Your second question on hard goods, the inputs that are driving the hard goods lag essentially are a couple here. One is it’s tied directly to the consumer’s mindset to inflation pressures and consumer mindset to pullback spending from discretionary categories. Number two is refresh cycles on hard goods are typically longer. So for example, if you recall the last 2 years, every bed in America pretty much got let’s say, a bad refresh, all €“ every new puppy got to create, etcetera. And so these refresh cycles are generally 12 to 15 months long, and they don’t get as refreshed as quickly refreshed as toys would, for example. So there is a little bit of that, we have to lapse as we play the kind of the timescale here. And the third one is pet household formation.
When you look at these options on relinquishment, they are basically flat to very slightly down from a year-over-year perspective. So as pet hold household formation returns to normalcy, which again is tied back to the inflationary environment, as these inputs correct themselves, we expect hard goods growth to return to normal.
Corey Grady: Thank you.
Operator: Thank you for your question, sir. Our next line of questions comes from the line of Lee Horowitz with Deutsche Bank. Your line is now open.
Lee Horowitz: Great. Thanks for the question. Maybe another one on NSPAC, for the quarter, can you help us unpack a bit how much of the NSPAC work you saw in the quarter was from share of wallet gains versus just general inflationary path and the pricing environment? And then I know we will have this conversation next quarter again. But just at a high level, when you think about the path forward for NSPAC growth next year, we will have some pricing pass-through, but you’re obviously comping it’s a big inflationary year and don’t necessarily have, say, a big €˜22 cohort that’s going to be in that, call it, rapid paces NSPAC next year. So how are you thinking about the inputs for NSPAC growth next year? Thanks so much.
Mario Marte: This is Mario. I’ll take that one. I can go on for a while on this answer. But look, let me kind of give €“ purpose there was a couple of things, as we mentioned in the prepared remarks, our NSPAC did reach another all-time high in the third quarter at $477. If you take that number back to Q1 2020, that’s a 34% increase over the last couple of years, so significant increase in grain of share of wallet there. The other thing is from a spending perspective, if you’re just comparing to customers that have been with us for a long time versus more recent customers. The customers we added during the last couple of years they are displaying similar spending patterns to customers we acquired back to the pandemic. And what that simply means is that they spend more the longer they stay with us.
We’ve seen that for several years. In fact, we’ve seen it back to the first cohort as we projected out to today. And I mean the first cover back in 2011 to today. Also consider that our current NSPAC is, as I said, about $477. And if you look at our oldest cohorts 11, 12, 13, they are spending about $1,000 a year with us. Add that to the fact that 60% of customers today have been with us for 3 years or less. So, think about what that means, there is this long curve that takes you from first year about $150, $200 to about $1,000. And on average, today, our cohort is €“ our cohorts are fairly young on a weighted basis, and the average NSPAC is $477. So, there is a tremendous amount of upside potential to how much more share of wallet we can gain over time from those customers.
