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Bloomberg Businessweek has a good piece about PetSmart, saying that the traditional bricks-and-mortar retailer "has continued to fetch sizable returns despite pressure from Amazon’s The e-commerce giant’s pet store is well into its third year of business, with no shortage of treats and toys on offer. And those consumers regularly tasked with laying in a 31-pound bag of dog food probably appreciate Amazon’s 'free' delivery service more than most."

The reason, the story suggests, can be found in the company's self-description as a "retailer of services and solutions for the lifetime needs of pets." It is a description that does not mention "products," because PetSmart increasingly is finding that the "sticky" and growing part of its business is the grooming, training and boarding of pets, services that Amazon can't offer online and that serve as a key differentiator for PetSmart.
KC's View:
Boy, do they have this right.

I hadn't really thought about it, but the fact is that as much as I shop online for many things, I still buy my big bags of dog food from PetSmart … because that's also where we get the dogs groomed. (We have two, Buffett and Parker - and how perfect is it that we have two labs named after Jimmy and Robert B.) Not only do we get them groomed, but we even have a favorite groomer - Kayla - who does a great job at the Norwalk, CT, store. And so I've never even thought about buying dog food elsewhere.

That's the key to competing, isn't it? Finding things the other guy can't or won't do, and then investing in those areas of the business so that they become a differential advantage.

Retailers concerned about losing business to Amazon (and other e-railers) ought to take this lesson to heart. Don't just do the same-old, same-old, and hope that you can continue to appeal to people who don't like to shop online (a diminishing demographic, by the way).