Shelves of Petco supplies inside Lowe's
Photo: Petco

Lowe’s is expanding a program to operate Petco in-store shops to nearly 300 locations by year-end after a successful pilot at 15 locations as pet ownership spiked during the pandemic.

The focus will be on rural communities. Each shop will cover around 1,100 square feet and be positioned in the seasonal area at the front of Lowe’s stores. The partnership includes a designated Petco store on Lowe’s website.

Lowe’s said the shops provide convenience to its core DIY (do-it-yourself) customer with pets. According to the American Pet Products Association (APPA), 86.9 million families — or 66% of U.S. households — now own a pet, up from 56% in 1988, the first year the survey was conducted.

“Our initial pilot program with Petco resonated with our existing, loyal shoppers and introduced new customers to Lowe’s,” said Bill Boltz, Lowe’s EVP of merchandising.

“The success and expansion of our Lowe’s + Petco store-in-store concept is proof of the important role pets play in our lives,” Petco’s chief merchandising officer Amy College stated.

The Petco store-in-store expansion is part of Lowe’s recent rollout of a rural store concept featuring a broader offering of farm, ranch, and outdoor products.

Marvin Ellison, Lowe’s president and CEO, said on the DIY chain’s first-quarter analyst call, “While in years past, our penetration of rural and remote stores was viewed as a competitive disadvantage, we now expect that these stores will be a key component of our operating profit growth over the next three to five years.”

For its part, Petco’s chairman and CEO, Ron Coughlin, said on a quarterly call last fall that the Lowe’s partnership was a “great complement actually to our small town rural initiatives as well.”

Macy’s has opened in-store shops from Toys R Us, Finish Line, Sunglass Hut, Pandora, Lids, and Claire’s while Target has partnered with Ulta and Kohl’s with Sephora, but operating in-store shops inside other retailers is still rare.

BrainTrust

“I see tremendous synergy between Petco and Lowe’s. Petco products will drive other sales and will make better use of the massive square footage of a Lowe’s store.”

Ken Morris

Managing Partner Cambridge Retail Advisors


“This is an ‘uncommon partnership’ that speaks to the consumer’s desire to limit trips and combine intentional purchase occasions.”

Dave Wendland

Vice President, Strategic RelationsHamacher Resource Group


“The addition also provides more of a reason to visit Lowe’s – something the company is always looking to engineer in its battle against larger rival, Home Depot.”

Neil Saunders

Managing Director, GlobalData

Discussion Questions

DISCUSSION QUESTIONS: Why are Petco’s in-store shops working for Lowe’s? Does the success point to a bigger opportunity for retailers to open in-store shops from third-party chains?

Poll

Does Lowe’s or Petco benefit more from their in-store partnership?

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17 responses to “Petco Finds a Home Inside Lowe’s”

  1. DeAnn Campbell Avatar
    DeAnn Campbell

    Pet owners are universal in their need to buy products to care for —and spoil — their pets, but rural communities often struggle to access to products. Lowes offers a lifeline to pet lovers who live away from retail centers, and can be limited in even home delivery access because of a rural route number instead of a street address.

  2. Perry Kramer Avatar
    Perry Kramer

    The store within a store concept will continue to grow. Done well it is a win for everyone. The initial ramp up and decision process about sharing of data, systems and employees is difficult to work through for the retailers. It has been implemented in many different flavors. However, each variation can be a win for retailers and consumers. The tric,k as Lowes and Macy’s have both learned, is to not force it into every location. Build a model, stick to it, and accept that it is not right in every location.

  3. Ken Morris Avatar
    Ken Morris

    Whenever an initiative like this rolls out after a pilot, you pretty much know it will succeed. This model has been in place for many years. Jewelry in department stores was almost always a leased department, and the Ulta/Target and Sephora/Kohl’s matchups have worked as well. So, I see tremendous synergy between Petco and Lowe’s. Petco products will drive other sales and will make better use of the massive square footage of a Lowe’s store. 

