A customer wearing a protective mask pushes a dog in a cart outside a Walmart store in Lakewood, California, July 16, 2020.
Patrick T Fallon | Bloomberg | Getty Images
walmart jumps into the burgeoning pet telehealth market.
The mega retailer has signed a deal with veterinary telehealth provider Pawp to offer Walmart+ subscribers access to the startup’s membership for a year, the companies confirmed to CNBC.
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Unlimited access to veterinary telecare via video or text will be available to Walmart+ subscribers starting Tuesday, when Walmart is expected to publicly announce the partnership. Remote vets are becoming more common across the industry as consumers look for convenience, but some vets say the practice can be risky for pets.
The offering will be available for a limited time, Walmart said. Walmart+ subscribers have until November 19 to sign up.
The terms of the deal have not been disclosed. Pawp’s annual membership starts at $99.
Walmart’s foray into veterinary telehealth comes as the company looks to deepen shopper loyalty, attract and retain higher-income customers, and better compete with Amazon by making the subscription service more valuable by adding perks.
Walmart+ costs $98 per year, or $12.95 per month. Similar to Amazon Prime, the Walmart service gives members access to unlimited free deliveries and a range of other benefits, such as free access to Paramount+ and discounts at the gas station.
Amazon Prime, which costs $139 a year or $14.99 a month, offers its own partnerships, as members currently get free access to GrubHub+ for a year, along with other perks like photo storage and prescription discounts. By adding Pawp to its plan, Walmart hopes to keep its membership service competitive with Amazon Prime.
“There’s no denying that over the last decade or so we’ve come to think and look at pets as part of the family,” Pawp’s CEO Marc Atiyeh told CNBC. “[Walmart has] a very strong thesis around the pet category and yes they want to be a big player in pet care and pet health in general and Pawp really allows them to outshine the competition and do something that none of the other players have done.
Promotional image of Pawp.
Source: Pawpa
The deal comes as the $123.6 billion U.S. pet market explodes, with more and more U.S. households spending heavily to keep their furry family members healthy and happy.
According to research from Bloomberg Intelligence, the U.S. market is expected to grow to $200 billion by the end of the decade, and pet health care is driving that growth.
“During the pandemic, there was a huge number of pet adoptions and even more important than just the numbers is how people treat their pets. Pets are becoming part of the family, people are spending money on their pets and spending on their pet’s healthcare, Ann-Hunter Van Kirk, a senior biopharmaceutical analyst at Bloomberg Intelligence, told CNBC.
In the past, when an animal had a serious health problem or life-threatening illness, it was common practice to euthanize the pet, but now people are often willing to spend whatever it takes to keep them alive, Van Kirk said.
She said Walmart’s partnership with Pawp “makes perfect sense” and shows how eager retailers are to increase their share of the pet market.
While Amazon has deepened its investments in human health, including the acquisition of primary care provider One Medical for $3.9 billion, Walmart has expanded its pet business. It is already one of the bigger players in pet food, prescriptions, insurance and hard goods like toys and beds.
Walmart’s expansion into pet telehealth indicates that the largest US retailer is poised to increase its market share.
“[Walmart] has become the one-stop destination for all pet parent needs,” a company spokesperson told CNBC. sustainable goods and services — Walmart delivers real value, especially in this age of inflation.”
The telehealth visits could be used to address “common issues” such as allergies, digestive problems or “mild limping,” the spokesperson said. The service can also be used for aftercare.
Traditional stores that only sell pets, such as Tough And petco have already invested in pet health care to better compete with big stores. In the long run, a key factor will be whether they can grow and make higher profits over time.
A Walmart logo seen from the store’s parking lot in Bloomsburg, Pennsylvania.
Paul Weaver | SOPA Images | Rocket | Getty Images
Walmart’s partnership with Pawp allows it to better compete with Amazon and boost sales of its pet products. The deal also solves a critical problem for Pawp: customer acquisition.
Walmart has yet to publicly disclose its number of Walmart+ subscribers, but Morgan Stanley estimates membership has reached 19.3 million and is growing steadily, according to an April research note.
Industry insiders have pointed out that acquiring new customers is one of the biggest hurdles pet telecare providers have to overcome to scale their business, as the practice is still new and the value proposition may be limited.
Pawp, which has raised $27.5 million in funding since its inception in 2020, according to Crunchbase, also does not share its membership numbers. But it will now have access to millions of potential customers through the partnership.
The risks and benefits of telehealth for pets
Pet telehealth is just one branch of the overall pet health market and has grown rapidly since the Covid-19 pandemic, when the arise out of necessity.
Chewy was one of the first major retailers to offer the service, which is currently free to its customers. Now a slew of startups and major vet chains are offering telehealth to pet parents.
The practice has come under scrutiny from some veterinarians who have expressed concern that the service could endanger pets. It has become a major point of discussion in the veterinary community.
Some veterinarians have told CNBC that it’s difficult to assess health issues, including life-threatening conditions, when virtually examining a pet, saying there’s no substitute for a physical exam.
Others have argued that pet telehealth helps bridge access to care as pet owners face a nationwide veterinary shortage and major pet health deserts across rural America.
Promotional image of Pawp.
Source: Pawpa
The space is also subject to a maze of regulatory challenges at both the state and federal levels, which has prevented Chewy from scaling up its telehealth service, CEO Sumit Singh previously told CNBC.
Most states prohibit veterinarians from diagnosing conditions or prescribing medications unless they have previously personally examined the pet and established what is known as a Veterinary Client-Patient Relationship, or VCPR.
During the Covid-19 pandemic, several states temporarily reversed those guidelines to respond to the global health emergency, but some states have made the changes permanent. It has spawned a growing lobbying movement to change VCPR regulations at the national level, which Chewy and Mars Veterinary Health, a subsidiary of the Mars pet food and candy conglomerate, helped fund.
The American Veterinary Medical Association, the nation’s largest advocacy group for veterinarians, maintains outside of an emergency such as a global pandemic, a VCPR can only be determined after a personal exam. The group’s ethical standards allow veterinarians to diagnose conditions, prescribe medications or treat animals virtually, but only after a VCPR has been prepared in person.
In states that allow a virtual VCPR, Pawp’s veterinarians prescribe medications and make a diagnosis as needed. But the company’s founder defended the practice, saying the best pet care comes when “physically and digitally marry.”
“More often than not, especially within our industry, regulation lags behind what I would say is the latest innovation, the latest similar findings, so we want to make sure we strike the right balance,” said Atiyeh, CEO of Pawp.
“We have a huge shortage of vets, don’t we?” he continued. “The last thing you want is a pet that needs a certain medication… to not get the proper care they need, to not get the medication they need just because they don’t have physical access to that vet. could get.”
He said the company’s medical team is constantly reviewing medications to determine which species are safe to prescribe virtually, such as flea and tick prescriptions, regardless of what the prescriptions say.
“Number one is, can we prescribe? Number two is what kind of drugs we’re comfortable prescribing,” Atiyeh said. “We still have a very high bar for what we think is the right thing to do for pets.”
— CNBCs Melissa Reco contributed to this report.
