Speaker 1: Hello, and welcome to another episode of the ad Thoughts Podcast.
Speaker 1: I'm Tracy Alloway.
Speaker 2: And I'm Joe Wisenthal.
Speaker 1: Joe, did you enjoy the tomatoes that I brought you?
Speaker 2: For listeners? Tracy has an amazing tomato garden that she
Speaker 2: posts pictures of and I've become tomato obsessed over the
Speaker 2: recent years, and today she finally brought me in a
Speaker 2: box of tomatoes. I haven't eaten them yet as of
Speaker 2: this recording, but Tracy, they look absolutely amazing.
Speaker 1: Thank you.
Speaker 2: It looks so good. They exceed the hype.
Speaker 1: Let me tell you a lot of equipment goes into
Speaker 1: growing tomatoes. So you look at the tomato and you think,
Speaker 1: I have probably spent maybe fifty bucks in tomato cages
Speaker 1: and fertilizer and compost in order to grow that one tomato.
Speaker 2: How many hours of your labor?
Speaker 1: Well I don't count that. My labor is cheap. It's
Speaker 1: free for tomatoes.
Speaker 2: But yes, it's like gardening. All that stuff is a
Speaker 2: lot of gear. And one thing I know about you, Tracy,
Speaker 2: just and this, is that none of that as a compliment,
Speaker 2: which is that if you get into something like growing tomatoes,
Speaker 2: you take it very seriously. You're not just going to
Speaker 2: like throw some seeds in the ground to do what happens.
Speaker 2: You're gonna like buy all the right gear for it.
Speaker 2: See what the you know, the frames and all that.
Speaker 1: I kind of did just throw the seeds in the ground,
Speaker 1: although actually I grew them. That's not true. I grew
Speaker 1: I started them in an arrow garden in the kitchen
Speaker 1: they're in like February, and then I planted them in
Speaker 1: the ground. But my point is that there are a
Speaker 1: lot of people nowadays who are into growing their own
Speaker 1: food or maybe having their own chickens for eggs. Lots
Speaker 1: of people have pets, including myself, and of course there
Speaker 1: are businesses who cater to this particular type of thing, right.
Speaker 2: Not me because I don't have a garden or I
Speaker 2: don't have chickens or anything. But yes, absolutely, the sort
Speaker 2: of small farms, large gardens, et cetera sort of seems
Speaker 2: to be a booming era area hobbyist chicken owners like you.
Speaker 2: Maybe one day in the future and now there's probably
Speaker 2: a lot of money to be made and selling to
Speaker 2: people like you.
Speaker 1: Yeah, I am still very focused on my dream of
Speaker 1: declaring egg independence one day, but in the meantime, do
Speaker 1: you remember a couple months ago we were speaking with
Speaker 1: Samuel Ryans from Corbu and he mentioned a specific company
Speaker 1: that fits perfectly into this particular business. He talked about
Speaker 1: Tractor Supply and he called it one of the most
Speaker 1: interesting retailers on the planet. Right.
Speaker 2: I've always been curious about this company because, I mean,
Speaker 2: it's one of the most remarkable stocks. Several years ago
Speaker 2: as a one dollar stock. As of today, when we're
Speaker 2: recording this on August fifteenth, it's a two hundred and
Speaker 2: twenty two dollars stock, one of the huge sectoral winners.
Speaker 2: But also it's one of these companies where if you
Speaker 2: live in New York City you probably never encounter them,
Speaker 2: But for much of the country, it's just this massive
Speaker 2: retail brand that's sort of thriving and taking over.
Speaker 1: Yeah, it's sort of one of those sleeper hits, kind
Speaker 1: of like Monster Beverage or Domino's Pizza. I'm happy to
Speaker 1: say where I live in Connecticut, there is indeed a
Speaker 1: Tractor Supply store, and I enjoy going there. They let
Speaker 1: dogs in on a leash, so Pablo gets to come
Speaker 1: with me and sniff all the dog treats and look
Speaker 1: at the Baby Chicks and things like that. It is
Speaker 1: a fun experience.
