Dr. Katy Nelson
DVM, Senior Veterinary Relations Manager, Chewy
Dr. Katy Nelson is the Senior Veterinary Relations Manager for Chewy Health where she’s responsible for the management and innovation of Chewy’s Telehealth platform, Connect with a Vet. She has practiced veterinary medicine for over 20 years and spent much of that time working in emergency care and general practice. Dr. Katy served as the host of “The Pet Show with Dr. Katy” on Washington DC’s WJLA ABC 24/7 news channel for 8 years, and as the animal health expert for Washington DC’s All News Radio Station, WTOP News for 10 years. She also worked as the animal health reporter for Washington DC’s ABC affiliate WJLA ABC 7 for 7 years. Dr. Katy serves on the Board of Directors for the Animal Welfare League of Arlington, VA, and Del Ray United Methodist Church in Alexandria, VA.
Dr. Katy earned her veterinary degree in 2001 from the Louisiana State University’s School of Veterinary Medicine. She is a Certified Veterinary Journalist (CVJ), accredited by the American Society of Veterinary Journalists (ASVJ). Through her consulting business, KJN Pet Marketing, she served as a valuable source to reporters around the country for 11 years, and as a marketing consultant for pet-related companies from Fortune 500 corporations to pet/pet parent-targeted start-ups.Read Articles Written by Dr. Katy Nelson
The population of pet parents in the United States is becoming younger and more connected —with significant implications for the way veterinary practices are managed.
This sponsored article is brought to you by Chewy Health.
The American Pet Products Association’s (APPA) generational report found that Millennials (anyone born between 1981 and 1996) are now the largest segment of pet parents in the U.S., representing 32% of all pet-owning households. This demographic is largely considered a “digitally native” generation that is more likely to treat their pets as “one of the family.”
Further research shows that digital natives especially turn to the Internet at a much higher rate than other generational cohorts, with 70% of Millennial pet parents using a variety of online sources to learn about pet products. Sixty-two percent of Millennial pet parents increased the number of online pet product purchases they made in the last year, and almost half say they plan to increase their online purchases with home delivery in the next year, indicating that these habits are here to stay.
Before the pandemic sent pet parents en masse to online shopping, a growing movement toward digital spending was already well underway. According to APPA’s 2021-2022 survey, online shopping by pet parents increased by almost 20%, from 72% in the prior year to 86% of responses in this year’s study. Before the pandemic, 60% of pet parents, on average, purchased pet products in person at brick-and-mortar stores. During the pandemic, in-person shopping dropped to 41%, aligning more closely with the 46% of pet parents who prefer to purchase online with products shipped directly to their homes. In fact, 71% of pet parents that are Millennials and younger partake in some type of autoship/subscription program for pet products, according to the market research firm Packaged Facts.
This preference for online shopping is impacting the market for pet medications, with buying patterns rapidly shifting, especially for the products that make up the majority of prescription spending, including preventatives, parasiticides, and medications for chronic disease management. According to Packaged Facts, between 2020 and 2021, about 20% of pet parents shifted to buying medications from their veterinarian’s website rather than heading into the practice to pick them up. Another 24% shifted to buying their medications from third-party online retailers.
While these changing behaviors posed a challenge for practices that were already being forced to adapt to operating in the pandemic, the shift of prescription purchases online was muted by growth in overall demand for pet medications. Specifically, between 2019 and 2021, the pet medications market grew by 22%, hitting approximately $11.5 billion, according to Packaged Facts. That said, analysts predict that the share of pet medications bought online will continue to grow, reaching at least 30% of the overall pet medication market by 2025.
“It is pet parents who are leading the shift online, and they are voting with their clicks and wallets,” said Jon Alexander, Vice President of Services at Chewy Health. “With approximately 70% of medication spend being preventatives or drugs to treat chronic conditions requiring ongoing refills, it’s no surprise that customers are turning to the convenience of home delivery and shopping around for the best price. In fact, it follows the pattern of transformation we’ve seen in the retail industry more broadly, categories like apparel and groceries, once considered insulated from e-commerce, are all seeing big shifts toward the online channel and home delivery. If there is a lesson to be learned from their experience, it’s that fighting a consumer-led change is a losing battle.”
