Dive Brief:
- Tractor Supply will leverage its loyalty program, Neighbor’s Club, to help introduce its customers to Allivet, an online pet and animal pharmacy the retailer acquired at the end of 2024, Tractor Supply executives said on a Q4 2024 earnings call last week.
- In the coming quarter, Tractor Supply will update Neighbor’s Club member profiles so customers can include their pet prescription and veterinarian information as part of its efforts to integrate Allivet into the retailer’s larger ecosystem, according to President and CEO Hal Lawton.
- Neighbor's Club attracted record levels of new customers in 2024, reaching more than 38 million members, and the program achieved record retention rates as well, according to Lawton.
Dive Insight:
Tractor Supply is using Neighbor’s Club as the connective tissue between its three brands.
The retailer expanded Neighbor’s Club to its pet store, Petsense, in 2022, and the effort is still driving strong customer engagement, according to Lawton. The expansion helped Tractor Supply deepen relationships with its customers while attracting pet customers to each brand — half of Petsense customers shop at Tractor Supply as well.
Loyalty members are important to both retail brands’ health. Neighbor’s Club members account for 85% of sales at Petsense and 80% of sales at Tractor Supply overall, according to Lawton.
Part of the loyalty program’s success is its continued evolution. Tractor Supply updated Neighbor’s Club by adding new perks and lowering the threshold to earn rewards in March 2024.
“Neighbor's Club is truly a key differentiator for Tractor Supply, and we're committed to continued enhancements,” Lawton said during the call.
Tractor Supply saw customer experience success beyond loyalty as well. The company’s customer service scores hit all time highs, while “high-value” customer retention reached record levels, according to Lawton.
The retailer also developed data-driven archetypes that will help it localize stores.
All new stores and locations revamped as part of its Project Fusion remodels will tailor about one-quarter of their space to “better reflect customer need and further optimize the incremental sales opportunity of each unique site,” Lawton said.
Executives expect the company’s efforts to pay off in the coming year. Comparable store sales were up 0.6% year over year in the fourth quarter, with total sales reaching $3.77 billion, according to a company earnings report. Tractor Supply expects comparable sales to reach 1% to 3% for fiscal 2025.