Speaker 2: So the question is, how did this complany build a
Speaker 2: absolute juggernaut? How did they find people like you? How
Speaker 2: do people like you find tractor supply? And what is
Speaker 2: it that they have that others haven't been able to
Speaker 2: replicate or can't stomp out, Like why does it Home
Speaker 2: Depot or Low's Oral or whatever, just or Amazon? Like,
Speaker 2: how do they thrive?
Speaker 1: This is exactly it? And how much of it is
Speaker 1: them riding these sort of cottage core millennial hobby farm
Speaker 1: wave versus something maybe a little bit different. So I'm
Speaker 1: very pleased to say that we are finally doing our
Speaker 1: tractor supply at theisod our long awaited tractor Supply episode,
Speaker 1: and we do have the perfect guest. We're going to
Speaker 1: be speaking with Michael Roberto. He is the Bryant University
Speaker 1: Trustee Professor of Management and he has just published a
Speaker 1: case study for Harvard Business School all on the tractor
Speaker 1: supply store. Michael, thanks so much for coming on all.
Speaker 3: Thoughts, thanks for having me. Chasey, So, I have.
Speaker 1: A really basic question just to begin with. But Harvard
Speaker 1: Business studies, I hear about them all the time, and
Speaker 1: I think you wrote a very famous one about Trader Joe's.
Speaker 1: But what are they exactly, and how do they come
Speaker 1: about being created? How do you choose which companies to
Speaker 1: look at.
Speaker 3: So I've been writing Harvard cases since I was on
Speaker 3: the faculty there more than twenty years ago. And cases
Speaker 3: are supposed to put the students in the role of
Speaker 3: a senior leader at the business and put some decisions
Speaker 3: in front of them, put some data in front of them,
Speaker 3: and ask them instead of listening to a lecture. The
Speaker 3: students are supposed to grapple with a real world situation.
Speaker 3: And the idea is that the case is not an
Speaker 3: analysis in the sense that the professor's opinion shouldn't shine through,
Speaker 3: and we want the student to do the analysis. So,
Speaker 3: in the case of Tractor Supply, why is this firm
Speaker 3: so successful? We want the student to infer that based
Speaker 3: on an in depth reading of the case.
Speaker 1: I feel a lot of pressure now, I feel like
Speaker 1: I should have read the case study and come away
Speaker 1: with a lot of conclusions. But actually I just have
Speaker 1: a bunch of questions.
Speaker 2: Well, I do want to get to the company. But
Speaker 2: since we are talking about these case studies, first of all,
Speaker 2: like how did you pick this company? But then beyond that, Okay,
Speaker 2: you say I want it, I'm going to do something
Speaker 2: on Tractor Supply, like what is the research, what is
Speaker 2: the time process?
Speaker 3: What do you do?
Speaker 2: Then?
Speaker 3: Exactly So first, in terms of how I find them,
Speaker 3: all sorts of different ways, very opportunistically. In the case
Speaker 3: of Trader Joe's and Tractor Supply, they're both cases where
Speaker 3: I worked with David Ager at Harvard on both cases,
Speaker 3: and they're both places where I love them as a customer.
Speaker 3: I was struck by their customer service, struck by their success,
Speaker 3: and wanted to learn more. But in other cases, I'll
Speaker 3: write cases about companies that I've never been a customer for,
Speaker 3: so just finishing one up on Viking Cruise Lines. I've
Speaker 3: never been on a Viking cruise, but I got a
Speaker 3: mailing one day and it intrigued me, and that began
Speaker 3: my research as for how I write these cases. In
Speaker 3: the case of Tractor I dug around for a while
Speaker 3: trying to find someone at the firm that I could
Speaker 3: make contact with, and I finally did and explain to
Speaker 3: them the process of running a case, and they were
Speaker 3: gracious enough to invite me down to Franklin, Tennessee, just
Speaker 3: outside of Nashville, Brentwood actually and I spent a day there,
Speaker 3: immersed in interviews with a number of their people. And
Speaker 3: then it's months of library research, online research, reading everything
Speaker 3: from stock analyst reports to obviously the ten cas and
Speaker 3: the like.
Speaker 1: Do you go to a lot of the stores. Do
Speaker 1: you get to look at the baby chickens and admire
Speaker 1: some of the I don't know, fruit trees and fruit
Speaker 1: bushes that they're selling.
