Retail Innovation at NRF 2025: Tyler Davis of PetSmart on Merchandising, AI, and Pricing

All right.

Hello, everyone.

This is Omnitalk retail.

I am Chris Walton.

And I'm Anne Mazinga.

And we are coming to you live from nrf.

This is our first interview of the day.

It is from the exclusive Fusion Group podcast studio.

And look at this.

Look at these surroundings.

Yes, the Omnitok recording studio side of the Fusion Group.

Yes, it says we're on air behind us, too, Anne.

Because we are.

Yes, because we're always on air throughout this entire show.

As always.

You don't need a duck to show that.

Yeah, right.

Yeah, duck down, Tyler.

Duck down a little bit.

But standing between us and yes, you should stop by if we're here all day, if you want to see us, you want to come see all the cool tech on display in the Fusion Group booth.

Booth number 4938.

For those interested, and without further ado, I want to introduce the gentleman standing between Ann and myself, Tyler Dennis, the VP of.

No.

Tyler Davis.

Excuse me?

Tyler Dennis is a guy I went to college with.

Tyler Davis, the VP of Merchandise operations at petsmart.

Tyler, welcome to omnitalk.

Thank you.

It's really good to be here.

Appreciate it.

That's a different podcast that Chris is wanting to do with you.

Tyler.

Yeah, my college golf friend.

Yeah, exactly.

I had trouble not writing that every time I was communicating with Tyler, too, but, hey, it happens.

Well, Tyler, why don't we start by just giving us a little bit of background on you and your role at petsmart.

Yeah.

So I lead the merchandising operations team at petsmart, which really connects all things merchandise strategy with the final execution of how it shows up for our customers in stores, online.

It's totally a fun job.

I love it.

I've been at petsmart for five years in various leadership roles within merchandising.

And then prior to that, I was at Target in Minneapolis for 11 years.

As well, so online and in store.

The job entails both of those areas of operations.

Yeah, I mean, specifically, we spend a lot of time on in store execution, of course, but also connecting with the full enterprise.

Yeah, okay.

Got it, got it.

So you're at nrf.

You.

You were asking me a little bit before we went on air.

What brings you here, and how do you approach a conference like this?

Well, it's my first time specifically at the NRF big show.

I've been here a couple years just on the student recruiting portion.

That happens the weekend prior.

Okay.

Which is a ton of fun.

But honestly, I would say I've been to many conferences.

This is A huge show.

So I guess when I was getting ready for it, it was number one, setting an intent of like, what do you want to get the show?

What are some specific business questions you want to get answered?

And then I spend quite a bit of time prepping.

So I would say I have about, call it 60% of the show actually scheduled with meetings with current and future potential partners.

Awesome.

But I also wanted to have some time open as well to meet new people and attend the expo and also find some reasons to get inspired.

Yeah.

And what are some of those intents?

If you can let our audience in on some of that.

What are you looking to do here?

What are you looking to accomplish?

Well, honestly, I would say over the past couple years, since the first round of ChatGPT introduction and LLMs and what it means for how this could really disrupt our space, separating the hype with a couple of those words that could turn into drinking words and you'd be under the table by 10am with actual reality of like, what are some technologies that are going to fundamentally change?

This category is something that I really wanted to be able to be immersed in, talk with partners and really hear how that can transform the business.

Right.

So even though your job primarily looks at in store operations, you're still very intrigued by generative AI and the implications of it on your operations day to day.

Yeah, I see.

I mean, part of my role, not on the specific tech side, but all the merchandising systems that we have is if you think of data being, I mean, the ability to be able to bring together all the customer data that we have, demand signals, taking a look at externally what's happening and quicker than ever being able to give insights to our team of what do we need to pivot on to be able to exploit new opportunities.

That's really exciting to me.

It's just finding a couple of those big new technologies is something really interesting.

Tyler, how do you as a leader, which by the way, I bet the recruiting job for petsmart, especially with you and how prepared you are, is.

Is not difficult.

It's not a difficult one.

I bet you get a lot of people coming to work for you.

It's a fun place to work.

Yeah.

I bet having a gerbil ball roll through a meeting or a dog snoring in a meeting is pretty funny.

Well, I'm curious as a leader of people though, how are you having the conversation about using tools like ChatGPT, like how are you getting your team on board?

Because I think it's really important that as a leader you're focused on things like that because that's how some of these things get happen in a, in an organization.

But are there any things that you've, you've used or any advice you have for other people out there who are trying to lead teams and trying to utilize some of these new, new ways of working?

Honestly, I would say, like we're still very early adopters as an enterprise.

Okay.

I would say though, even for me, like, I'm just really interested in the space.

I spend quite a bit of time listening to podcasts early in the morning on my runs and then trying to find ways to be able to incorporate just into my routines, into the team routines.

So that could be taking a first pass at a deck with using an LLM to be able to help with that.

Okay.

