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

Chris Walton: 00:00:00

All right.

Chris Walton: 00:00:00

Hello, everyone.

Chris Walton: 00:00:01

This is Omnitalk retail.

Chris Walton: 00:00:02

I am Chris Walton.

Anne Mazinga: 00:00:03

And I'm Anne Mazinga.

Chris Walton: 00:00:04

And we are coming to you live from nrf.

Chris Walton: 00:00:06

This is our first interview of the day.

Chris Walton: 00:00:08

It is from the exclusive Fusion Group podcast studio.

Chris Walton: 00:00:12

And look at this.

Chris Walton: 00:00:12

Look at these surroundings.

Anne Mazinga: 00:00:14

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

Chris Walton: 00:00:18

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

Anne Mazinga: 00:00:21

Because we are.

Chris Walton: 00:00:22

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

Chris Walton: 00:00:24

As always.

Tyler Davis: 00:00:24

You don't need a duck to show that.

Chris Walton: 00:00:26

Yeah, right.

Chris Walton: 00:00:26

Yeah, duck down, Tyler.

Chris Walton: 00:00:27

Duck down a little bit.

Chris Walton: 00:00:29

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.

Chris Walton: 00:00:36

Booth number: 4938

Chris Walton: 00:00:38

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

Tyler Davis: 00:00:45

No.

Chris Walton: 00:00:46

Tyler Davis.

Chris Walton: 00:00:46

Excuse me?

Chris Walton: 00:00:47

Tyler Dennis is a guy I went to college with.

Chris Walton: 00:00:49

Tyler Davis, the VP of Merchandise operations at petsmart.

Chris Walton: 00:00:53

Tyler, welcome to omnitalk.

Tyler Davis: 00:00:54

Thank you.

Tyler Davis: 00:00:55

It's really good to be here.

Tyler Davis: 00:00:56

Appreciate it.

Anne Mazinga: 00:00:56

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

Anne Mazinga: 00:00:58

Tyler.

Chris Walton: 00:00:59

Yeah, my college golf friend.

Anne Mazinga: 00:01:01

Yeah, exactly.

Chris Walton: 00:01:02

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

Anne Mazinga: 00:01:06

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

Tyler Davis: 00:01:12

Yeah.

Tyler Davis: 00:01:12

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.

Tyler Davis: 00:01:24

It's totally a fun job.

Tyler Davis: 00:01:25

I love it.

Tyler Davis: 00:01:26

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

Tyler Davis: 00:01:30

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

Chris Walton: 00:01:34

As well, so online and in store.

Chris Walton: 00:01:36

The job entails both of those areas of operations.

Tyler Davis: 00:01:38

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

Tyler Davis: 00:01:45

Yeah, okay.

Chris Walton: 00:01:46

Got it, got it.

Chris Walton: 00:01:47

So you're at nrf.

Tyler Davis: 00:01:48

You.

Chris Walton: 00:01:48

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

Chris Walton: 00:01:50

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

Tyler Davis: 00:01:54

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

Tyler Davis: 00:01:58

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

Tyler Davis: 00:02:02

That happens the weekend prior.

Anne Mazinga: 00:02:03

Okay.

Tyler Davis: 00:02:04

Which is a ton of fun.

Tyler Davis: 00:02:05

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

Tyler Davis: 00:02:07

This is A huge show.

Tyler Davis: 00:02:09

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?

Tyler Davis: 00:02:16

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

Tyler Davis: 00:02:19

And then I spend quite a bit of time prepping.

Tyler Davis: 00:02:21

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

Anne Mazinga: 00:02:28

Awesome.

Tyler Davis: 00:02:29

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.

Chris Walton: 00:02:36

Yeah.

Chris Walton: 00:02:36

And what are some of those intents?

Chris Walton: 00:02:38

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

Chris Walton: 00:02:40

What are you looking to do here?

Chris Walton: 00:02:41

What are you looking to accomplish?

Tyler Davis: 00:02:42

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?

Tyler Davis: 00:03:05

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.

Chris Walton: 00:03:13

Right.

Chris Walton: 00:03:14

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.

Tyler Davis: 00:03:22

Yeah, I see.

Tyler Davis: 00:03:23

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.

Tyler Davis: 00:03:46

That's really exciting to me.

Tyler Davis: 00:03:48

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

Anne Mazinga: 00:03:52

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.

Anne Mazinga: 00:04:02

Is not difficult.

Anne Mazinga: 00:04:03

It's not a difficult one.

Anne Mazinga: 00:04:04

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

Tyler Davis: 00:04:07

It's a fun place to work.

Anne Mazinga: 00:04:08

Yeah.

Tyler Davis: 00:04:08

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

Anne Mazinga: 00:04:14

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?

Anne Mazinga: 00:04:24

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.

