4 Ways Tractor Supply Co. Can Teach Retailers To Be Successful

You’d think a business headquartered in Brentwood, TN, that caters to recreational farmers wouldn’t have enough business to keep them afloat in today’s troublesome retail market.

You’d be wrong.

Tractor Supply Co., an 81-year-old retailer with 1,800 stores across the country, was recently honored when the president of their company, Steve Barbarick, was recognized as one of the leaders “shaping retail’s future”, alongside Jessica Alba, the founders of Warby Parker, and Allbirds.


Read on for 4 things the Tractor Supply Co. is doing right:

1. They have identified Their Niche

According to CNN Business, Tractor Supply Co. is a one-stop shop for recreational farmers, ranchers, and tradesmen throughout the exurbs and rural America.

“We have identified a specialized market niche,” says Tractor Supply. “We cater to the rural lifestyle.”

And it’s a lifestyle that brings in big business. In fact, the most recent Department of Agriculture census from 2012 indicated that there are approximately 800,000 American farms run by people who have primary careers other than farming. At the time of the census, these recreational farms accounted for 38% of all farms in the United States.

The number of recreational farms continues to grow, and so does Tractor Supply, which plans to open hundreds of new stores over the next few years.

2. They Focus on Winning the Trust of Their Customers

“One of the things that retailers that are struggling with today lack is the level of trust between the retailer and the consumer,” said Tractor Supply CEO, Greg Sandfort, in 2017.

How does Tractor Supply Co. avoid this problem? By emphasizing customer service.

The company hires workers with farming and ranching backgrounds and wants to bring on welders and horse owners as well. “We hire our customers. That is who the team members are in our stores,” says Tractor Supply’s CEO.

Many of the company’s customers frequent their stores to consult with employees on everything from repairs and big projects to how to care for their animals—services Amazon and other online competitors can’t convincingly offer, according to Scot Ciccarelli, an analyst at RBC Capital Markets.

Tractor Supply also provides expertise by actively posting videos and tipsheets online about how to raise chickens, groom horses, and fence goats.

“Our team members own animals, and they feed the 4health-branded product,” Tractor Supply’s President states. “The value of recommending — when you’re in a small box in a small community to someone like your neighbor — is incredibly powerful.”

3. They Established Themselves as the Authority for DIY Shoppers

Tractor Supply Co. stands out from big rivals like Walmart, Amazon, Home Depot, Lowe’s, Petco and PetSmart by positioning itself as the “authority” for its DIY shoppers.

At roughly one-sixth the size of a Home Depot or Walmart, the company doesn’t actually sell tractors at its 15,000 square-foot small-box stores, but it does carry nearly everything else its customers need to keep up their farms, ranches, barns, and homes, as well as look after pets and livestock.

It offers horse and bird feed, sprinklers, gardening tools, chainsaws, tractor beds, and garage storage. Plus there are snow blowers, lawn mowers, storage tanks, overalls, mud boots, heavy-duty welding shirts, and mini John Deere toys.

About 75% of Tractor Supply’s customers own pets, so in addition to livestock feed, pet food supplies are the company’s biggest and most important business because they drive repeat trips to stores.

Tractor Supply’s objective is to be a “trip consolidator”, saving customers separate visits to the hardware, pet, auto parts, and/or gardening store.

4. They Embrace Technology

Tractor Supply is not immune to the pressures caused by online shopping and it’s rapid growth.

“Amazon is a long term risk,” admonishes Scot Ciccarelli, RBC Capital Markets analyst. Amazon could eventually steal Tractor Supply customers who have to hop in their truck and drive up to 40 minutes to a store, he suggests.

Fortunately, Tractor Supply has woken up to the challenges presented by Amazon.

In fact, the company was quick to improve its website and tech capabilities, especially to attract customers making purchases from their cell phones (many in rural areas don’t have broadband). Tractor Supply also added more than 100,000 items to its website, as well as offering buy-online-pickup-in-store options—75% of Tractor Supply’s online orders are now picked up in stores.

Additionally, Tractor Supply Co. believes its new loyalty program, Neighbor’s Club, which boasts almost 10 million members, will help it more effectively tailor promotions. “We’re getting data now on our customers that we never had previously,” says Travel Supply’s president.

The Takeaway

Tractor Supply brought in $7.2 billion in 2018. They continue to grow when so many other retailers are failing.

That’s because they know their place in the market, they’re hyper-focused on customer service, and they have gained the trust of their customers with their expertise, which sets them apart from their competitors. Additionally, they’re not afraid to embrace technology to keep up with the changing face of retail.

What are you doing to strengthen and grow your company? We’d love to hear your ideas!

Find out how retailers like you are saving time and making money with the Rain POS system. POS, E-commerce, and Marketing all in one.

Sherene Funk is the author of the contemporary romance Autumn in Your Arms and two small business e-books. She is a voracious reader who owns more books than she can ever read in this lifetime. A graduate of Brigham Young University, she worked in advertising for many years before moving to her current writing position at Rain Retail Software. She researches non-stop to see what successful retailers do and loves to share what she learns with small business owners.