A first pass even at reviews once in a while.

I do a lot of editing with once in a while.

Oh my God, yes.

But I think you have to start.

That's the first place I would have used it in my day.

Yeah, I think you have to start small though, otherwise it can really overwhelming.

But it's baby steps and starting to incorporate into business routine.

That's awesome.

Thanks for that.

Was off topic, but I was just kind of curious as a leader how you're coaching people, especially heading into this new year.

As you look back at 24, what are you most proud of in the work that you did and that your team did?

Well, I would say, I mean, across retail, it was a challenging environment.

The impact of inflation in the space and how the customer responded to it.

Yeah, it was a challenge, especially if you think of less money for discretionary spending that can impact our total product mix.

And of course that puts a headwind on our business model.

But I would say really early, we recognized what was happening.

And big retail operations can be a challenge to move really nimble, really quick.

But we spent a ton of time taking a look at our assortment architecture, really taking a look at value engineering actually in the product, taking a look at all of our promotions, and really doing a clean slate exercise to make sure that we had really compelling value propositions.

And then ultimately what my team did is a lot of work on actually taking retails down in stores.

So we did retail reductions on thousands of items in stores, which was a huge lift from a lot of scenario planning, building, business case, etc.

But I'm really proud of some of the green shoots that we were seeing.

Definitely some basket information's getting better, upt improving and then starting to see some early REITs and market share as well.

And were you hearing that from your clients that there was like, were overwhelmed by assortment, or was this strictly a move like, we just need to cut some skus here to make this easier and to boost profitability?

I would like there was some skew cutting.

A lot of it was just taking a look at the actual absolute retail that we had for things.

And the pet space is really fun because it's discretionary.

People love to spend money on their pets.

But taking a look at an inflationary environment, sometimes like a $10 bag of some really impulsive, fun holiday themed treats, we were taking a look at how could we actually turn more if we went to a $5 retail, a smaller size, but still not take too much out of the mix.

Right, right.

Yeah.

And people always say that the pet category is recession proof to some degree.

But even with that said, you guys were taking a hard look at price this year to make sure you're giving the best price to your customer day in and day out.

I would say if I just respond to that, I'm still very positive of the pet category into the future.

I think a lot of the socioeconomic trends that we're seeing, how people love their pets, want to spend money on them, are enduring.

Yeah, this was just a recalibration year that we saw in the space.

Mrs.

Omnitok would support that last comment wholeheartedly, my friend.

All right, so let's get down to brass tacks here.

I want to put your feet to the fire a little bit because we're at.

We're at NRF.

There's a lot of cool tech here.

But 2025, it's the here and now.

Right.

We're here in that year.

It's upon us.

What are you focused on in terms of improving merchandise operations?

Let's get to the brass tacks of how do you plan to do that in 2020 25?

I would say the three categories that I focus on with my team right now are, number one, just taking a look at our total calendar management that we have.

Okay.

Taking a long go to market calendar and really trying to condense it and also just have a nimble approach if we need to change anything based on what we're learning from the customer.

So making your merchandising more flexible.

Merchandising more flexible.

Get to market quicker.

The actual call dates that we need to make decisions of being able to pivot at as needed.

I would say on the planogramming side as well, I Think we do have more opportunity about more hyper segmentation as well, which can be a challenge.

But that's one of the reasons that I'm here at the show, to see there's some potential solutions for that.

Let me ask you a question about that before you go on.

So how do you look at.

Because one question we always, Ann and I always talk about too is how do you look at segmentation in store versus online as well?

Because online can be a great portal for segmentation if you use it the right way.

How do you think about that?

I would say my initial answer is online.

You want to have the full portfolio, but easy to shop that way.

If you're there for a mission trip, it's really easy to find what you want.

But then I also have other, call it plps experience pages.

To be able to have a little bit more impulsive or education building in store, I think is just more.

I think especially with a being able to ship from store as well and store serving as distribution centers, I think the future, what segmentation means is going to be different.

I do too.

Yeah.

Yeah.

You might not want to have as much hyper segmentation down to a store level, but I think that's something that we're debating.

And then from a pricing perspective, we're implementing a new pricing system which I'm really excited about.

Oh, wow.

We're about 50% implemented.

But this next year it's going to be the final two segments, which brings together a full pricing life cycle with clearance, clearance and promotions, which honestly allows us to see a ton of market intelligence of what's happening in the market, how are prices changing and actually coming up with recommendations as well for the teams.

Got it.

So you're investing in pricing technology as.

Well as a company.

That's really great.

All right, well, that wraps up our coverage today with you, Tyler.

Thank you so much for taking the time with us and sharing all that you did.

We wish you much success in your first big show.

Thank you.

And again, thanks for spending time with us.

Yeah, this was awesome.

Thanks again to Fusion Group for giving us a space to talk to people like Tyler.

We'll have more interviews coming at you in the course of the next couple of days and until then, be careful out there.