Petco Health and Wellness Company has joined the growing ranks of retailers offering flexible payment plans.
The pet supplies, services and wellness retailer is partnering with Klarna to offer the company’s “pay in 4” solution across Petco's nearly 1,500 stores nationwide, and the Klarna app. The solution gives Petco customers the option to split their purchase into four interest-free payments spread over the course of six weeks.
The new Klarna payment option will be available to Petco customers starting later this year and can be applied to all purchases, including merchandise and services. Customers utilizing Klarna's flexible payments will also still be eligible to earn rewards through Petco’s Pals Rewards account like any other purchase.
"Through the first quarter of this year, Petco generated strong double-digit growth and continued momentum by making complete pet care as easy, seamless, and accessible as possible – including helping pet parents support their pets' wellness without stressing about cost," said Petco chief digital and innovation officer Darren MacDonald. "With Klarna, we're creating another avenue for pet parents to do just that, whether they're welcoming a new family member, caring for a pet's unique health needs, or restocking on the basics."
The $119 billion pet category is poised to grow at an 8% CAGR over the next five years according to recent industry forecasts with higher growth projections in key areas thet include premium nutrition, services and vet, and digital. Millennials and Gen Zers not only represent the majority of recent growth, but 65% of 18- to 34-year-olds indicate they plan to acquire or add a pet in the next five years.
Petco is the latest retailer to partner with Klarna to allow customers to buy now and pay later. Other recent partners include Aeropostale. The company also recently moved into the social commerce space, with the acquisition of Hero.
"We're excited to offer Petco to Klarna's 18.5 million customers in North America, and to bring added payment flexibility to Petco's existing e-commerce and brick-and-mortar customers," said Klarna head of North America David Sykes. "Consumers—especially millennials and Gen Zers, many of whom are becoming pet parents for the first time—are turning away from traditional credit and demanding more flexible payment options.
Sykes added that the average order values of Klarna’s brand partners increase by 20-80% and conversions can climb by 20% or more.
Klarna's flexible payment options join a suite of shopping innovations Petco has introduced over the past eighteen months, including nationwide curbside pickup, same-day delivery and more.