Chewy projects $50 million in AI-driven cost savings by fiscal 2027

Chewy expects artificial intelligence to reduce its costs by approximately $50 million in fiscal 2027, an increase from the low tens of millions projected for the current fiscal year. CEO Sumit Singh expressed high confidence in these figures during the company’s second-quarter earnings call, noting that the technology has moved past the experimental stage.

The projected savings are expected to stem from several areas, including customer service, pharmacy operations, veterinary care, and internal employee tools. Chewy recently launched ‘Cai’, an AI assistant for mobile app users, which currently handles common requests such as orders, returns, and account management. Approximately 30% of chats with Cai end without requiring a human agent.

Internal applications of AI also play a significant role. In the pharmacy division, AI is used to extract and validate data to lower the costs associated with picking, packing, and shipping orders. Additionally, at select Chewy Vet Care clinics, a voice agent named ‘Callie’ manages appointments and routine follow-ups. Chief Financial Officer Chris Deppe noted that more than half of the company’s volume flows through automated facilities.