Speaker 3: Yes, So I visited a number of stores and actually
Speaker 3: spent about a half a day with the store manager
Speaker 3: and district manager at the store closest to my home,
Speaker 3: interviewing them, talking to their customers, their employees, really trying
Speaker 3: to get it an in depth understanding of a store.
Speaker 2: So for someone who say, lives in New York City
Speaker 2: and doesn't have any reason to buy chicken gear, if
Speaker 2: so much, says what is Tractor Supply Company? What is it?
Speaker 3: It is a store for the hobby farmer, okay, RBS.
Speaker 3: A person who's not making a living off of their land, right,
Speaker 3: this is a hobby. They have a full time job,
Speaker 3: and they're growing tomatoes like chasey.
Speaker 1: Are, They're raising chicken I feel seen, Yes.
Speaker 3: Exactly, And so it's a combination of buying feed for
Speaker 3: your animals, buying various supplies, or even buying animals themselves,
Speaker 3: like baby chicks.
Speaker 2: Huh.
Speaker 3: They sold nearly eleven million chicks last year. It's a
Speaker 3: pretty remarkable number.
Speaker 1: So one thing I didn't realize because I'm only familiar
Speaker 1: with the one tractor supply store where I live now
Speaker 1: in Connecticut, but they've been quite particular about their rollout
Speaker 1: strategy of stores. Can you explain where they tend to
Speaker 1: be located and how that might differ from some other competitors.
Speaker 3: It's really interesting to look. They're CEO how Lawton likes
Speaker 3: to joke that there's not one within thirty miles in
Speaker 3: New York City, but there's three within a twenty minute
Speaker 3: drive of Odessa, Texas. Right, I mean. But actually, one
Speaker 3: of the things I did in the case is I
Speaker 3: charted the Charlotte, North Carolina metropolitan area, and if you
Speaker 3: look there, there's an Interstate Highway forty five that kind
Speaker 3: of encircles the city. Within that beltway, there are eight
Speaker 3: Lows stores and not a single Tractor Supply. But on
Speaker 3: the outskirts of that city. Now you begin to start
Speaker 3: seeing those tractors show up in a number of smaller towns, just.
Speaker 2: For what it's worth for listeners. A little more numbers.
Speaker 2: Current market cap of the company twenty four billion, a
Speaker 2: little over twenty three one hundred stores. What is it
Speaker 2: about the sort of perimeter? Is it just they want
Speaker 2: to be around people. Their customers have yards, Their customers
Speaker 2: have a lot of space, basically, right, what is it
Speaker 2: about that strategy?
Speaker 3: They want people who have some land.
Speaker 2: This is key.
Speaker 3: So you've got to have some typical customer has somewhere
Speaker 3: between one and ten acres of land. So you have
Speaker 3: people who have the opportunity to have animals, or to
Speaker 3: have a large vegetable garden, to have a barn or
Speaker 3: a shed and fencing, things that would require upkeep, right,
Speaker 3: and so they're looking for that. They also want to
Speaker 3: have people who are interested in that rural lifestyle. So
Speaker 3: they call some of these people rural enthusiasts. They might
Speaker 3: not live on a farm, right, they might live in
Speaker 3: the suburbs like me. Neighbor across the street from me
Speaker 3: is a millennial couple and they've got chickens, right, They
Speaker 3: built a chicken coop from tract to supply. They only
Speaker 3: have about a half acre of land, right, So those
Speaker 3: are what they would call rural enthusiasts. And then the
Speaker 3: hobby farmer has a little more land. They might have
Speaker 3: a few more animals and a lot more vegetables or
Speaker 3: fruit trees.
Speaker 1: So why don't we just get to that sort of
Speaker 1: important question, which is, what is it about this business
Speaker 1: that has made it special or successful in your mind?
Speaker 1: And how much of it is they've discovered a niche,
Speaker 1: a growing niche at this moment in time, the hobby farmer,
Speaker 1: the cottage core, millennial, call it what you want, versus
Speaker 1: they are doing something different from other rural or home
Speaker 1: goods stores like Low's Home Depot maybe are running something
Speaker 1: like that.
