Dive Brief:
- Chewy is using AI to boost the efficiency of its customer care and is lowering costs in turn, CEO Sumit Singh said on a Q4 2025 earnings call Wednesday.
- While Singh didn’t share specific road maps of AI’s use in customer care “for sake of competitive outlays,” he said that these AI applications “essentially reduce handle times, improve on the ability for us to self-serve customers that then drives reduced contact rates, which then directly leads to lowering of costs.”
- Across the business, AI-driven efficiencies are expected to contribute “a low tens of millions of dollars benefit in 2026” and approximately $50 million or more in annualized savings in 2027 as AI capabilities scale, according to Singh.
Dive Insight:
The pet retailer is applying AI across the business, from the purchase experience and customer care to fulfillment and marketing operations.
Chewy plans to lean into AI to develop search relevance, product discoverability and personalization in 2026, and Singh views the emergence of agentic commerce models as a future incremental demand and distribution channel for Chewy.
The pet retailer is also using AI to meet the needs of customers who prefer self-service options. Earlier this year, Chewy launched AI-powered self-service for refunds and returns with “quite impressive” engagement and success rates, Singh said.
Internally developed AI tools are streamlining workflows and improving productivity, too, Singh said. These tools allow agents to extract information and deliver a consistent level of service with reduced effort.
“It improves our retention and quality that the agents essentially provide to customers but it also concurrently reduces our cost structure given that input metrics like average handle times and contact rates essentially decrease as a combination of those two,” Singh said.
The pet retailer reported net sales of $12.6 billion for the 2025 fiscal year, up 6.2% year over year or 8.3% on a normalized 52-week basis, according to an earnings release. Active customers grew 4% year over year to 21.3 million.
Chewy’s free subscription program with perks, Autoship, continues to drive sales. Autoship customer sales made up $2.7 billion in the fourth quarter, or 84%, and $10.5 billion for the year, or 83.3%, according to Singh.