Anne Mazinga: 00:04:32

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?

Tyler Davis: 00:04:42

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

Anne Mazinga: 00:04:47

Okay.

Tyler Davis: 00:04:48

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

Tyler Davis: 00:04:52

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.

Tyler Davis: 00:05:03

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

Anne Mazinga: 00:05:09

Okay.

Tyler Davis: 00:05:10

A first pass even at reviews once in a while.

Tyler Davis: 00:05:14

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

Anne Mazinga: 00:05:15

Oh my God, yes.

Tyler Davis: 00:05:16

But I think you have to start.

Chris Walton: 00:05:17

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

Tyler Davis: 00:05:19

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

Tyler Davis: 00:05:22

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

Anne Mazinga: 00:05:25

That's awesome.

Anne Mazinga: 00:05:27

Thanks for that.

Anne Mazinga: 00:05:28

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

Anne Mazinga: 00:05:35

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

Tyler Davis: 00:05:41

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

Tyler Davis: 00:05:46

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

Tyler Davis: 00:05:50

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

Tyler Davis: 00:05:58

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

Tyler Davis: 00:06:01

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

Tyler Davis: 00:06:05

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

Tyler Davis: 00:06:12

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.

Tyler Davis: 00:06:26

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

Tyler Davis: 00:06:31

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.

Tyler Davis: 00:06:41

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

Tyler Davis: 00:06:43

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

Anne Mazinga: 00:06:50

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?

Tyler Davis: 00:07:01

I would like there was some skew cutting.

Tyler Davis: 00:07:04

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

Tyler Davis: 00:07:09

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

Tyler Davis: 00:07:12

People love to spend money on their pets.

Tyler Davis: 00:07:14

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.

Anne Mazinga: 00:07:28

Right, right.

Chris Walton: 00:07:29

Yeah.

Chris Walton: 00:07:29

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

Chris Walton: 00:07:32

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.

Tyler Davis: 00:07:38

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

Tyler Davis: 00:07:44

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.

Tyler Davis: 00:07:50

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

Chris Walton: 00:07:53

Mrs.

Chris Walton: 00:07:53

Omnitok would support that last comment wholeheartedly, my friend.

Chris Walton: 00:07:57

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

Chris Walton: 00:07:59

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

Chris Walton: 00:08:01

We're at NRF.

Chris Walton: 00:08:02

There's a lot of cool tech here.

Chris Walton: 00:08:03

But: 2025

Chris Walton: 00:08:05

Right.

Chris Walton: 00:08:06

We're here in that year.

Chris Walton: 00:08:07

It's upon us.

Chris Walton: 00:08:08

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

Chris Walton: 00:08:12

how do you plan to do that in: 2020

Tyler Davis: 00:08:16

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.

Tyler Davis: 00:08:23

Okay.

Tyler Davis: 00:08:24

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.

Chris Walton: 00:08:32

So making your merchandising more flexible.

Tyler Davis: 00:08:34

Merchandising more flexible.

Chris Walton: 00:08:35

Get to market quicker.

Tyler Davis: 00:08:37

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

Tyler Davis: 00:08:43

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.

Tyler Davis: 00:08:51

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

Chris Walton: 00:08:56

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

Chris Walton: 00:08:57

So how do you look at.

Chris Walton: 00:08:58

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?

Chris Walton: 00:09:04

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

Chris Walton: 00:09:08

How do you think about that?

Tyler Davis: 00:09:10

I would say my initial answer is online.

Tyler Davis: 00:09:13

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

Tyler Davis: 00:09:17

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

Tyler Davis: 00:09:20

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

Tyler Davis: 00:09:24

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

Tyler Davis: 00:09:30

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.

Chris Walton: 00:09:40

I do too.

Chris Walton: 00:09:41

Yeah.

Tyler Davis: 00:09:41

Yeah.

Tyler Davis: 00:09:42

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.

Tyler Davis: 00:09:49

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

Chris Walton: 00:09:53

Oh, wow.

Tyler Davis: 00:09:54

We're about 50% implemented.

Tyler Davis: 00:09:55

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.

Chris Walton: 00:10:11

Got it.

Chris Walton: 00:10:11

So you're investing in pricing technology as.

Tyler Davis: 00:10:13

Well as a company.

Chris Walton: 00:10:14

That's really great.

Anne Mazinga: 00:10:15

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

Anne Mazinga: 00:10:21

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

Anne Mazinga: 00:10:25

We wish you much success in your first big show.

Anne Mazinga: 00:10:28

Thank you.

Anne Mazinga: 00:10:29

And again, thanks for spending time with us.

Anne Mazinga: 00:10:31

Yeah, this was awesome.

Anne Mazinga: 00:10:33

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

Anne Mazinga: 00:10:36

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