Speaker 3: Well they're clearly. I mean John Ortis, is the head
Speaker 3: of stores for the company, told me we clearly want
Speaker 3: to stay out of the headlights of Low's and Home Depots.
Speaker 3: So there's strategy, a very explicit right. David Yaffi and
Speaker 3: Michael Kuzomano are are two business school professors who coined
Speaker 3: this term judo strategy many years ago, and the idea
Speaker 3: is avoid head to head competition with the big giants
Speaker 3: and even use the giant's strength against them the way
Speaker 3: you would in judo. And I think Tractor's done that
Speaker 3: really well. They have this very eclectic product mix. For example,
Speaker 3: you can't paint your kitchen with supplies from tractors to buy,
Speaker 3: but you can paint your barn or your tractor, right,
Speaker 3: So whereas if you go into Low's right, there's this
Speaker 3: enormous paint section, right, So they're very careful to avoid
Speaker 3: that direct head to head competition, and then they've got
Speaker 3: this really eclectic product mix.
Speaker 1: Well, this actually leads into one thing I wanted to
Speaker 1: ask you, which is why don't they compete on sort
Speaker 1: of home construction materials? And I think you mentioned in
Speaker 1: your case study that at one point they attempted it,
Speaker 1: but it turned out to be something of a disaster.
Speaker 3: They went through a near death experience not simply because
Speaker 3: of that, but around that time, this was in the
Speaker 3: late seventies early eighties, and they exited that market. That's
Speaker 3: another principle of judo strategy is when you know, confronted
Speaker 3: directly by a more formidable competitor, back away and realize
Speaker 3: what your strengths are and what theirs are. And bottom
Speaker 3: line is Home Depot has tremendous economies of scale. So
Speaker 3: just looking at their sales, right, they're more than ten
Speaker 3: times the size attractors supply. So think about trying to
Speaker 3: buy lumber and buy a lot of those building materials.
Speaker 3: Tractors just not going to be able to do it
Speaker 3: the way Home Depot can do it. And so it's
Speaker 3: trying to avoid that competition and instead compete, you know,
Speaker 3: in these other areas. And of course one key to
Speaker 3: this model is animal feed, because people have to buy
Speaker 3: feed for their animals. Come recession, come boom, it doesn't matter.
Speaker 3: And you know, as one of the executives told me,
Speaker 3: people love to talk about their animals as much as
Speaker 3: many people love to talk about their children. Right, So
Speaker 3: they love their animals and they're gott to take good
Speaker 3: care of them no matter the economic conditions.
Speaker 2: Can I just ask one sort of more step back question.
Speaker 2: The company was formed in nineteen thirty eight, and I
Speaker 2: think it started as a mail order catalog. I assume
Speaker 2: it wasn't. Did it at one point have a more
Speaker 2: explicit professional farmer standpoint, or like, did it evolve into
Speaker 2: this sort of Nichould found of the sort of non
Speaker 2: professional and how did it sort of find find that groove.
Speaker 3: They did start out, you know, as mail order and
Speaker 3: then a store in North Dakota actually their first retail store.
Speaker 3: They started out during the Great Depression, and they absolutely
Speaker 3: were serving professional farmers and selling them tractor parts. Today
Speaker 3: that's a small part of their business. They really went
Speaker 3: through a major transition after the founder sold. They were
Speaker 3: part of two different conglomerates, remember the big conglomerates of
Speaker 3: the seventies, and as you know, many of them did
Speaker 3: not thrive, and so eventually Tractor gets bought out and
Speaker 3: a man named Tom Hennessy leads a management buyout, and
Speaker 3: he really refashions the strategy around the hobby farmer and
Speaker 3: that's led to four decades of remarkable success.
Speaker 2: So when it comes to targeting the hobby farmer, it
Speaker 2: seems like obviously part of it is, as you say,
Speaker 2: the product mix and getting it right and sort of
Speaker 2: just having a very different overall set of goods than
Speaker 2: one might get at a home depot or loads. What
Speaker 2: about the role of customer service in that and how
Speaker 2: important is that element in terms of having staff that
Speaker 2: really like thinks about this particular customer.
Speaker 3: So they do a couple of inches things. One of
Speaker 3: the most interesting things is they say we hire our customers.
