Walmart partners with Pawp to offer free telemedicine for pets

A shopper wearing a protective mask pushes a dog in a shopping cart in front of a Walmart store in Lakewood, California on July 16, 2020.

Patrick T Fallon | Bloomberg | Getty Images

Walmart enters the emerging pet telemedicine market.

The mega retailer has signed a deal with Veterinary Telemedicine Provider Pawp The companies confirmed to CNBC that they would offer Walmart+ subscribers access to the startup’s membership for a year.

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Unlimited access to veterinary telemedicine via video or text will be available to Walmart+ subscribers starting Tuesday, when Walmart is expected to publicly announce the partnership. Remote visits to the vet are increasing across the industry as consumers seek convenience. However, some vets say the practice could be risky for pets.

The offer will only be available for a limited time, Walmart said. Walmart+ subscribers have until November 19 to sign up.

The terms of the contract were not disclosed. Annual membership to Pawp starts at $99.

Walmart’s foray into veterinary telemedicine comes at a time when the company wants to increase customer loyalty, attract and retain higher-income customers, and better compete with them Amazon by making its subscription service more valuable through additional perks.

Walmart+ costs $98 per year or $12.95 per month. Similar to Amazon Prime, the Walmart service gives members access to unlimited free shipping and a host of other benefits, such as free access to Paramount+ and discounts at the pump.

Amazon Prime, which costs $139 annually or $14.99 monthly, offers its own partnerships, as members currently get one year of free access to GrubHub+, along with other perks like photo storage and discounts on recipes. By adding Pawp to its subscription, Walmart hopes to keep its membership service competitive with Amazon Prime.

“There’s no denying that over the last decade we’ve started to think of pets as part of the family,” Pawp CEO Marc Atiyeh told CNBC. “[Walmart has] a very strong thesis around the pet category and yes they want to be a big player in pet care and animal health in general and pawp really allows them to overtake the competition and do something that none of the other players have done.”

Promotional image by Pawp.

Source: Pawp

The deal comes as the $123.6 billion pet market in the United States is exploding and more and more American households are spending heavily to keep their furry family members healthy and happy.

According to a study by Bloomberg Intelligence, the US market is expected to grow to $200 billion by the end of the decade, and pet healthcare is the driving force behind this boom.

“During the pandemic, there have been huge numbers of pet adoptions and more important than just the numbers is how people are treating their pets. Pets become part of the family, people spend money on their pets and spend money on their pets’ health care.” Ann-Hunter Van Kirk, a senior biopharmaceutical analyst at Bloomberg Intelligence, told CNBC.

In the past, if an animal had a serious health problem or life-threatening illness, it was common practice to euthanize the pet, but today people are often willing to spend what is necessary to keep the animal alive, Van Kirk said.

She said Walmart’s partnership with Pawp “makes perfect sense” and shows how eager retailers are to grow their share of the pet supplies market.

While Amazon has ramped up its investments in human health, including through its $3.9 billion acquisition of primary care provider One Medical, Walmart has expanded its pet supplies business. It’s already one of the bigger players in pet food, prescriptions, insurance, and consumer durables like toys and beds.

Walmart’s expansion into pet telemedicine signals that the largest U.S. retailer is poised to expand its market share.

“[Walmart] has become the one-stop shop for all pet owner needs,” a company spokesman told CNBC. “By providing easy, convenient shopping and affordable pet care solutions in everything—from food, treats, toys, clothing, durable goods and services—Walmart delivers real value, especially in this inflationary age.”

The telemedicine visits could be used to treat “many common issues,” such as allergies, digestive issues, or “slight limp,” the spokesman said. The service can also be used for aftercare.

Traditional pet-only retailers such as Tough And Petco have already invested in pet health care to better compete with the big stores. In the long run, it will be a determining factor in whether they can grow and generate higher profits over time.

A Walmart logo seen from the parking lot of its store in Bloomsburg, Pennsylvania.

Paul Weaver | SOPA images | flare | Getty Images

Walmart’s partnership with Pawp will allow the company to better compete with Amazon and could increase sales of its pet products. The deal will also solve a crucial problem for Pawp: customer acquisition.

Walmart hasn’t publicly announced its Walmart+ subscriber count yet, but Morgan Stanley estimates the membership has reached 19.3 million and is steadily growing, according to an April research note.

Industry insiders have pointed out that attracting new customers is one of the biggest hurdles pet telemedicine providers face in order to scale their business, as the practice is still new and their value proposition may be limited.

Pawp, which has raised $27.5 million in funding since its inception in 2020, according to Crunchbase, also does not disclose its membership numbers. But the partnership now gives the company access to millions of potential customers.

The Risks and Benefits of Telemedicine for Pets

Promotional image by Pawp.

Source: Pawp

The space is also subject to a maze of regulatory challenges at both the state and federal levels, which has kept Chewy from expanding its telehealth service, CEO Sumit Singh previously told CNBC.

In most states, veterinarians are virtually forbidden from diagnosing medical conditions or prescribing medication unless they have previously personally examined the pet and established what is known as a veterinarian-customer-patient (VCPR) relationship.

During the Covid-19 pandemic, several states temporarily rolled back these guidelines in response to the global health emergency, but some states have made the changes permanent. It sparked a growing lobbying movement to change VCPR rules nationally, which Chewy and Mars Veterinary Health, a subsidiary of pet food and confectionery group Mars, have co-funded.

The American Veterinary Medical Association, the nation’s premier advocacy group for veterinarians, maintains a VCPR outside of an emergency such as a global pandemic can only be determined after a personal examination. The group’s ethical standards allow veterinarians to virtually diagnose diseases, prescribe medication or treat animals, but only after a VCPR has been created in person.

In states that allow virtual VCPR, Pawp veterinarians will prescribe medication and perform diagnostics as necessary. But the company’s founder defended the practice, saying the best animal care comes when “physical and digital go hand in hand.”

“In most cases, especially in our industry, regulations fall short of what I would call cutting edge innovation or cutting edge knowledge. So we want to make sure we strike the right balance,” said Atiyeh, CEO of Pawp.

“We have a big shortage of vets, don’t we?” he continued. “The last thing you want is for a pet to need a specific medication… not to get the proper care it needs, not to get the medication it needs just because it doesn’t have physical access to that vet has.”

He said the company’s medical team is constantly reviewing medications to determine which types are safe to prescribe virtually, such as flea and tick prescriptions, regardless of regulations.

“Number one is, can we prescribe? Number two is what kind of drugs we like to prescribe,” Atiyeh said. “We still have very high standards for what we think is right for pets.”

– CNBC’s Melissa Repko contributed to this report. Walmart partners with Pawp to offer free telemedicine for pets

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