CHEWY INC (NSE:CHWY) Q2 2019 Earnings Conference Call Transcript

Sep 17, 2019 • 05:00 pm ET

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CHEWY INC (NSE:CHWY) Q2 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

[Operator Instructions]

Your first question comes from Brian Nowak with Morgan Stanley. Your line is open.

Analyst
Brian Nowak

Thanks for taking my questions. I have two. The first one, I think it's interesting you have a new Data Management Platform on marketing. I'd be curious to hear about as you're looking at data, what do you think are the one or two key factors you need to bring new pet owners onto the platform who are pet owners but not yet current buyers? How do you target those people?

Then the second question is on healthcare. Walk us through sort of the road map to really drive more of your current buyers to start purchasing healthcare and pharmacy products from you guys. Thanks.

Executive
Sumit Singh

Hey Brian, this is Sumit. Good to hear from you. I'll take the first one and then I'll probably have you repeat the second question. On the marketing side, remember we target -- I think it's helpful to recognize that primarily our spend is acquisatory marketing direct response. And so not only are we able to target across offline channels and online channels such as the classical TV and direct mail techniques, but also across an array of digital techniques, starting with kind of the Google network moving over to social media networks and so forth and so on.

And because of the nature of our spend and the response pattern, we're able to not only target, we're also able to attribute spend pretty accurately. And the investment that we're making in our marketing technology stack continues to refine that attribution so that we can essentially effectively recognize the fact -- we recognize already that our customers live full lives across marketing channels. So for us it's about reaching them and then optimizing -- or optimizing both their experience as well as our spend on our side. That's how we think about it.

And then second question was around -- was around healthcare that was not-buy [Phonetic] customers to start buying healthcare products. Yeah, it's a great question. I think, we think about it in multiple different angles. First of all, most of our current healthcare growth, which we're pleased with is coming via organic momentum, both organic momentum of the business as well as the exposure that we are bringing to our existing active customers on the proposition of health and wellness, a broad catalog of superior customer experience, and utilizing mostly our offline and some part of our online tactics to be able to reach newer customers.

So I said two things there. On active customers, we're relying on, A, the great conversations we're having with our customers that our customer service teams are having with our customer base. We're also relying on the knowledge that we have more than 3 million pet profiles on file and the way that we -- and the fact that we have a connection and a direct reach into these customers.

On newer customers, go back to the tactics that we deploy