Speaker 3: They want people who Tracy don't go they got it's tempting.
Speaker 3: It's tempting. They actually will reach out to people they
Speaker 3: see in the stores. Often. My neighbor Scott has been
Speaker 3: approached several times about going to work there. Really he's
Speaker 3: a loyal customer. They want people who know and live
Speaker 3: the lifestyle, who know about how to raise chickens, and
Speaker 3: like they can always teach them store processes and retail
Speaker 3: metrics and all those types of things. What they want
Speaker 3: is someone who really understands the product.
Speaker 2: Sorry, isn't that rare? Like in your experience of just
Speaker 2: real quickly covering other stores, is that unique or do
Speaker 2: other companies also do that?
Speaker 3: I think others try to do it. It becomes more
Speaker 3: and more difficult as companies grow, and I think Tractor
Speaker 3: has been able to maintain that, but it is a
Speaker 3: question going forward. You know, they're up over two thousand stores,
Speaker 3: and that's always a question. Can we continue to find
Speaker 3: people who have that knowledge. I think that's what the
Speaker 3: home improvement chains used to do very very well, and
Speaker 3: it's been a challenge as they've grown.
Speaker 2: Yeah.
Speaker 1: So this is one of my enduring frustrations with our
Speaker 1: local lows, which as you go in and you ask
Speaker 1: a question, and rarely I would say, do you get
Speaker 1: reliable information back? But is it's different at tractor supply.
Speaker 3: These people are incredibly knowledgeable, but they also say to me,
Speaker 3: they told me, you know, we learned from our customers.
Speaker 3: One great story a district manager told me was about
Speaker 3: a customer who explained to him how he could detect
Speaker 3: what kind of animal was attacking his chicken coop, and
Speaker 3: so it's something he didn't know, right, But these conversations happen.
Speaker 3: They talk about creating community, and this is a big
Speaker 3: part of the customer service story, as they say, you know,
Speaker 3: our customer is the kind of person who wants to
Speaker 3: put their foot up on a bag of feed corn
Speaker 3: and talk to other customers. And then if you listen
Speaker 3: to those conversations, you learn a great deal about customer needs, right,
Speaker 3: customer wants and the lifestyle of those customers.
Speaker 1: Wait, how do you tell what's been attacking your chickens?
Speaker 1: I guess there'd be tracks, right. I know some people
Speaker 1: install video cameras as well to monitor, but well.
Speaker 3: You certainly can do that. But it turns out it
Speaker 3: has something to do with some animals will essentially devour
Speaker 3: the chicken right there and then, and so you see
Speaker 3: all the feathers in one place, and others will take
Speaker 3: the chicken away, and so you'll see this trail across
Speaker 3: your yard or property. This is beyond my knowledge chasing.
Speaker 3: That's all I can tell you.
Speaker 1: This is not I got to ask a tractor supplies
Speaker 1: says not.
Speaker 2: The Harvard Business School typical curriculum. Correct man, So many questions.
Speaker 2: You know, you mentioned this sort of near death experience
Speaker 2: that they've had when they've tried to go into building supplies.
Speaker 2: They have had some history of consolidation and buying competitors.
Speaker 2: Can you talk a little bit about the company's acquisition
Speaker 2: strategy and how it thinks about when it's opportune to
Speaker 2: buy and bring another company into the fold.
Speaker 3: They have been very careful about their acquisition strategy over
Speaker 3: the years. I think they've done two things with it, Joe.
Speaker 3: One is they've tried to use it to fill in
Speaker 3: pockets geographically, to accelerate write their ability to saturate the
Speaker 3: market rather than relying strictly on organic growth. But I
Speaker 3: think the second and maybe even more important part of
Speaker 3: their strategy has been to learn about particular categories where
Speaker 3: certain rivals have had strength. So currently their most recent
Speaker 3: acquisition looks to me least as an outsider like an
Speaker 3: attempt to learn more about sporting goods. This is a
Speaker 3: company tractor supply that doesn't have as big of a presence,
Speaker 3: and this is and of course I think they're at
Speaker 3: the point now though, where they may run up against
Speaker 3: antitrust issues. Right they had to divest some of those
Speaker 3: stores as part of that deal, and I wonder if
Speaker 3: they'll they'll be able to do any further acquisitions in
Speaker 3: the farm and rant store space. But up till now
Speaker 3: it has been a nice compliment to organic growth and
Speaker 3: this knowledge they've acquired, as I say, most recently, this
Speaker 3: one is allowing them to dabble a bit more in
Speaker 3: sporting goods fishing as an example of something where they
Speaker 3: think there might be opportunity. But they know there are
Speaker 3: some formidable, high knowledge players in that space like bass
Speaker 3: pro shops, So they want to learn more, right.
