The largest e-commerce deal in South Florida’s history
By Chris Fleck
South Florida now has technology bragging rights that go beyond developing the IBM personal computer, the first smartphone (Simon from IBM/BellSouth), the largest web host (Hiway Technologies), the first pager (Motorola), application virtualization (Citrix), and mixed-reality pioneer Magic Leap.
Recently, executives at PetSmart, the Phoenix-based retail giant, decided they needed to move beyond brick-and-mortar stores in a big way, and purchased Dania Beach-based Chewy.com, the largest online pet retailer, for $3.35 billion. That’s larger than last year’s purchase of Jet.com by Walmart.
Chewy.com has more than 50 percent market share. In 2016, it had $900 million in revenue with almost $2 billion projected for this year. It was founded by Ryan Cohen and Michael Day, who met in a java coding chat room when Cohen was looking for a web developer for a previous company project. The pair’s first venture was an online jewelry store, but when that didn’t work out as planned, they identified an underserved market for pet products. It turns out they were right.
In 2012, their first year of operation, they sold $26 million in pet food.
In addition to competitive pricing, Chewy.com engaged customers with tips on pets, handwritten thank-you notes, and artist paintings of pet photos sent by clients. Today, Chewy.com employs more than 4,000 employees and boasts a loyal customer base.
The company’s headquarters are in the Design Center of the Americas building, located just south of the Fort Lauderdale-Hollywood International Airport—interestingly, the same place Magic Leap started. Initial indications are that PetSmart will operate Chewy.com as a subsidiary and keep the operations based in South Florida.
It would be smart to keep the pet passion Chewy.com has achieved, with Amazon only a click away. Currently, roughly 5 percent of pet products are bought online, leaving a lot of upside for a local tech star. ↵
Chris Fleck is on the board of the South Florida Technology Alliance and vice president of emerging solutions for Citrix Systems (Nasdaq: CTXS), a Fort Lauderdale company that provides secure delivery of applications and data.