Activist investor Jana Partners, led by Barry Rosenstein, disclosed in a regulatory filing on Thursday morning that it has amassed a 9.9% stake in the pet products leader, and it started to buy shares in early May. The hedge fund said it intends to talk to PetSmart’s brass about potentially selling itself, saying shares are “undervalued,” and go over ways the company it can improve its performance.

And indeed, its performance has been wanting of late.

For years, PetSmart was a Wall Street favorite, posting big comparable sales gains, even at the height of the recession, helped by its expanded selection of proprietary, natural pet food brands and kennel services like “pet hotels”. But the company fell asleep at wheel, while rivals from Amazon.com’s (AMZN) to Wal-Mart Stores (WMT) and others pushed hard into its turf.

The result: in May, PetSmart reported a 0.6% decline in comparable sales, its first drop as a publicly traded company, and made a downward revision to its sales and profit forecast for the fiscal year. PetSmart had originally thought comparable sales would rise as much as 4% this year but now thinks they will be flat. Another source of concern: a drop in the number of store visits by customers.

According to ITG Investment Research, PetSmart’s share of the U.S. pet care industry peaked at 12.4% in 2012 and 2013 and has begun to slide. And a major culprit of PetSmart travails has been its very late response to e-commerce, which by the company’s own admission makes up a tiny sliver of sales. (ITG estimates PetSmart gets about 1% of sales online versus 4% for the pet industry in general.)

A research paper this week by ITG found that PetSmart’s biggest customers appear to be shifting spend away from the company more quickly than its less frequent customers, and are becoming members of Amazon’s Prime program at a faster  clip.

“That’s the bigger risk going forward. Amazon has a better infrastructure,” John Tomlinson, Managing Director & Head of Retail at ITG and one of the report’s authors, told Fortune. Part of that, he said, is the complexity of shipping items that tend to be heavy, like kitty litter and food, which will benefit Amazon.

PetSmart CEO David Lenhardt laid out in May his plan to compete online after the company for years ignored e-commerce.

This quarter, PetSmart overhauled its website, expanded the selection of items available online and launched a new mobile shopping site. It has also started offering more free shipping. At 19 stores, it is testing order online, pick up in store, and PetSmart has equipped sales staff with iPad minis so they can take customer orders on the store floor. “It is critical to compete for these customers in the online space more aggressively,” said Lenhardt.

But many Wall Street analysts noted, correctly, that PetSmart has been slow to the game after ignoring online competition and is employing tactics that other retailers have been using for years.

PetSmart has not only faced competition online. Grocery stores and discount retailers, Walmart and Target (TGT) in particular  have been going after the pet food market more aggressively. A recent JPMorgan research note said that PetSmart is facing “an escalation” of competition and is more exposed to the discount chain’s efforts than Petco is given PetSmart’s generally lower prices. Adding to the pain, PetSmart customers have cut back on more discretionary items like toys and beds, which are far more profitable than food, according to Oppenheimer analyst Brian Nagel.

To get more customers to come into its stores, PetSmart is refocusing its attention on consumables like food and litter, which generate a flow of regular visits. PetSmart is also emphasizing its natural pet foods more to compete against groceries.

If all these tactics work, PetSmart may yet prove that you can teach and old dog new tricks.