Tractor Supply Co. reaped record profits by becoming the Peloton of rural America

Tuesday, July 20, 2021 by Robinhood Snacks | Disclosures

Bringing the tractor factor... minus the tractor. Hardware chain Tractor Supply Co. sells tractor-adjacent products like animal feed, tractor apparel, and anything that caters to the “tractor lifestyle.” Turns out, the tractor lifestyle has been booming: TSC reported record profits last quarter after a pandemic-fueled boom in DIY projects.

Like the Peloton of farmland... TSC has created a lifestyle brand focused on community — in its own words: "a rural lifestyle brand." TSC differentiates itself from competitors like Home Depot and Lowe's by prioritizing farm-specific needs. A few features of its lifestyle strategy:

  • Experts: Just like Peloton hires aspirational instructors, TSC hires “lifestylers” with ranching and farming backgrounds to establish credibility. A description of one employee: "farmer's daughter, barrel racer."
  • Events: Instead of doubling down on e-marketing, TSC partners with local orgs to host on-site events like pet clinics for your cow. As one employee put it: "Learn their pet's name, and you've got a customer for life."
  • Community: TSC opens stores in areas with high concentrations of cattle farmers, and has expanded its fast-growing “Neighbor's Club” loyalty program, which already has 21M+ members.

Niche sounds small, but it can be big... Unlike Home Depot, TSC isn't targeting the needs of everyone with a house — just like Peloton isn't targeting everyone who likes to sweat. TSC's core customers are "recreational farmers, ranchers, and all those who enjoy living the rural lifestyle." It was able to pull in big profits last quarter by catering to these farm-specific needs (“Fly Control Strategies for Your Barn,” anyone?). TSC says that this "specialized market niche" is what sets it apart from the competition.