Petco CEO Ron Coughlin’s keynote session at NRF 2023: Retail’s Big Show began with an unexpected guest — a puppy named Reeses joined Coughlin and NRF President and CEO Matthew Shay on stage for a few minutes. “I thought I’d bring a little friend along,” Coughlin said, introducing the dog as available for adoption from New York-based Muddy Paws Rescue. “I will be a failure if I don’t get Reeses adopted out of today.”
“This is obviously a dimension of your business and of the model that makes it very special,” Shay said as the puppy elicited “awwws” from the crowd. “There’s a different kind of an emotional connection to the business you’re in than there is maybe for some of the others that are in the retail space.”
“I’m very lucky,” Coughlin said. “Working around pets and being able to have a positive impact gives us all meaning at Petco.”
Did you miss us in NYC? Take a look at our NRF 2023: Retail's Big Show event recap.
Coughlin joined Petco as CEO in 2018. For the four years prior to this appointment, he served as president of HP’s Personal Systems division, and before that he held various sales and marketing positions at HP. Before that, he spent 13 years at PepsiCo.
“You’ve been in consumer-facing businesses before,” Shay said. “You were in technology. And you came to Petco and have re-engineered and transformed the business with a vision of setting up a one-stop shop where people can get everything they need for their pet. Can you talk about that journey?”
The first thing Coughlin did with the company was get it out of its own way. “There were 20 different metrics being tracked, so the first order of the day was corporate integrity. We simplified down to five metrics. We pushed data down to the store managers, making them general managers — the data was all being held at company headquarters — and held them accountable,” he said.
"We’re a $6 billion company — but we hired executives from Walmart, Best Buy. We had the A team."Ron Coughlin, Petco
“We’re a $6 billion company — but we hired executives from Walmart, Best Buy. We had the A team.”
Additionally, he pointed out, “When you are smaller, you need an opportunity to grow and differentiate yourself. Eighty percent of pet parents want the best for their pets — that was the opportunity. Also, 54% of pet parents want to one-stop shop.”
Looking at the larger environment, Shay asked Coughlin what he and his team see coming now, as opposed to the recent mid-pandemic period.
“There are really two vectors,” Coughlin said. “One is, if the consumer wants something now, how do you best provide it? So, you have basic metrics — are you stocked on key SKUs? To me that’s hygiene. We all know how to turn some of those knobs as dictated by the economic situation. I’m much more interested in providing value for loyalty: With every 10 bags of a certain food, you get a free bag.”
Coughlin also noted that Petco is providing a vital care program. At $19.99 per month for dogs and cats and $9.99 per month for birds, reptiles, fish and smaller pets, pet parents can tap into every resource the store offers. “What we’re buying,” he said, “is share of wallet.” That relates to rural markets as well as urban; Petco has opened a number of branches catering to farm animals. “There’s a seven-billion-dollar addressable market with rural veterinary care,” he said.
Toward the end of the session, the conversation turned to the retail workforce with Coughlin noting that the board had firmly approved his plans for extended benefits and salary. “We’ve got a program to send employees to vet tech school,” he said.
Observing that Coughlin sounds optimistic and committed to his path, Shay asked what he was particularly looking forward to. “I went to HP because I was excited about tech,” Coughlin said. “It was growing faster than anything else, and I wanted to be part of that. I would tell you that retail is just as fast.”