea treatments straight to our customers' front door for their cats and dogs. The business started in June last year so we're nearly one year old and we're based Takapuna, Auckland. Our warehouse is located in Hobonsville Point.
What was the motivation for starting it?
In my previous role I was marketing director for the Pet Doctors group of vet clinics. With the really high, and growing, rate of companion animal ownership in New Zealand, we felt it was a really good opportunity to provide a convenience of having pet food and flea treatments delivered. This is a category that can within reason weather economic fluctuations because pets are so important to people that they would quite often give up something for themselves [for their] pets.
It's a very lean team; me and another full-time equivalent split over two different roles, then we have our third party logistics partners that pick, pack and dispatch our orders and an IT partner who manages our system requirements.
How has the Covid-19 crisis impacted the business?
We've noticed an increase in our sales. We were really fortunate that the Ministry of Business, Innovation and Employment granted us essential service status during level 4 lockdown, so we've used this time to really connect with our customers and we've been doing free delivery on all of our orders until the end of May to help people out. We've also introduced laybuy for those who require a bit extra time to pay for their products.
From our perspective, this has been a really good opportunity for us to service people while they are in their bubbles and get people that haven't previously shopped online for these products to give it a go. We're finding that some of the new people to use online shopping are quite enjoying the experience.
Looking at some of the delivery addresses coming through, we're now delivering to retirement villages and are getting calls from people who aren't familiar with shopping online. We're getting to communicate with our customers regularly which is really nice for an online business. We're certainly picking up new customers and we are seeing growth prior to lockdown.
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We're seeing growth for a few reasons, obviously people have restrictions on their lives and having to stick in their bubbles, but also because we sell products that aren't available in supermarkets, as we do food for prescription diets and specialty premium food.
How have consumers' spending habits changed during lockdown?
We're getting good volumes of orders coming through and the average orders are certainly up around the level we had before lockdown. What we're seeing now is people are buying multiple products per order; that's what has changed during lockdown.
What are your long-term plans?
We want to continue to grow really quickly, but we only distribute within New Zealand at this point. We've just partnered with SPCA so what we're doing there is we are their retail partner, so once we make a profit - which we anticipate will be in six months - then 30 per cent of our total profits will go to SPCA. It means that every item we sell on Pet Depot will help animals with SPCA, which we're really pleased to be doing this as we believe they do amazing work. From a business perspective, the SPCA is incredibly well trusted so we want to make this partnership mutually beneficial and build our business at the same time. The ultimate goal is to be able to move funds to SPCA.
What advice do you give to other people who want to start their own business?
Be genuine and make value-based decisions. Keep things simple - there is no need to overcomplicate operations.