This dog daycare sees business booming during the pandemic

The demand for owning a pet surged amid the Covid-19 pandemic. Neil Gill - Dogtopia CEO joins Yahoo Finance’s On The Move panel to discuss how the dog daycare service pivoted its business model successfully during the pandemic.

Video Transcript

ADAM SHAPIRO: Let's invite into the stream Neil Gill. He is the CEO of Dogtopia. And we want to talk about what's going on because of the pandemic with the enormous number of people who are not only adopting pets, dogs, but also how shelter in place orders are helping Dogtopia expand its business.

Neil, good to have you here. And I asked you in the commercial break, you recently got ranked in an annual survey of the top 1,000 businesses, I guess, that deal with pets. You're now among the top 300, so congratulations on that. $95 billion pet industry-- how are you going to grow this going forward?

NEIL GILL: So personally, Adam and Julie, thanks for having Dogtopia [INAUDIBLE] today. So I appreciate it. It's a fascinating sector, particularly the sector that we're involved in, which is the dog daycare sector. And we're a franchise model and very excited to grow this through entrepreneurs across the US and across Canada.

And so, it's been interesting during COVID. So we went through a period of time where we did go through lockdown. We had to work with cities to have the business deemed as an essential service. And, you know, that was very rewarding. We are an essential business because we have to provide dog services to the medical workers and the frontline workers that keep our whole businesses moving.

And we have seen an incredible increase in franchise inquiry over the last six months. So we have sold 38 new franchises during COVID. And we've opened 20 new locations.

And so whilst COVID has actually slowed down certain parts of the business and whilst we were impacted in the very early stages, and we had to really pivot and innovate during that period, what we've found is we have come out the back end of this really stronger than we ever have been in the past. We got a great bunch of franchises that have just worked together, unified, and just really focused on what our pet parents need.

JULIE HYMAN: Neil, how did you pivot? Because one would think with a lot of people working from home, they wouldn't need doggie daycare, right? They would just stay home with their pet. So what kind of services were you offering to people who were in that situation?

NEIL GILL: Yeah, great question, Julie. It was more about how we pivoted the service of daycare. And so we did some research about pet parents because we have some incredibly loyal pet parents.

Our NPS school has sat at 90 now for a couple of years, which is crazy when you think about it. Like, the Nordstrom's of the world, which is considered the best brand from a service perspective, is at 74. Dogtopia is set at 90 now for several years. We grew to 94 during COVID just because of the level of service we provided our parents.

But the key thing we did was-- and immediately, we added to our app the ability to pick up and drop off at curbside. So we introduced a whole new range of sanitation protocols of sanitation of leashes and collars.

And we sent our teams out to the cars through the app. So they could actually ping the store through the app, let the actual team members in the store know they're coming. And so the pet parent didn't have to get out of the car.

On top of that, we already had in place some really wonderful pet safe cleaning protocols. We use sterile air as a product in our air conditioning systems. And we just, what we did was we put a lot of work around just informing our pet parents of those protocols, those safety protocols that are already in place. And then, really, that curbside pickup and dropoff was what they needed just to bring a little bit more confidence to their ability to still use daycare.

On top of that, we just continued the education process around the necessity of daycare for your dog. And this is a little bit of a myth that while you're at home, your dog doesn't need daycare. We believe the more you're at home, the more your dog needs daycare. So we think it's kind of funny that a lot of pet parents think that when they're at home, their dog's entirely satisfied and happy.

But it's untrue. Like, a good, balanced canine citizen needs good quality daycare for socialization, because they need to get out there, and they need to meet their BFFFs and play together. And we've trademarked that acronym because we believe in it so much. They need to exercise, and so a daycare dog is a very well exercised dog. And they need to be educated.

And you put those three things together, a parent on their own at home, while they're dealing with all of the Zoom calls and everything else that's going on, they just don't have time to do that. And I just know for myself that during COVID, with the work-from-home proposition, we're all working harder and longer than we've ever worked.

And I'm sure, you know, our core target demographics, the female millennial, and she's in professional roles. And we know from the surveys we have done that she's working longer hours and working harder and working harder at keeping teams unified through Zoom sessions and so on.

MELODY HAHM: Right. Neil, Melody Hahm here. It's perfect that you mentioned this as a 12-week-old puppy is outside of my bedroom, yapping away. I am one of those quarantine puppy purchasers during this time, I must say. But if you think about it, we've talked a lot about this. You mentioned the innovative sort of curbside dropoff, pickup options. That's of course how we've been doing our vet services.

Have you been investing in content creation online to really couple with the in-person services? Of course, we talked to retailers across the board where they've been really depending on e-commerce and additional sources of revenue during this time. Have you felt that was necessary? Are you thinking about investments there?

NEIL GILL: Yeah, that's a great question, Melody. It's something we've talked about for a couple of years. And it is an area that we will move into over time, but we haven't rushed into it, so. And we have seen a lot of businesses that have done an enormous pivot into that space.

We're a daycare provider and-- which is a service proposition, which is one of our strengths. You can't buy daycare online, right? And so-- and that's really been a benefit to the brand and to our businesses during this period.

So the e-com platform will certainly be something we look at longer term. What we're being very careful about is it'll be more of a curated range of products, rather than just your standard range of products. We don't want to compete with Amazon. We know we can't. We don't want to compete with the Chewies of the world. We don't want to compete with the Walmarts of the world.

But what we do know is we know our pet parents extremely well. And so part of our e-com strategy, which we'll launch later this year, will include a range of very holistic, curated products, just to enhance that joy of pet parenthood, which is part of our vision statement.

MELODY HAHM: And Neil, you talked a lot about your growth, really driven by the franchise model. Of course, franchise control and quality control are always important, but especially during the coronavirus, I imagine that that's even exceedingly more important during this time. How have you made sure to really educate your franchisees and make sure that everyone is on the same page during this really tumultuous period?

NEIL GILL: Yeah, incredibly important during this period. So we went straight into daily communication. So every single day, I send out a newsletter called the Scoop and just to keep franchisees really across what we're thinking, what we're doing, the new tools.

We've launched an enormous amount of new tools to help franchisees stay really focused. Because the key around this, when you've got business disruption going on like COVID's providing, you have to keep your franchisees incredibly focused on what's core to the business. And what's core to our business is that love about pet parents and our dogs.

And it's been incredible. We've run workshops. In fact, we have one running today, which is called the Fab Four. And we've asked our franchisees to dress up like the Beatles to join that. And it's really-- so part of it's about bringing fun into the proposition. We have launched competitions across the network because we have some incredibly competitive franchisees.

Like, we're a fun business. Like, when it comes down to it, we're a fun business. And the reality of dogs is they bring the best out in you. You know the T-shirt that says, "I wish I was half the man my dog thinks I am"? Like, that-- you know, T-shirts have a lot of purpose, right? And so we're big, big believers that dogs do bring out the best in us. We have seen that in our franchisees during this time. We haven't had any give up during this period.

And I've got to tell you, it hasn't been easy. And but what it's taken is an incredible amount of focus, an incredible amount of teamwork. And so we've launched a whole new range of tools. We've improved our operational services. From a marketing perspective, we've really ramped up communication with our pet parents.

ADAM SHAPIRO: It's a great story. It's absolutely a great story. And I apologize for cutting you off, but those of us who love dogs are cheering your success.