    Also, positioning the Petco right near the entrance will be a huge positive for pet owners. For those allergic to pets, not so much. Lucky for Lowe’s, they sell air purifiers, too. Expect a couple of those hard at work in the Petco locations, possibly at a fetching discount. (pun intended)

  4. Gene Detroyer Avatar
    Gene Detroyer

    Sixty-six percent of U.S. households own pets. I guess that in rural areas, the percentage is much higher. The 300 Lowes locations increase the Petco footprint by 25%. This gives pet owners 300 locations closer than the nearest Petco store. Convenience, convenience, convenience. This combination is a win for both partners.

    I have always liked the store-within-a-store concept. But two things must be present to be successful. The partners must have the same customer base, and the store-within-a-store partner must bring expertise to the host site that the host does not have.

    1. Dave Wendland Avatar
      Dave Wendland

      I’m a HUGE fan of store-within-a-store concept when the customer served finds value from the combined presence and added excitement during their shopping trip.

  5. Dave Wendland Avatar
    Dave Wendland

    This is an ‘uncommon partnership’ that speaks to the consumer’s desire to limit trips and combine intentional purchase occasions. Many of the Lowe’s shoppers are likely pet owners (with nearly 7 in 10 households now have a pet as part of their family). Lowe’s has reported that they have about 17 million customer transactions per week — that means approximately 12 million are pet owners. The math makes sense to me … and will make lots of cents for Lowe’s and Petco!

  6. Neil Saunders Avatar
    Neil Saunders

    From our data, those who visit home improvement stores tend to over-index in terms of owning a pet. So, in some ways, Lowe’s is simply catering to the needs of its shoppers. Lowe’s also has good store coverage in more rural areas, where buying pet products can be more difficult – which is why Tractor Supply does so well in the category. Of course, the addition also provides more of a reason to visit Lowe’s – something the company is always looking to engineer in its battle against larger rival, Home Depot. This is a smart move by both brands.

    1. Patricia Vekich Waldron Avatar
      Patricia Vekich Waldron

      As I read this I was thinking that Lowe’s was taking aim at Tractor Supply who are the leader in rural markets.

  7. Doug Garnett Avatar
    Doug Garnett

    Had Lowe’s merely added pet supplies to their mix, no matter how heavily they promoted the idea it would have taken customers a very long time to discover the products and buy enough to justify the newly dedicated real estate. With the Petco connection, they jump start the process and instantly gain advantage for the change. The challenge is that moves like this also create project debt – at some point in the future what they’ve given up to Petco will have to be reconciled. My guess? It will have been well worth the debt.

  8. David Naumann Avatar
    David Naumann

    Obviously, the Petco in-store pilot proved to be a profitable concept. The combination of driving incremental new customer visits and profit per square foot drives positive value for Lowe’s. It is not something many people would have thought of for a product partnership, but it works.

  9. Richard Hernandez Avatar
    Richard Hernandez

    I remember when we first looked at this concept. I thought it was a great idea then and apparently customers agree.
    This is perfect especially in rural areas where this type of assortment is needed.
    Good for them.

  10. Brent Biddulph Avatar
    Brent Biddulph

    No brainer. Both Lowe’s and Home Depot already carry wild bird seed, feeders. Tractor Supply has a large amount of floorspace dedicated to same, plus livestock and pets. It fits well with Lowes GTM strategy. Now, if they would reconsider a small carve out for tool rentals in all locations.

  11. Lisa Taylor Avatar
    Lisa Taylor

    This is a perfect example of understanding customer needs and acting accordingly. As a consumer, I always appreciate when a retailer “sees me” and adds convenience and features that are beneficial to my experience, which increases my loyalty to that retailer and often will be the deciding factor in which retailer I choose to shop because I can get what I need in one place.

  12. Lucille DeHart Avatar
    Lucille DeHart

    Shop-in-shops are not a new idea, but I like the re-evolution of the concept. Department stores pioneered brand shops but customer data and brand ownership were blurred. Now with enhanced unified commerce systems and platforms, expanding brands within other brands has a new life. I believe these type of complimentary partnerships provides a great new multi-channel element for both parties.

