US retailer, Tractor Supply Company (TSC) has grown to become a giant in the outdoor, agricultural, and animal supply market on the North American continent. This article follows this success that has defined the company from its very humble beginnings as a farm supply store.
When I embarked on researching Tractor Supply Company, I uncovered a long history of commitment to service and an ability to adapt to the needs of the modern consumer. I’ll be discussing the history of this brand and all the details that have emerged through the course of this article.
However, I want to start with a present day account of what the brand has accomplished in recent times. We’re all aware of the COVID-19 pandemic and the changes that have resulted. You hear it everywhere: things will never be the same again once this pandemic ends. For some, this may be the voice of doom and dread. On the other hand, many of the changes that we’re experiencing can be a chance to improve the way we operate moving forward.
Tractor Supply Company is one of the COVID lockdown success stories. Their recent success, and resultant economic growth, is based on two factors. One is the American trend toward a more rural lifestyle and an emphasis on outdoor living. The second, very important economic factor, has been their versatile approach to E-commerce. Online sales have grown exponentially and will continue to be a major growth point for the brand.
Obviously, online sales and delivery have benefited from the recent lock-down. Notwithstanding that some online retailers have been more successful than others during this time. The Tractor Supply model for E-commerce has proven to be exceptional. Current sales and stock prices clearly indicate that TSC is going places and is not about to slow down any time soon.
Hal Lawton (TSC CEO) believes that consumer habits, formed during the pandemic, will continue into the future. Of these trends, contactless payment was mentioned as one of the changes in the consumer mindset. Another, is the need for retailers that supply more than one category of merchandise.
VIDEO — History of Tractor Supply
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Tractor Supply Online Market Growth
There’s a sort of irony in the direction that TSC has taken with regards to online sales growth. For a company that started out as a rural supplier to the agricultural market, one would think of this as a sort of backwoods brand, not one on the forefront of modern developments. Yet, in recent years, the Tractor Supply brand has led the way in digital marketing, sales, and consumer interaction.
The web marketing model isn’t totally unique. Customers have three options for online purchases: instore collection, curbside collection, or home delivery. This is pretty much the norm for e-commerce. However, TSC has been more successful than many others in guaranteeing their delivery as being on time and secure. To this end, they have used technology, and personal customer attention, with remarkable effect.
A wonderful example of the manner in which Tractor Supply has embraced technology to improve service would be the intuitive mobile app, which is constantly evolving. Something that really impressed me was the detailed information that is exchanged. The TSC app allows the user to supply additional information to make deliveries faster and easier. A unique feature allows customers to enter the make, model, and color of their car. Why, you may ask? This helps delivery personnel identify the home with greater ease. They can look out for the car parked in the driveway. What a wonderful use of technology combined with basic common sense.
Another great use of technology to improve the customer experience is the “Autoship” option on their app. For consumable products that we use regularly, like pet food, you can tap this option and your order is automatically renewed. You can choose to have your delivery automatically scheduled according to customer request, like weekly or monthly. The customer also has the option to skip or cancel the automatic order at any time. This is all done with simple tap icons and dropdown menus. This service includes free delivery (subject to a minimum purchase of $49) and a 5% discount.
I believe this understanding of the modern US shopper and innovative use of tech solutions has this brand on a trajectory that is headed firmly in one direction – upwards.
Tractor Supply Physical Stores
Tractor Supply Company has 1,863 stores in 49 states. Store locations tend to be in towns on the outskirts of major metropolitan areas and rural centers. These are relatively large department stores, typically around 15,500 square feet. I think of TSC as a lifestyle department stores. Tractor Supply Company owns an additional pet supply and grooming brand, Petsense, with 180 stores in 26 states. Prior to 1987, TSC USA owned several stores in Canada. However, these operations have changed ownership. The details of which will be discussed when we look at the Tractor Supply Company Brand History.
What will you find at a Tractor Supply store?
On their website, Tractor Supply humorously state that they sell basically everything except tractors. Jokes aside, what do they actually sell? TSC is recognized as the largest rural lifestyle retailer in the US. For more than 80-years the brand has targeted predominantly recreational farmers and ranchers. In general, anyone with an interest in the rural lifestyle and outdoor living will find a wide variety of products in one place. Enthusiasm, as well as the product variety, continues to grow.
Tractor Supply has identified 14 main product categories, as well as an additional “Clearance Items” section, where bargain hunters can find reduced prices on sale merchandise. Browsing the website for products by description is made easier by clicking on one of the following main categories:
- Farm and Ranch.
- Poultry and Livestock.
- Lawn and Garden.
- Truck, towing, and off-road.
- Tools, hardware, and garage.
- Heating and cooling.
- Sporting goods.
