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How Petco Is Using Data-Driven Marketing Tactics To Meet The Expanding Needs Of America’s Pet Parents

Petco has been a leader in the use of data to fuel its marketing and advertising strategies as it seeks to navigate the ever expanding media ecosystem using new tools, technologies, behaviors, platforms, and disciplines. We spoke with Jay Altschuler, Petco’s VP of Media at the Brand Innovators Media Buying Summit last week about Petco’s innovative use of data.

ALAN WOLK (AW): At the Brand Innovators Media Buying Summit, you spoke about how data and creativity are the ultimate partners. Can you expand on that for me?

JAY ALTSCHULER (JA): The first thing that we’ve started to harness is the power of the signals that are coming from search and social, which are essentially the largest focus groups on the planet. By looking at that, we can get a real sense of consumer interest and demand, and ultimately, intent.

For example, at the beginning of the pandemic, we started to see a shifting preference for doing everything online. So we made a decision to push forward with programs like curbside delivery, that allowed people to order online and pick up at the store from the safety of their vehicles. It was something we’d been contemplating doing beforehand, but we accelerated the timetable and had it up and running in just two weeks.

From a media standpoint, we increased the amount we were spending the digital space about 3X–and this was at a time when other brands were pulling back and cutting their ad spending. That proved to be a very successful move for us both from a sales perspective and from a customer satisfaction perspective.

AW: Are you using data to help you determine the tone of a campaign or the sorts of benefits you talk about?

JA: That’s something we do a lot on social media, with our influencers, where we can do A/B testing and get a sense of what is resonating with our consumers. So we can test everything from products to pricing and get a sense of what is working with different audiences.

AW: How much of your advertising is product-driven versus image-driven and how does data figure into that calculation?

JA: The perfect flywheel for us is really equal parts demand creation, which is a bit more about branding and demand fulfillment, which is a bit more about performance marketing. What we realized is that focusing on lower funnel work like performance marketing may feel very efficient at first, but ultimately you’re hitting the point of diminishing returns. At the same time, if we’re just doing brand work, we’re missing out on the opportunity to take advantage of our well developed ecommerce channel. So we try to get both the upper funnel and lower funnel working together in a way that creates synergy and that’s really been our sweet spot.

AW: We seem to be at a point now where brands that have their own first party data are at a real advantage, even on TV. What can you tell me about how Petco is making use of data?

JA: Given all the recent changes in the industry, especially around cookies, you have to have first party data to win in this space. Petco is very fortunate to have over 25 million people in our Pals loyalty program. On top of that, we own our own POS [point of sale] data. That means we have great first party data, and we have the ability to create closed loop measurement models, which is really just groundbreaking in the way that allows us to buy and plan media.

AW: What’s on the agenda for Petco over the coming year? What changes or announcements should we be looking for and how does data play into that?

JA: Our big news this year is that we’re continuing to pivot to being a pet health and wellness company, and data is helping us meet the demands of being a health and wellness company. 

Our ambition is to become much more predictive in the way that we help pet parents manage the health and wellness of their pets by using the data we collect.

Allergy season is a really great example of how this can play out. Based on what data is telling us about the severity of allergy season in a particular area, we can see if our data shows that the weather also seems to be affecting pet allergies, and then we can start to get out in front of that and offer solutions to people who live in areas where a lot of pets (and pet parents) are suffering from allergies.