Tractor Supply gets Millennials who say goodbye to city life
Tractor Supply never had to “go country” because it’s always been that way. That doesn’t mean it doesn’t welcome former denizens of the nation’s cities as customers when they move to the rural and exurban markets the retailer serves.
The retailer, with over 1,900 stores in 49 states, bills itself as the largest rural lifestyle retailer in the U.S. Hal Lawton, Tractor Supply CEO, said last week at the NRF Retail Converge conference that the inside joke at the company is that it doesn’t “have a store within an hour’s drive of New York City but we have three within 20 minutes of Odessa, Texas.”
Rural lifestyle and, consequently, Tractor Supply’s business are constantly evolving, according to Mr. Lawton. Management is seeing developments resulting from gains the chain has made in attracting Millennials to shop in its stores and via its app or website.
“We had a four point change in the Millennial customer penetration in our business in the first quarter this past year,” he said. That includes some who live in cities and suburbs who adopt elements of rural living in their current locations and order online. Others, who moved from more densely populated areas during the pandemic, are now living in exurban and rural communities and investing in their new homes or engaging in activities such as growing their own vegetables and raising chickens.
Mr. Lawton said that mobility and housing data from June continues to show Millennials moving to markets his company serves. This is taking place even as cases of COVID-19 have fallen with increased vaccination rates.
The retailer’s Neighbors Club free rewards program has also been key to its success with over 20 million members representing about 60 percent of the chain’s sales. Tractor Supply rolled out a three-tier rewards structure for the program in April. The first group of Neighbors Club members earn a point for every dollar spent. Those who spend between $1,000 and less than $2,000 move up to Preferred Neighbor status and earn two points. Customers who spend two grand or more become a Preferred Plus Neighbor and can earn up to five points if they use the retailer’s TSC Personal Credit Card. Mr. Lawton said Preferred Plus members get free shipping on online orders, access to one same-day free delivery a quarter and a free trailer rental once a quarter.
DISCUSSION QUESTIONS: Do you see demographic mobility trends continuing to favor Tractor Supply? What sets the chain apart in your mind?