Petsmart 2007 Annual Report Download - page 9

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continually evaluate our store format to ensure we are meeting the needs and expectations of our customers, while
providing a return on investment to our stockholders. In 2005, we tested a store refresh program that builds on the
initial reformat and emphasizes our highly differentiated training and adoption services. We refreshed many of our
existing stores with this new format in 2006 and 2007 and expect to continue the program in 2008 and complete the
refresh of all stores in 2009.
Expand our pet services business. Based on net sales, we are North America’s leading specialty provider of
pet services, which include professional grooming, training, boarding and day camp. Pet services are an integral
part of our strategy, and we are focused on driving profitable growth in our services business. We believe services
differentiate us from our competitors, drive traffic and repeat visits to our stores, provide cross-selling opportunities,
allow us to forge a strong relationship with our customers, increase transaction size and enhance operating margins.
In 2005, we began the roll out of PetsHotel, a full-service in-store boarding facility for dogs and cats. The PetsHotel
experience includes 24-hour supervision by our trained caregivers as well as an on-call veterinarian, temperature
controlled rooms and suites, daily specialty treats and playtime. In addition, each PetsHotel offers Doggie Day
Camp
SM
, a day camp service for dogs in climate-controlled play rooms with other dogs and our pet-loving staff
trained in behavior assessment. As of February 3, 2008, we operated 97 PetsHotels. Pet services net sales grew by
22%, 26% and 24% in 2007, 2006 and 2005, respectively. We expect our ability to expand the pet services portion of
our business will continue in 2008.
Offer superior customer service. Our emphasis on the customer is designed to provide our customers with an
unparalleled shopping experience every time they visit our stores. Using a detailed associate learning curriculum
and role-playing techniques, we educate store associates to identify customer needs and provide appropriate
solutions. We measure their success in every store, and a portion of the annual incentive program for the store
management team is linked to customer satisfaction. By providing pet parents with expertise and solutions, we
believe we are strengthening our relationships with customers, building loyalty and enhancing our leading market
position.
Differentiate ourselves through effective brand management. We are focused on developing and strength-
ening our brand identity. In August 2005, we announced a new marketing campaign that repositioned the PetSmart
brand from its reputation as a “Mart” to “Smart,” to emphasize our capabilities as a resource of information, services
and solutions. As part of the campaign, we changed our logo to highlight the “Smart” piece of the PetSmart name
and rolled out new advertising that emphasizes our unique offerings for customers.
We have created tools to effectively communicate our unique value proposition and our ability to provide Total
Lifetime Care for pets, and we continue to build enduring relationships with our customers. Our customer loyalty
program, PetPerks, is available in all PetSmart stores. We will continue using a customer database that allows us to
track and analyze customer shopping patterns. We use this information to customize direct marketing and
promotional materials and to more effectively communicate with customers across all channels.
Drive efficiency and create a consistent customer experience by focusing on operating excellence. Our
operating excellence initiative — which emphasizes retail basics like store cleanliness, short check out lines, a
strong in-stock position, an effective supply chain and the care of the pets in our stores — allows us to provide a
consistently superior shopping experience, even as we grow. It simplifies processes, makes our stores more efficient
and easier to operate and allows associates to be more productive.
We believe these strategic initiatives will continue to drive comparable store sales growth, profitability and
return on investment.
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