Tractor Supply is investing heavily in generative AI for a variety of applications. CEO Hal Lawton noted the buzz about the tech of the moment, and said that the retailer has already leveraged AI within its supply chain, human resources, sales and marketing activities.
Lawton called out the retailer’s AI experimentation in stores as perhaps it’s most important, however.
“But one of the things that I'm most proud of in the way we use AI is we said, ‘Hey, look, we want to really lean in and take a big bet in the area of customer service,’” he said during a keynote presentation at the National Retail Federation’s Big Show. “You know, at Tractor Supply we stand for customer service. We're not going to walk away from that.”
Lawton cited the most recent American Customer Satisfaction Index survey, which showed Tractor Supply and Ace Hardware tied for the highest level of customer satisfaction in their segment.
“We want to double down on that and increase our customer service levels even more,” he said.
A decade ago, Tractor Supply developed a tech assistant dubbed “Gura,” which stands for “greet, uncover, recommend and ask.” With the help of Microsoft’s Azure, Gura has evolved into a knowledge tool that can respond to a store associate who needs information in the moment, much like Apple’s Siri or Amazon’s Alexa.
Lawton witnessed the tool in action during a store visit in Georgia, when a customer asked about pet food for dogs with sensitive skin. Gura let the store associate know which dog foods might work for the customer, and which were in inventory at that store. The associate can then ask questions that might narrow down the choice, and get SKU and price information.
“So they can then do a consultative sale and show that to the customer if they'd like,” Lawton said. “But [it] became a huge, almost immediate win with our team members.”
Similarly, about a quarter of the company’s 2,200 or so stores are getting smart camera upgrades. That will allow the devices to not only monitor for theft, but also let associates know if a customer needs assistance or a checkout line has grown long.
“It's monitoring a customer's dwell time, it's monitoring their activity,” he said, noting that the tech will let associates know if a customer is looking at a riding lawn mower brochure or looking under the hood and may be ready for a consultation.
Tractor Supply, which has grown from a farm supply catalog to a chain that caters to a range of customers, is also expanding in more old-fashioned ways, Lawton said. The retailer plans 80 new stores for 2024, on its way to an ultimate goal of opening more than 800 new stores, and is revamping its loyalty program. The company has grown from $8.5 billion in revenues in 2019 to $15 billion in 2023, Lawton said.
“We've got so much opportunity and so much growth ahead of us,” he said. “We’ve just got to make sure we pick the right things to invest in, kind of in a stepwise fashion, to make sure it all kind of syncs together.”