Speaker 1: Don't They have some partnerships as well? I think they
Speaker 1: sell Carhart.
Speaker 3: They have an amazing partnership with Carhart. They're one of
Speaker 3: the most one of the largest retailers of Carhart apparel,
Speaker 3: and the new store remodels they've been doing is part
Speaker 3: of Project Fusion, and they've been sort of making these
Speaker 3: Carhart store within a store little shops, consolidating the products
Speaker 3: they sell Ariat boots for example, another great partnership that
Speaker 3: they have. And of course they have really ridden the
Speaker 3: Yellowstone trend. Oh yeah, you know if you read the
Speaker 3: Wall Street Journal a few months ago, talked about how
Speaker 3: millennial New Yorkers who've never seen a farm in their
Speaker 3: life or running around wearing Yellowstone apparel. And so they've
Speaker 3: partnered with Lanny Wilson, the country music sensation, who's also
Speaker 3: a star on Yellowstone, and they do sell some Yellowstone
Speaker 3: apparel as well.
Speaker 2: What is their online component and how have they navigated
Speaker 2: e commerce?
Speaker 3: So this has been a push. Most recently, Hal Lawton
Speaker 3: became CEO just before the pandemic began. He had been
Speaker 3: at Macy's running e commerce for them and before that
Speaker 3: running e commerce for Home Depot for many years, and
Speaker 3: so how brought a lot of that knowledge with him
Speaker 3: and so they've made a big push. They were already
Speaker 3: starting to dabble with the idea of buy online pick
Speaker 3: up in store, and then of course, with the pandemic,
Speaker 3: they rushed out that process across the whole network. They
Speaker 3: found something pretty interesting. They admitted to me that some
Speaker 3: of the executives were skeptical about this because they thought, well,
Speaker 3: are we going to get less store traffic and less
Speaker 3: impulse buying if people are simply picking up at the curb.
Speaker 3: But what they found is that people live, in some
Speaker 3: cases a pretty long distance from a track supply store.
Speaker 3: So what they want to do is that they want
Speaker 3: to be able to get online see that the product
Speaker 3: is in the store. No, they can pick it up,
Speaker 3: let's say it's feed for their horse. But then once
Speaker 3: they get there, right now they've made that trip, they're
Speaker 3: going to go in and talk to their fellow customers.
Speaker 3: They're going to go in the store buy other things.
Speaker 3: But they don't want to make that trip unless they
Speaker 3: know what they absolutely need is there. So they're using
Speaker 3: the buy online, pickup in store process really interestingly.
Speaker 1: Just to press on this point though, how are they
Speaker 1: competing against Amazon? Because Amazon does have a pre as
Speaker 1: far as I can tell, a pretty good network, even
Speaker 1: in rural areas. It's not hard to get a bag
Speaker 1: of bird seed, for instance, off Amazon, and some cases
Speaker 1: you can get it in two or three days. So
Speaker 1: how do they compete with that?
Speaker 3: There's no question that the online players like Amazon are competitors.
Speaker 3: And I think one of the things that's different is
Speaker 3: they're selling big bulk pet food, right, much bigger bags
Speaker 3: and you can buy, for example at the supermarket, huge
Speaker 3: bags of animal feed, the kind of things that are
Speaker 3: pretty hard to transport, right, And so that's a key
Speaker 3: thing that's helping them deal with the online threat.
Speaker 2: Out of curiosity, where's the farmer's shop, Who's like, Oh,
Speaker 2: it's not a hobby anymore. Who's like the sort of
Speaker 2: next above, it's like, oh, this is actually becoming a
Speaker 2: professional thing, someone who like actually sells good maybe at
Speaker 2: a farmer's market or something like that. Like who's their
Speaker 2: competitor for the larger scale customer.
