Petco and PetSmart Beware: Amazon Is Muscling Into Pet Products With Its Own Brand
Amazon (AMZN) has started its own brand of pet products, called Wag, expanding on existing private-label efforts that include batteries, baby products, clothing and household goods.
The Wag brand launched Wednesday with dry dog food and Amazon plans to expand the selection to include other pet supplies. The brand is available only to Amazon Prime subscribers, who pay monthly or annual fees in exchange for fast delivery as well as video and music streaming.
The move is a threat to Petco Animal Supplies and PetSmart (PETM), which purchased Chewy.com last year for more than $3 billion, as well as big box retailers and supermarkets that sell pet supplies. Dog food is a difficult item to sell profitably online because it’s heavy and expensive to ship. It appeals to Amazon as a product pet owners purchase frequently, keeping the online marketplace top of mind during buying decisions. It is also a major staple for grocery stores and retail competitor Walmart (WMT), which has its own private label dog foods, including Ol’ Roy.
Wag.com, which was previously owned by Quidsi, now redirects to Amazon’s pet supplies page, which includes a new icon for the private-label dog food. The e-commerce giant closed Quidsi last year, saying it couldn’t make a profit. Seattle-based Amazon purchased Quidsi, which also owned Diapers.com and Soap.com, for $545 million in 2011 to eliminate a competitor and gain customers.
U.S. pet owners will spend $72.1 billion on animals, care and supplies this year, with about $30 billion on pet food, according to the American Pet Products Association.
Amazon began selling pet beds and carriers under the AmazonBasics brand in 2016, with pet carrier sales totaling $2 million last year, according to a March report by One Click Retail, which monitors e-commerce sales.
Amazon’s other recent private-label pushes include bedroom, dining-room and office furniture under the Rivet and Stone & Beam lines. It also reintroduced its own diapers under the Mama Bear brand last year after killing a diaper brand three years earlier.