Walmart partners with Pawp to offer free pet telehealth

A shopper wearing a face mask pushes a dog in a cart past a Walmart store in Lakewood, California on July 16, 2020.

Patrick T. Fallon | Bloomberg | Getty Images

walmart enters the booming pet telehealth market.

The mega-retailer has signed an agreement with Pawp veterinary telehealth provider to offer Walmart+ subscribers access to the startup’s membership for one year, the companies confirmed to CNBC.

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Unlimited access to veterinary telehealth via video or text will be available to Walmart+ subscribers starting Tuesday, when Walmart is expected to publicly announce the partnership. Remote vet visits are on the rise across the industry as consumers seek convenience, but some vets say the practice could be risky for pets.

The offer will be available for a limited time, Walmart said. Walmart+ subscribers will have until November 19 to sign up.

Terms of the agreement were not disclosed. Pawp’s annual membership starts at $99.

Walmart’s foray into veterinary telehealth comes as the company seeks to retain more shoppers, attract and retain higher-income customers and better compete with Amazon by making its subscription service more valuable with the addition of benefits.

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 pump.

Amazon Prime, which costs $139 per year or $14.99 per month, offers its own partnerships, as members currently get free access to GrubHub+ for a year, along with other perks like storage of photos and discounts on prescriptions. By adding Pawp to its membership, Walmart hopes to keep its membership service competitive with Amazon Prime.

“There’s no denying that over the last decade we’ve started to think about and see pets as part of the family,” Pawp 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 leapfrog the competition and do something that none of the other players did.”

Pawp promotional image.

Source: Pawp

The deal comes as the $123.6 billion U.S. pet market is booming, with more U.S. households spending big bucks to keep their furry family members healthy and happy.

The US market is expected to reach $200 billion by the end of the decade and pet healthcare is driving the boom, according to research by Bloomberg Intelligence.

“During the pandemic, there have been a large number of pet adoptions and more important than the numbers is how people treat their pets. Pets are now part of family, people spend on their pets and spend on their pet’s health care,” Ann-Hunter Van Kirk, senior biopharmaceutical analyst at Bloomberg Intelligence, told CNBC.

When an animal had a serious medical condition or fatal disease in the past, it was common to put it down, but now people are often willing to spend what is necessary to keep it alive, Van Kirk said. .

She said Walmart’s partnership with Pawp “makes perfect sense” and shows how keen retailers are to grow their share of the pet market.

As Amazon deepened its investments in human health, including through its $3.9 billion acquisition of primary care provider One Medical, Walmart expanded its companion animal business. It’s already one of the biggest players in pet food, prescriptions, insurance and durable goods such as toys and beds.

Walmart’s expansion into pet telehealth indicates that the largest US retailer is poised to increase market share.

“[Walmart] has become the one-stop destination for all pet parent needs,” a company spokesperson told CNBC. “By providing easy, convenient shopping and affordable solutions for pet care. in everything – from food, candy, toys, apparel, durable goods and services – Walmart offers real value, especially in this time of inflation.”

Telehealth visits can be used to address “many common concerns”, such as allergies, digestive issues or “mild lameness”, the spokesperson said. The service can also be used for follow-up care.

Traditional pet retailers such as Soft And petco have already invested in pet healthcare to better compete with big box stores. In the long run, this will be a key factor in whether they can grow and earn higher profits over time.

A Walmart logo seen from the parking lot of its store in Bloomsburg, Pennsylvania.

Paul Tisserand | SOPA Pictures | Light flare | Getty Images

Walmart’s partnership with Pawp will allow it to better compete with Amazon and could increase sales of its pet products. The deal will also solve a critical problem for Pawp: customer acquisition.

Walmart has yet to publicly disclose its number of Walmart+ subscribers, but Morgan Stanley estimates that membership has reached 19.3 million and is still growing, according to an April research note.

Industry insiders pointed out that acquiring new customers is one of the biggest hurdles pet telehealth providers must overcome to scale their businesses, as the practice is still new and its proposition of value 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 member numbers. But he will now have access to millions of potential customers through this partnership.

The risks and benefits of pet telehealth

Pawp promotional image.

Source: Pawp

The space is also subject to a maze of regulatory challenges at both the state and federal levels, which has prevented Chewy from expanding its telehealth service, CEO Sumit Singh told CNBC previously.

Most states prohibit veterinarians from diagnosing conditions or prescribing medications virtually unless they have already examined the animal in person and established what is called a veterinary client-patient relationship, or VCPR.

During the Covid-19 pandemic, several states temporarily rescinded these guidelines to respond to the global health emergency, but some states made the changes permanent. It sparked a growing lobbying movement to change VCPR regulations nationwide, which Chewy and Mars Veterinary Health, a subsidiary of pet food and candy conglomerate Mars, helped fund.

The American Veterinary Medical Association, the nation’s leading advocacy group for veterinarians, is keeping out of an emergency such as a global pandemic, a VCPR can only be established after an in-person examination. The group’s ethical standards allow veterinarians to diagnose conditions, prescribe medications or treat animals virtually, but only after an VCPR has been established in person.

In states that allow virtual VCPR, Pawp veterinarians prescribe medications and diagnose as needed. But the company founder defended the practice and said the best pet care comes when “the physical and the digital come together”.

“A lot of times, especially in our industry, regulations lag behind what I would say is the latest innovation, the latest similar discoveries, so we want to make sure we strike the right balance,” said Atiyeh, CEO by Pawp.

“We have a huge shortage of vets, don’t we?” He continued. “The last thing you want is for a pet to need a certain medication…not getting the proper care they need, not getting the medication they need just because they could not physically access this veterinarian.”

He said the company’s medical team is constantly reviewing drugs to determine which types can be prescribed virtually safely, such as prescriptions for fleas and ticks, regardless of what the regulations say.

“The first is that we can prescribe? The second is what kind of drugs we are comfortable prescribing,” Atiyeh said. “We always set a very high bar on what we think is the right thing to do for pets.”

—CNBC Melissa Repko contributed to this report.


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