Longtime readers know about Rudy…
My childhood family dog. A 30-pound, too-cute-for-this-world, eats-everything-in-sight pug.
He was great. So great, in fact, my pops always called me – his only child – “number two” … since Rudy was number one.
Of course, the “number two” thing was a joke. But behind every joke, there’s a hint of truth.
Rudy was part of the family. And we treated him like it. He ate what we ate. He slept where we slept. He traveled with us. The whole nine yards.
That may seem excessive. Indeed, ten or twenty years ago, it was excessive.
But times are changing.
And in today’s America, Rudy would’ve fit right in…
Pets across the U.S. are increasingly becoming a part of the family. They are starter children for young couples. They are replacement children for empty nesters. They are best friends for single children (I would know).
Pets are becoming humanized.
Naturally, this humanization has led to U.S. consumers spending more money on all-things-pet-related, from pet food to pet supplies to pet med expenses.
U.S. pet-care spend rose by more than 100% since 2010.
This trend is just beginning… mostly because the folks who love pets the most (Generation Z and Millennial consumers) are young folks who would spend literally anything on their pup.
That’s why global pet care sales are expected to soar by more than 50% over the next five years.
The “humanization of pets” megatrend is one which you should be bullish on for years to come.
In today’s letter, we will show you one explosive way to play this secular megatrend, by buying stock in a small, innovative e-commerce platform that could turn into your dog’s favorite company – and your next big winner.
The Hypergrowth “Stitch Fix for Pets” in the Making
Many of you are likely familiar with e-commerce platform Stitch Fix (NASDAQ:SFIX).
Its data-driven personalized styling service is morphing into the future of apparel shopping by fixing the industry’s biggest problem – too many options.
Today, we’re going to tell you about an emerging, hypergrowth e-commerce platform that is basically the “Stitch Fix for Pets” in the making.
BarkBox – who, through a $2 billion merger with Northern Star Acquisition Corp (NYSE:STIC), will hit the public markets at some point in the first half of 2021.
BarkBox is an omni-channel retail brand for dogs whose core product is its BarkBox monthly subscription service.
In short, dog owners pay just over $20 per month for BarkBox to send their pets a box of goodies, once a month. Each box has two toys, two treats, and one chew. Every month, the box has a unique theme, and all the goodies in that box fit that theme. For example, January’s theme is “Spa Day,” and the goodies in the box are designed to make it seem like your dog is spending the month at a luxurious spa.
Thus, just as Stitch Fix sends humans “ clothing fixes” every month, BarkBox sends dogs “goodie boxes” every month.
BarkBox’s secret sauce – much as is the case with Stitch Fix – is the data.
The company collects dog breed, size, sex, age, location, activity, and diet data on most of the pets in its ecosystem. BarkBox then leverages advanced analytics to derive insights from that robust data-set to find out what sorts of pets like what sorts of toys. The company uses that data to personalize each box to each dog, so that young, small dogs get young, small dog toys, and old, big dogs get old, big dog toys.
Pretty neat idea, huh?
BarkBox essentially takes the whole guess-and-check, timely process of shopping for a dog – and packages into a hyper-convenient, data-driven subscription service. It’s really the Stitch Fix for Dogs.
Now, I know what you’re thinking… personalized boxes for dogs… really?
Yes, really. Modern pet parents love their pets. They really treat them like children. They really are willing to pay for premium services for their pets.
Don’t believe me? Believe the numbers.
Back in fiscal 2014, BarkBox had 80,000 paid subscribers. Today, the company has 1.1 MILLION paid subs – representing astounding growth of ~1,200% over the past six years.
Clearly, the demand is there.
And BarkBox is doing everything right to capitalize on that demand through the highest-quality, most-trusted dog subscription box in the industry (the service has a Net Promoter Score of over 70, while reviews across the internet are broadly very positive).
Going forward, BarkBox will continue to grow its legacy BarkBox monthly subscription service. After all, there are 85 million pet families in the U.S. – only 1.3% of those families subscribe to BarkBox today, giving the company lots of runway to grow that core service.
But, perhaps more exciting, BarkBox is in the early stages of expanding into an all-in-one subscription service for all-things-pet-care.
BarkBox has either already launched and/or is the process of launching new personalized monthly services like BarkEats (foods), BarkHome (bedding and accessories), and BarkBright (dental products).
In other words, just as Stitch Fix is creating a style service so that you never have to go back to a mall in your life, BarkBox is creating a multi-faceted pet care service so that you never have to go back to Petco in your life.
If BarkBox successfully pulls this off – and gets millions of households across the U.S. to use its service for dog food, bedding, dental products, and toys – then this will one day be a very, very big company.
The market cap today stands at just $2.6 billion….
So, if you’re a pet lover and someone who believes that the humanization of pets represents a huge economic opportunity, then you should consider putting BarkBox stock on your buy radar today.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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