  13. Ian Percy Avatar
    Ian Percy

    You go where the data sends you, so no arguments there. My quick glance at this piece made me imagine a Lowes section in a Petco and I thought that won’t work. Dumb, I know. But success with this store in a store concept depends on which is the host and which the visiting in-laws. “Intentinal congruence” is the key principle at play. Petco in Lowes is congruent but Lowes in Petco isn’t.

  14. Raj B. Shroff Avatar
    Raj B. Shroff

    It works because of the trust and brand awareness of Petco and the convenience of Lowe’s, saving shoppers an extra trip.

    In-store shops from third-party chains has been proven to work. Retailers just have to find the right partners that overlap in mindset during the shopper journey and offer convenience. But it should go without saying that the anchor brand has to be strong. Weak anchors using more powerful brands to drive traffic would be tough, assuming the more powerful brand agreed to being in a weaker anchor.

  15. Roland Gossage Avatar
    Roland Gossage

    This is an excellent example of meeting your customers where they are to create more convenient shopping experiences. As the article mentions, Lowes noticed a lack of large pet stores in these rural markets and identified an opportunity to address the gap through this partnership.

    Petco’s in-store shops allows the brand to foster customer loyalty for a new audience. This partnership opens new revenue and customer opportunities for both brands for an audience likely already looking for both product offerings.

17 Comments
oldest
newest
DeAnn Campbell
DeAnn Campbell
16 days ago

Pet owners are universal in their need to buy products to care for —and spoil — their pets, but rural communities often struggle to access to products. Lowes offers a lifeline to pet lovers who live away from retail centers, and can be limited in even home delivery access because of a rural route number instead of a street address.

Perry Kramer
Perry Kramer
16 days ago

The store within a store concept will continue to grow. Done well it is a win for everyone. The initial ramp up and decision process about sharing of data, systems and employees is difficult to work through for the retailers. It has been implemented in many different flavors. However, each variation can be a win for retailers and consumers. The tric,k as Lowes and Macy’s have both learned, is to not force it into every location. Build a model, stick to it, and accept that it is not right in every location.

Ken Morris
Ken Morris
16 days ago

Whenever an initiative like this rolls out after a pilot, you pretty much know it will succeed. This model has been in place for many years. Jewelry in department stores was almost always a leased department, and the Ulta/Target and Sephora/Kohl’s matchups have worked as well. So, I see tremendous synergy between Petco and Lowe’s. Petco products will drive other sales and will make better use of the massive square footage of a Lowe’s store. 

Also, positioning the Petco right near the entrance will be a huge positive for pet owners. For those allergic to pets, not so much. Lucky for Lowe’s, they sell air purifiers, too. Expect a couple of those hard at work in the Petco locations, possibly at a fetching discount. (pun intended)

Gene Detroyer
Gene Detroyer
16 days ago

Sixty-six percent of U.S. households own pets. I guess that in rural areas, the percentage is much higher. The 300 Lowes locations increase the Petco footprint by 25%. This gives pet owners 300 locations closer than the nearest Petco store. Convenience, convenience, convenience. This combination is a win for both partners.

I have always liked the store-within-a-store concept. But two things must be present to be successful. The partners must have the same customer base, and the store-within-a-store partner must bring expertise to the host site that the host does not have.

Dave Wendland
Dave Wendland
  Gene Detroyer
16 days ago

I’m a HUGE fan of store-within-a-store concept when the customer served finds value from the combined presence and added excitement during their shopping trip.

Dave Wendland
Dave Wendland
16 days ago

This is an ‘uncommon partnership’ that speaks to the consumer’s desire to limit trips and combine intentional purchase occasions. Many of the Lowe’s shoppers are likely pet owners (with nearly 7 in 10 households now have a pet as part of their family). Lowe’s has reported that they have about 17 million customer transactions per week — that means approximately 12 million are pet owners. The math makes sense to me … and will make lots of cents for Lowe’s and Petco!