- Outdoor living.
- Home goods.
- Boots and shoes.
This product diversity, combined with an active attempt at providing an exceptional online shopping experience, goes a long way in explaining their continued success as a major retailer in an increasingly competitive market.
A 21st Century Approach.
Modern corporate America is faced with numerous challenges. In order to meet the expectations of an informed public, a company needs to operate with a social conscience. This means that a brand is not simply meeting the needs of their customers; but has a responsibility to society at large. A recognized brand needs to comply with public expectations in the way they deal with their customers, employees, and social issues, like environmental concerns.
Tractor Supply refer to a team of over 33,000 members. This approach is, in itself, indicative of a comprehensive modern approach. When a company is this big, with over 30,000 employees and contractors, effective management can only be successful through a concerted team effort. A progressive modern enterprise cannot afford to consider only the needs of their shareholders and customers. The present company creed: “work hard, have fun and make money by providing legendary service and great products at everyday low prices.” exemplifies the this approach.
The TSC business model is certainly working. Sales for 2019 amounted to $8.35-billion. Economists forecast a sales growth of 24% – 29% during the second quarter of 2020. With this type of market presence, comes a lot of responsibility.
TSC – Environment and Social Responsibility
“At Tractor Supply, we know that our customers, Team Members, shareholders, and other stakeholders care deeply about what companies do for their communities, for their people and for the environment. As board members, we are deeply engaged with the oversight of the Company’s ESG issues, including being champions for diversity and equality and long-term value creation. We have prioritized our commitment to ESG and are focused on efforts for continual progress,”
Cynthia Jameson, Board Chairman, Tractor Supply. (Bussinesswire: 25 June, 2020)
The TSC 2019 Environmental, Social & Governance (ESG) tear sheet clearly outlines their commitment to environmental and social responsibility. By following the link, you can view the extent and application of this philosophy. For those who don’t have the time, I’ll highlight some of the efforts and achievements since embarking on their stewardship program in 2008.
Energy, Water, and Waste:
- Reduction in energy and GHG emissions.
- Energy management program introduced in 2013, resulting in over 130-million kilowatt-hours reduction in energy consumption.
- 10.3% reduction in water consumption.
Recycling programs for 2019, yielded the following results.
- 88,544 gallons of recycled oil.
- 17,560 tons of recycled cardboard.
- 3.3 million recycled wooden pallets.
- 679,038 vehicle batteries recycled.
Talent and Community
- Established diversity and inclusion council.
- Female employees constitute 49% of total workforce.
- Over 400,000 hours invested in training and talent development.
- Team participation in community volunteer programs amount to 117,000 hours.
- In 2019, fundraising and donation for community organizations – $8.5 million.
While little of this may be of direct benefit to TSC customers, it signifies a general commitment to long term sustainability. This tells us that the company looks beyond immediate profit and intends securing a better future, for the brand and the world it operates in. From an investor perspective, things are looking particularly rosy. With TSC earning a solid Zacks ranking of #2 Stock and an uber-impressive B Growth Score. With so much market uncertainty in the Coronavirus wake, this is refreshing news.
Tractor Supply Company – Brand History
TSC has evolved into a national retailer with an extensive market presence. The Tractor Supply brand history goes back some 80+ years. We’re going to delve into the past to see how this company has, not only survived, but prospered through some pretty tumultuous times.
In 1938, Tractor Supply Company started out selling tractor parts as a mail order business. The following year (1939), the first Tractor Supply retail store opened its doors in Minot, North Dakota. Thus began a legacy that would endure to the present day. The Company now has corporate headquarters in the Nashville suburb of Brentwood.
In 1966, TSC expanded into Canada under the name TSC Stores L.P. The first store began trading in November of this year, in London, Ontario. By 1987 there were 10 TSC stores in Ontario, at which time the US parent company sold their Canadian operations to Birch Hill Investment Company. Under their new ownership, TSC Stores L.P. expanded operations. By the time Birch Hill sold TSC Canada to Peavy Mart in July 2016, operations had increased to 51 stores.
Additional TSC acquisitions in the US include Quality Stores, Inc (2002) and Petsense in 2016.
Innovative advertising has been a driving force behind the TSC brand success. In 2004, the advertising slogan “The Stuff you Need out Here” gained recognition amongst the American public and advertising professionals alike. The campaign was so successful, that 2004 revenue rocketed to $1.7 Billion. This led to Fortune magazine listing TSC as one of the top 100 fastest growing companies in 2004.
Much of the TSC success story lies in establishing a niche lifestyle brand identity. This has enabled the company to compete successfully alongside big names, like Sears and Home Depot. This strategy has assured a steadfast future, with the potential for significant growth.