Outstanding in his field
Here’s an actual email Joe Scarlett sent me after I explained I was working on a story about the keys to success in the business of farm-and-ranch retailing: “Call me, and I’ll fill up your recorder.”
Winner, winner, chicken dinner!
If you had to pick one person to share thoughts on farm-and-ranch retailing, good luck finding a better source than Scarlett. For 30 years, he held leadership positions at Tractor Supply, including CEO during the company’s leap to the stock exchange. Scarlett retired from the boardroom, but he can’t stay out of the stores. The business is in his blood.
And oh, by the way, if you invested in TSCO stock in 1994, that investment has grown by a factor of 48. I assume we have your attention now. Here it goes:
On customers: “Like any other good retailer, you have to understand who your customer is and you have to define that customer very clearly. In Tractor Supply’s case, we defined it as ‘hobby farmer.’ We’re not marketing to farmers, we’re marketing to people who enjoy the rural lifestyle.”
On store visits: “Everybody had to spend time in the stores. Half of my workweek was in the stores throughout my 30 years — even more as CEO. I took buyers with me. We took people from accounting and real estate. We spent time in the store and talked to every associate. We listened, we listened, we listened and listened.”
On the independent: “The family-owned farm and fleet store, the independent operator, they can be fierce competitors. They can be difficult because they’re aligned with the town. They can have larger stores with larger assortments. Some of them are very price-competitive and can give us fits in terms of pricing. So, the competition is difficult; you gotta do what you do best. And you gotta have the people in the store who know the products.”
On product differentiation: “We said this publicly: ‘If you’re selling this product to Walmart or Home Depot, don’t sell it to us. You’ve got to modify it. We don’t want to be the same as the other guy.’ Now, in some cases you have to make exceptions. Coca-Cola, for instance. But when it comes to paint, we knew that Home Depot does a fabulous job with paint. So, what we specialized in was paint for tractors and barns, and you won’t find that in Home Depot.”
On going public: “One of the most difficult things we had to overcome was trying to get Wall Street people — those Harvard MBAs in New York or Boston — to understand what the farm-and-ranch business is all about. We kept talking about ‘hobby farmers’ because that’s who Tractor Supply markets to. It was a difficult communication challenge, because they looked at us like we just landed from the moon.”
On the secret to success: “If there’s a secret, it’s that laser-like focus on a particular customer, a clearly defined customer — the hobby farmer. And if you focus on that customer and gear everything you do in terms of product selection and personnel selection and location and advertising, and do it all with a maniacal focus on that customer, that puts you in a special spot.”
Thanks, Joe. I would have been happy with a sound bite. You gave us a column.