Neil Saunders
Neil Saunders
16 days ago

From our data, those who visit home improvement stores tend to over-index in terms of owning a pet. So, in some ways, Lowe’s is simply catering to the needs of its shoppers. Lowe’s also has good store coverage in more rural areas, where buying pet products can be more difficult – which is why Tractor Supply does so well in the category. Of course, the addition also provides more of a reason to visit Lowe’s – something the company is always looking to engineer in its battle against larger rival, Home Depot. This is a smart move by both brands.

Patricia Vekich Waldron
Patricia Vekich Waldron
  Neil Saunders
16 days ago

As I read this I was thinking that Lowe’s was taking aim at Tractor Supply who are the leader in rural markets.

Doug Garnett
Doug Garnett
16 days ago

Had Lowe’s merely added pet supplies to their mix, no matter how heavily they promoted the idea it would have taken customers a very long time to discover the products and buy enough to justify the newly dedicated real estate. With the Petco connection, they jump start the process and instantly gain advantage for the change. The challenge is that moves like this also create project debt – at some point in the future what they’ve given up to Petco will have to be reconciled. My guess? It will have been well worth the debt.

David Naumann
David Naumann
16 days ago

Obviously, the Petco in-store pilot proved to be a profitable concept. The combination of driving incremental new customer visits and profit per square foot drives positive value for Lowe’s. It is not something many people would have thought of for a product partnership, but it works.

Richard Hernandez
Richard Hernandez
16 days ago

I remember when we first looked at this concept. I thought it was a great idea then and apparently customers agree.
This is perfect especially in rural areas where this type of assortment is needed.
Good for them.

Brent Biddulph
Brent Biddulph
16 days ago

No brainer. Both Lowe’s and Home Depot already carry wild bird seed, feeders. Tractor Supply has a large amount of floorspace dedicated to same, plus livestock and pets. It fits well with Lowes GTM strategy. Now, if they would reconsider a small carve out for tool rentals in all locations.

Lisa Taylor
Lisa Taylor
16 days ago

This is a perfect example of understanding customer needs and acting accordingly. As a consumer, I always appreciate when a retailer “sees me” and adds convenience and features that are beneficial to my experience, which increases my loyalty to that retailer and often will be the deciding factor in which retailer I choose to shop because I can get what I need in one place.

Lucille DeHart
Lucille DeHart
16 days ago

Shop-in-shops are not a new idea, but I like the re-evolution of the concept. Department stores pioneered brand shops but customer data and brand ownership were blurred. Now with enhanced unified commerce systems and platforms, expanding brands within other brands has a new life. I believe these type of complimentary partnerships provides a great new multi-channel element for both parties.

Ian Percy
Ian Percy
16 days ago

You go where the data sends you, so no arguments there. My quick glance at this piece made me imagine a Lowes section in a Petco and I thought that won’t work. Dumb, I know. But success with this store in a store concept depends on which is the host and which the visiting in-laws. “Intentinal congruence” is the key principle at play. Petco in Lowes is congruent but Lowes in Petco isn’t.

Raj B. Shroff
Raj B. Shroff
16 days ago

It works because of the trust and brand awareness of Petco and the convenience of Lowe’s, saving shoppers an extra trip.

In-store shops from third-party chains has been proven to work. Retailers just have to find the right partners that overlap in mindset during the shopper journey and offer convenience. But it should go without saying that the anchor brand has to be strong. Weak anchors using more powerful brands to drive traffic would be tough, assuming the more powerful brand agreed to being in a weaker anchor.

Roland Gossage
Roland Gossage
14 days ago

This is an excellent example of meeting your customers where they are to create more convenient shopping experiences. As the article mentions, Lowes noticed a lack of large pet stores in these rural markets and identified an opportunity to address the gap through this partnership.

Petco’s in-store shops allows the brand to foster customer loyalty for a new audience. This partnership opens new revenue and customer opportunities for both brands for an audience likely already looking for both product offerings.