When you can order your pet food online, why get in the car and go to the store? For PetSmart, a $9 billion retail business with over 1,650 stores, the answer lies in its services business, which offers grooming, day-care, training, and veterinary care.
“There really isn’t a way to digitally groom your pet,” says Mike Goodwin, who has been CIO of PetSmart since 2014. “We see our services business as a competitive advantage, because it gives the pet parent a reason to come into our stores.”
To ensure that pet parents have the best in-store experience, and do some shopping while they’re there, PetSmart is leveraging a strategy rooted in a suite of new digital technologies. “It all starts with convenience,” says Goodwin. “We are making it incredibly easy for the pet parent to read salon grooming ratings and reviews and then book a salon appointment with their favorite groomer. Their check-in process is very efficient, and when the appointment is complete, they receive a mobile notification and can pay right on the app. All they have to do is pick up their nice, clean-smelling pet and walk out the door.”
Digitally enabling the customer experience requires investments in technologies for employees, as well. “If salon associates are not available when the customer comes in for an appointment, everyone is frustrated,” says Goodwin, who recently deployed a salon capacity management capability that increased associate capacity by 15 percent. “We don’t want the lobby to be congested with pets or have groomers without appointments.”
The new PetSmart Reservation System allows the groomer to know who’s coming in, what services they’re getting, and the customer’s history of past services. “Now, salon associates spend less time on the administrative tasks and more time caring for the pet,” says Goodwin.
Building a future-focused analytics environment
With customer data at the heart of all of this convenience, Goodwin and his team had to improve the data capabilities of their systems. “We have always had the data, but the system that housed it didn’t have the flexibility we now need. So, we built and migrated a central pet and owner operational database that sits in the cloud. We made that investment because we could not afford to have any latency in the booking or check-in processes.”
How do you turn customer data into a usable asset? For Goodwin, it is all about creating the data model, structures, and environment that pulls data from a multiplicity of different sources. But Goodwin and his colleagues didn’t start with technology.
“We started with the business outcomes we were trying to achieve, none of which even had the word ‘data’ in them,” he says. “Our goals were marketing better to the customer, growing basket size, and increasing response rates on targeted campaigns. Once we had the outcomes and the financial metrics behind them, we built the next generation analytics environment that consisted of a data lake in a cloud-based environment.” But even with a clear vision and desired metrics, Goodwin had to build an analytics environment that would allow for the unknown. “We still had to take an educated guess in some cases, because we could not envision everything we would eventually need,” he says. “We had to structure the analytics environment for where we are going in the future, and not box ourselves in with what we need today.”
Extending software for the salon business
For years, PetSmart used packaged software to run its business, but there was no off-the-shelf solution to run a pet grooming and hotel business. So, Goodwin and his team took Salesforce’s Field Service Lightning product, which was designed for utility field technicians, and extended it to meet the needs of the salon business.
“The Salesforce tool had a fairly sophisticated scheduling and back office in-house management capability, so we had our own development team create UX interfaces for customers and associates,” says Goodwin. “The UX development was even more important than the core platform.”
Moving from project to product
PetSmart’s web and mobility teams had already been using agile development for several years, but with the new custom development requirement in the salon associate space, Goodwin was ready to push that one step further.
“The IT teams who worked on associate-facing software has been using a waterfall approach for decades,” says Goodwin. “But as we developed custom software for salon services, we needed the kind of rapid iteration that works best when we think about products, not one-and-done projects.”
To scale the product line management model, PetSmart adopted the Scaled Agile Framework® (SAFe), which brings agile principles to large, enterprise-wide technology initiatives. “We adopted SAFe, because it allows multiple product teams to work together to deliver new complex products in a continuous mode of iterative development,” he says. “It puts the product deliverables into two week increments and allows us to get very crisp about capabilities, so that by the time we have launched the product, it’s exactly what we all expected.”
What defines a product?
But introducing SAFe alone was not enough to move into a product model; the shift also required rethinking organizational design, titles, and the actual work environment. “The product model is not something you can just understand right away,” says Goodwin. “It took some effort up front to answer critical questions: Does a product include only mobile apps or back-end technologies as well? What is a product manager? Is it a dedicated or part-time role? How is it compensated? Does the product team all sit together?”
While Goodwin and his team are still evolving the product organization, they have decided that products include any capability consumed by a customer or a salon associate, that product managers are full-time roles staffed with business partners, and that product teams all sit together in new, modern spaces designed for collaboration. “Because our business partners are the product managers, they think about these products differently,” says Goodwin. “Rather than give us requirements and wait for the solution, they roll up their sleeves and are in it with us.”
Words of advice
With an agile, product-oriented, highly iterative model in full swing, Goodwin has advice to share:
1. Focus early attention on defining the term “product”. Goodwin and his colleagues started out by defining products as web and mobile app capabilities, but quickly realized that product teams had interdependencies with each other and back office systems, including point-of-sale, that were outside of that narrow, initial definition. “Looking back, I wish we had gotten to our current definition — all technologies that impact the customer and associate — more quickly,” he says.
2. Expect funding models to be different. Goodwin also learned that the financial project governance models of the past need to change for product teams. With waterfall, Goodwin’s finance partners could be comfortable with the fact that hard cost and benefit numbers were defined up front, regardless of whether the product actually achieved those numbers six months later. In a product model, however, the financial metrics are more iterative. “You start with an assumption of cost and benefit and report on them at every sprint release,” says Goodwin. “In the end, the incremental approach is a more accurate way to predict financial outcomes than with waterfall, because it keeps everyone focused on the same metrics. But it does require a shift in thinking for financial governance, which evolved with us.”
3. Pick the right product leaders. Goodwin and his business partners look for a certain set of competencies when selecting their product leaders. “Our business partners have been very good about identifying the right people for these roles,” he says. “We need people with learning agility and an interest in technology and improving processes.”
With their services business revenue up by 600 basis points since rollout, PetSmart is already seeing great business results from its shift to a product model. And while Goodwin does not envision that every system, like ERP, will require a product leader, he does plan to bring the product model to other parts of the business, including store systems, customer data analytics, and reporting.