Tractor Supply Embraces AI to Enhance Customer Experience
First published on Consumer Packaged Goods, May 22:
Tractor Supply’s Al Lettera, senior vice president of IT, and Glenn Allison, vice president of IT applications development, took the stage at Path to Purchase Institute sibling brand CGT’s Analytics Unite event this month by first drawing attention to an interesting prop: a cowbell.
The cowbell was a nod to the 2000 “Saturday Night Live” sketch with Will Ferrell, and Allison symbolically rang it during the keynote presentation to emphasize the industry’s frequent calls for more artificial intelligence.
Tractor Supply, the largest rural retailer in the U.S., was quick to embrace AI, putting forth many use cases and “quick wins” across its business. The goal has been to enhance the customer experience — which ultimately, the duo said, entails enhancing the associate experience, customer service, and inventory management.
It also involves localizing product assortment, integrating the physical and digital channels, and streamlining operations — all things the retailer is betting on AI to not completely run or fix, but rather to improve.
TRACTOR SUPPLY SNAPSHOT
- Operates more than 2,200 stores in 49 states.
- Stores span roughly 15,000 square feet on average
- Stocks around 20,000 SKUs per store
- Offers more than 350,000 SKUs online
- Hit $14.6 billion in sales in 2023
- Average transaction is about $60
- 70% of orders attributed to store
- Has more than 50,000 full and part-time team members.
“It’s not just about the technology; it’s about how you augment the [community/customer connection] using AI,” Lettera said. “That human element is still there, so if something is wrong, there’s someone there to care for it. If there’s a gap in what’s being provided [to the customer], there’s a human there to make that connection.”
To gain momentum, a year ago, the Tractor Supply’s strategic leadership team started looking at a plethora of use cases, as well as where they could layer in AI experiences based on the investments they’re already making. Among them, the team determined inventory was particularly important.
Allison outlined some AI advancements Tractor Supply has made and is focusing on, including:
- Real-time inventory, as 70% of orders are attributed to stores
- Predictive inventory forecasting
- Dwell-time tracking and automated alerts
- Personalization by leveraging customer insights from its loyalty program through the mobile app, e-commerce, or in-store
- Equipping all team members with earpieces and AI communicators, known as Hey GURA, that are connected to the cloud so they can interface and get info about sales, store conditions, rewards, and more
- Computer vision (or “Tractor Vision”) using AI in stores to detect such things as long lines forming at registers
- Developing edge computer vision in-house and rolling out to 700 stores this year to virtualize POS and other AI processing
It’s not just about the “big-ticket items,” like developing a mobile app or leveraging a large language model to create unique responses for team members, Lettera added. It’s about the end-to-end experience across the organization, including supply chain, merchandising, marketing technology, digital, corporate systems, data simplification, and more.