This migration toward online shopping is quickly changing the way forward-looking veterinary practices are managed, including everything from inventory management to the mix of services and products they offer.
“Veterinary practices have moved away from carrying large overstocks of prescription medications after the realization that overstocking medications or stocking too many choices of similar products can have a negative financial impact on practice profitability,” said Dr. Jamie Richardson, head of veterinary medicine at Small Door Veterinary. Instead, Small Door carries a tightly curated inventory of popular products or products that are needed in acute clinical situations.
For the rest, Small Door refers patients to Chewy’s online pharmacy, which is run through the company’s Practice Hub solution.
Chewy’s Practice Hub enables veterinarians to set prices, digitally transmit pre-approved prescriptions, and earn revenue when customers place a Chewy order in-clinic or purchase from their practice while shopping on Chewy.com. For recurring prescriptions, Chewy’s AutoShip feature ensures that refills will be automatically sent to pet owners on a scheduled basis, increasing compliance and ensuring there is no gap in care.
“Practice Hub streamlines our medication fulfillment process, allowing our team to more quickly and efficiently review refill requests by avoiding delays in having to source and prepare the medications themselves,” said Dr. Richardson. “Our members like this option as it provides a more convenient and economical avenue for their needs.”
Additionally, the ability to refer customers to Chewy gives Small Door’s prescribing veterinarians a greater selection than they would have otherwise, thanks to Chewy’s broad selection and nationwide network of pharmacies.
“If we have a need for a more chronic medication or a medication that is used less frequently, we will advise our members that they can purchase the product from Chewy.com so we minimize expensive pharmaceuticals sitting on our shelves and expiring,” said Dr. Richardson. “This has helped our practices significantly decrease the total overhead on our pharmaceutical inventory and streamlined our inventory management.”
This includes compounded medications, which can be delivered nationwide in as little as 48 hours after the order is placed.
The Future Is Now
No matter how and where pet parents choose to purchase products for their pets, there is no doubt that the veterinarian remains at the center of the pet and pet parent relationship when it comes to the health of their pets. Almost 60% of pet parents report relying on their veterinarian for pet health information and guidance, according to Packaged Facts.
To keep pace with the changing needs of their customers, veterinary practices like Small Door are proactively adapting to an environment that’s more digital and more informed, but also more invested in pet health and wellness. This provides both challenge and opportunity. The challenge lies in adopting new technologies and learning how to meet a new generation of pet parents where they’re at, whether that means fielding questions about smart collars or providing popular services like curbside drop-off.
The opportunity, however, is greater. As younger generations continue to become a larger proportion of pet parents, veterinary practices can look forward to working with highly motivated, information-seeking clients who are more willing to spend to support their pets’ health.
“While the shift to purchasing medications online presents a challenge to today’s practices, it also creates new opportunities to improve practice efficiency, increase capacity and increase the value captured for the services provided,” Alexander said.
“If you think about it, a pet parent has traditionally left an appointment with a bill that includes both services, and medications, with medication often being 50% or more of the total. That can create a lot of sticker shock for the average customer,” Alexander said. “But by separating the cost of the services from the medications, practices have an opportunity to increase the scope of services delivered per visit, get more revenue per service, or both. The keys to success will be optimizing the assortment and quantity of products stocked in practice to satisfy the ‘need it now’ customer or condition, leveraging technology to reduce the effort and time invested in managing online pharmacy orders, and refining pricing strategies to increase service revenues.”
Yes, our industry is changing, but change doesn’t always have to be scary. It can be an opportunity to find new ways to help pets, pet parents and a practice’s bottom line through innovative and technology-driven solutions, and partnerships with companies who are seeking to do the same.