Where cats and dogs reign

Wagly caters to consumers’ increasing emotional bonds with their pets

The health and wellness craze has found an unlikely new home in the animal world. And if Shane Kelly has his way, your family dog or cat will soon be curled up right in the middle of it.

 

Kelly is founder and CEO of Bellevue, Wash.-based Wagly, a full-service pet care provider that embraces a new way of thinking about every phase of health and wellness for the family pet — veterinary care, boarding, grooming, training, day care and even trail hikes.

Kelly has more than 30 years of CEO experience in the health care and pet care industries, including with animal hospital chain Pet’s Choice and pet service center chain Best Friends Pet Care. STORES contributing editor Bruce Horovitz recently spoke with Kelly about his plans to expand Wagly into a national chain.

Can you explain the obsession that Americans have with their pets?
The emotional bond between pets and humans is becoming much more familial. For years and years, animals were basically viewed as little more than livestock or assets. But over the past 20 years or so, the emotions have evolved toward being part of the family. Those of us who own pets can feel that. And there’s a big growth in spending. It’s a $60 billion-plus industry that’s growing faster than most. That’s a reflection of the emotional bond that’s continued to evolve.

Have our pets become our kids?
At Wagly, we use the term “pet parents.” Pet spending goes up substantially as you have fewer children in the house, according to the Bureau of Labor Statistics. It might seem as if our typical customer would be a 36-year-old homeowner with three kids. It’s not. … Our primary purchaser is a 55-year-old woman who has no children at home. We have a very specific demographic profile — and I’m going to be careful not to reveal the secret sauce — but their average adjusted household income is $94,000.

So this 55-year-old woman — without kids at home — has some serious money to spend?
The typical 55-year-old female with no kids at home will spend about $1,100 annually on pet care services. That drops by about $300 for every kid that’s still in the household. Sure, a mom with four kids still spends on pets — but not as much.

What is your next-largest demographic?
Younger couples without kids. They’re out of college, in their early 30s and have no kids. These are professionals, often in the tech industry, with disposable income.

 

How did Wagly come to be?
I always had a special connection with pets. I grew up with part of me wanting to be a vet, but vets had to do things that I wasn’t capable of doing. Dealing with a badly injured pet is not something I could do. For years, I wanted to put out this concept of full pet care offerings.

After I sold Best Friends Pet Care in January 2015, I looked at the opportunities in the space. Invus Group, our private equity sponsor, helped us complete the financing in June 2015.

What are some of Wagly’s key offerings?
In the Seattle market, we have a Doggie Day Camp for as low as $24 a day. For people who work all day, it’s like child care for those who want their dogs taken care of. This includes programs of intellectual stimulation, like hiding dog treats in toys so that the dogs have to figure out how to get them out.

We also have an overnight care offering that we call STAY — with a $49 per night entry level or $79 luxury level. We don’t call it boarding. Employees stay with the pets all night. A trained STAY employee makes a visual walk-through at every pet center every 10 minutes. A vet is on call 24/7. We even put natural scents in the air that help to calm the pets down.

What does the luxury level include?
Those suites fill up first — particularly around holidays. These luxury suites have special beds for the dogs and even TVs. Employees will even go in and read stories to the pets before they go to sleep.

“Our brand promise is doing what’s best for pets.”

Shane Kelly
Wagly

Your focus on pet health and wellness could sound like code words for “spend — and spend more.”
Health and wellness is part of everything we do. Our brand promise is doing what’s best for pets. But we’re different because we offer comprehensive care. We have a full, comprehensive vet practice. We can do surgery with our own doctors and urgent care. We have full diagnostics and can do blood work.

But we also offer overnight care, day care, training and grooming. We’ll pick up your dog at your home — and bring it back, too. And if you’re a regular customer with an older pet who has special needs, we’ll even send a person to your house to watch the pet overnight.

Can you describe your new Bellevue location?
It’s about 15,000 square feet, with a common lobby for the vet and kennel. It’s all run as one business. When vets aren’t seeing patients, they are checking out the dogs in day care or grooming and looking for anything suspicious. They do wellness care and will contact the pet parents if they see something.

 

How big can Wagly get?
We’re not retail people, so we’re not competing with PetSmart or Petco. Less than 1 percent of our revenue is retail. Over the next five years, we’ll push east. But first we’ll fill in the West, including the San Diego market and Santa Barbara and the [San Francisco] Bay Area. Then we hope to open in Phoenix, Denver, Salt Lake City, Chicago and the New York metro area. We don’t have to roll out 50 [locations] in 10 years. If we roll out 10 or 20 and they are good, then we’re successful.

Does Wagly care for animals besides dogs and cats?
We’ll care for just about anything that’s a companion animal. We’d care for reptiles, snakes, lizards and rabbits, though 99 percent of our business is dogs and cats. Dogs are probably the biggest driver, at about 80 percent.

How are you marketing Wagly?
We have a strong social following, so we do quite a bit of organic social marketing. We also believe in grassroots relationship building.

This past weekend, for example, we took our mobile grooming van to a popular dog park near the Microsoft campus and gave out Wagly tennis balls and dog treats. We also picked out one dog and did an extreme makeover and hundreds of people engaged. That builds the brand. We have 300,000 followers on social media.

Can Wagly employees bring their pets to work — and do you?
Of course. We have a pet-friendly office. I often bring my dog, Magnus, to work, but he’s known to bark a lot, and we’ve had to figure out ways around that. He’s very loud.

This article was published in the December 2016 issue of STORES Magazine.