A shopper wearing a protective mask pushes a dog in a cart outside a Walmart store in Lakewood, California, July 16, 2020.

Patrick T. Fallon | Bloomberg | Getty Images

Walmart is jumping into the burgeoning pet telehealth market. 

The mega-retailer has inked a deal with veterinary telehealth provider Pawp to offer Walmart+ subscribers access to the startup’s membership for a year, the companies confirmed to CNBC. 

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Unlimited access to veterinary telehealth via video or text will be available to Walmart+ subscribers beginning Tuesday when Walmart is expected to announce the partnership publicly. Remote veterinarian visits are growing industry wide as consumers seek convenience, but some vets say the practice could be risky for pets.

The offer will be available for a limited time, Walmart said. Walmart+ subscribers will have until Nov. 19 to opt in.

The terms of the deal weren’t disclosed. Pawp’s annual membership starts at $99.

Walmart’s foray into veterinary telehealth comes as the company looks to deepen loyalty with shoppers, attract and hold on to higher-income customers and better compete with Amazon by making its subscription service more valuable with the addition of perks.

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

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

“It’s undeniable that over the past decade, we started thinking and looking at pets as part of the family,” Pawp’s 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 pet health in general, and Pawp really allows them to leapfrog the competition and do something that none of the other players have done.” 

Promotional image from Pawp.

Source: Pawp

The deal comes as the $123.6 billion U.S. pet market explodes, with more and more American households shelling out big bucks to keep their furry family members healthy and happy. 

The U.S. market is expected to grow to $200 billion by the end of the decade and pet health care is driving that boom, according to research from Bloomberg Intelligence.

“During the pandemic there was a huge number of pet adoptions and even more important than just the numbers is how people are treating their pets. Pets are becoming part of the family, people are spending on their pets and spending on their pet’s health care,” Ann-Hunter Van Kirk, a senior biopharmaceutical analyst with Bloomberg Intelligence, told CNBC.

When an animal had a serious health concern or life-threatening disease in the past, it was common to put the pet down, but now, people are often willing to spend what’s necessary to keep them alive, said Van Kirk. 

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

As Amazon has deepened its investments into human health, including through its $3.9 billion acquisition of primary-care provider One Medical, Walmart has been growing its pet business. It’s already one of the larger players in pet food, prescriptions, insurance and hard goods such as toys and beds.

Walmart’s expansion into pet telehealth signals the largest U.S. retailer is ready to grow its share of the market.

“[Walmart] has become the one-stop destination for all the needs of pet parents,” a company spokesperson told CNBC. “By providing simple, convenient shopping and affordable solutions to take care of pets across all areas — from food, treats, toys, apparel, durables and services — Walmart delivers real value, especially during this inflationary time.”

The telehealth visits can be used to address “many common concerns,” such as allergies, digestive issues or “light limping,” the spokesperson said. The service can also be used for follow-up care.

Traditional pet-only retailers such as Chewy and Petco have already been investing in pet health care to better compete with big-box stores. Long term, it will be a key factor in whether they can grow and make higher profits over time.

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

Paul Weaver | SOPA Images | Lightrocket | Getty Images

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

Walmart has yet to publicly disclose its Walmart+ subscriber numbers, but Morgan Stanley estimates membership has reached 19.3 million and is steadily growing, according to an April research note. 

Industry insiders have pointed to gaining new customers as one of the steepest hurdles pet telehealth providers must overcome to scale their businesses, because the practice is still new, and its value proposition can be limited. 

Pawp, which has raised $27.5 million in funding since its inception in 2020, according to Crunchbase, also doesn’t share its membership numbers. But it will now have access to millions of potential customers through the partnership. 

The risks and benefits of pet telehealth

Pet telehealth is just one arm of the overall pet health market and has been rapidly growing since the Covid-19 pandemic, when it first arose out of necessity

Chewy was one of the first major retailers to offer the service, which is currently free for its customers. Now, a slew of startups and large veterinarian chains offer telehealth to pet parents. 

The practice has come under scrutiny from some veterinarians who have expressed concerns the service could put pets at risk. It has become a major point of debate in the veterinary community. 

Some veterinarians have told CNBC it’s difficult to assess health concerns, including life-threatening conditions, when examining a pet virtually, and said there’s no substitute for a physical exam.

Others have argued pet telehealth helps bridge the access to care as pet owners contend with a nationwide veterinary shortage and swaths of pet health deserts across rural America.

Promotional image from Pawp.

Source: Pawp

The space is also subject to a maze of regulatory challenges both on the state and federal level, which has held Chewy back from scaling its telehealth service, CEO Sumit Singh told CNBC previously.

Most states forbid veterinarians from diagnosing conditions or prescribing medications virtually unless they have previously examined the pet in person and established what’s called a veterinary client patient relationship, or VCPR.  

During the Covid-19 pandemic, several states temporarily rolled back those guidelines to respond to the global health emergency, but some states have made the changes permanent. It’s sparked a growing lobbying movement to change VCPR regulations nationally, which Chewy and Mars Veterinary Health, a subsidiary of pet food and candy conglomerate Mars, has helped to fund. 

The American Veterinary Medical Association, the nation’s leading advocacy group for veterinarians, maintains outside of an emergency such as a global pandemic, a VCPR can only be established after an in-person exam. The group’s ethical standards allow vets to diagnose conditions, prescribe medication or treat animals virtually, but only after a VCPR has been established in person. 

In states that allow a virtual VCPR, Pawp’s veterinarians are prescribing medications and diagnosing where appropriate. But the company’s founder defended the practice and said the best pet care comes when “physical and digital get married.” 

“More often than not, especially within our industry, regulations lag behind what I would say is the latest innovation, latest kind of like findings, so we want to make sure that we strike the right balance,” said Atiyeh, Pawp’s CEO.

“We have a huge shortage of vets, right?” he continued. “The last thing you want is a pet that is in need of a certain medication … to not get the proper care that they need, to not get the medication that they need only because they couldn’t get physical access to that vet.” 

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

“Number one is can we prescribe? Number two is what kind of medications we are comfortable prescribing,” said Atiyeh. “We still have a very high bar on what we believe is the right thing to do for pets.”

— CNBC’s Melissa Repko contributed to this report.

Post source: cnbc

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