Speaker 3: Yeah, there are large you know, Agway and other players
Speaker 3: that serve farmers. Obviously, John Deere on the equipment side
Speaker 3: has dealerships throughout the country, as to do other players
Speaker 3: in the tractor business. So you've got people who are
Speaker 3: serving the professional farmer on the high end that's been
Speaker 3: consolidating over the years, very large players doing that, but
Speaker 3: there are really it's a much more fragmented market for
Speaker 3: the hobby farmer. Their largest competitor only has about one
Speaker 3: hundred and eighty stores quick that's bomb Guards now, and
Speaker 3: they've got over two thousands. So this is a formidable
Speaker 3: advantage they have in a fragmented market. The other thing
Speaker 3: I'd say, by the way, about the online presence is
Speaker 3: this creating community. And they actually talk about it like
Speaker 3: they say, you know, we're a little bit home Depot,
Speaker 3: We're a little bit Target and that we sell stuff
Speaker 3: for your home. We sell cool stuff like Target, but
Speaker 3: we're a little bit Starbucks about community. And this is
Speaker 3: the other piece that helps them against Amazon. So you
Speaker 3: can wash your pet.
Speaker 1: I was about to ask about the pet grooming stations. Yes,
Speaker 1: a little bit pet Co too.
Speaker 3: Yes, absolutely so they have self wash, pet wash stations.
Speaker 3: You can get your pet or your animal vaccinated. But
Speaker 3: my favorite thing they do is the chicken swap. This
Speaker 3: is actually in many cases organized by customers, but Tractor
Speaker 3: Supply hosts it in their parking lot and hobby farmers
Speaker 3: come and they bring their animals and believe or not.
Speaker 3: They swap, and they swap knowledge, and tractor, of course,
Speaker 3: is out there hosting the event. This is the kind
Speaker 3: of experiential retail that online players can't compete with as effectively.
Speaker 2: Trasey, I think we should film. We should do a
Speaker 2: live video episode at a chicken swap.
Speaker 1: Yeah, I would love to, Joe. Yes, let's all do
Speaker 1: a field trip to my local tractor supply for the
Speaker 1: chicken slap.
Speaker 2: Let's do it, you know. I gotta say I did
Speaker 2: not expect to get like sort of watery in my
Speaker 2: eyes reading a Harvard Business School case study, but I
Speaker 2: did at the intro of yours because it starts with
Speaker 2: an anecdote I guess of like a farmer who like
Speaker 2: delivered a calf in the middle of the night and
Speaker 2: needed so they ride away and called the manager. What happened?
Speaker 2: Tell the story?
Speaker 3: These stories are incredible that I heard from around the country,
Speaker 3: you know, And this one was the manager hears that
Speaker 3: a calf is being born. They go to the store,
Speaker 3: they get the materials the farmer needs at like one
Speaker 3: am in the middle of the night. They go there
Speaker 3: and deliver the product to the farmer's home, and the
Speaker 3: farmer wants to pay, and they were like, listen, the
Speaker 3: cast needs to be born. You need to deal with that.
Speaker 3: Just come in later in the week and pay, and
Speaker 3: they took care of the customer. Or one of my
Speaker 3: other favorite stories is this. This grandmother was walking through
Speaker 3: the store looking to buy feed for her granddaughter's horse,
Speaker 3: and one of the associates in the store realizes that
Speaker 3: this poor grandmother is kind of lost because usually the
Speaker 3: girl's dad, her son, would be buying it, but he
Speaker 3: died a few days earlier. The store manager runs out,
Speaker 3: buys a sympathy card, has all the team members sign it,
Speaker 3: and puts a two hundred and fifty dollars gift card
Speaker 3: in there for the grandmother before she walks out the
Speaker 3: door that day. These are kind of these, you know,
Speaker 3: as they call it, going the country mile efforts, which
Speaker 3: are a key part of their sort of cult. If
Speaker 3: you will, can we.
Speaker 2: Talk a little bit more about that and maybe even
Speaker 2: beyond trector, because I imagine lots of companies would like
Speaker 2: to instill something like this in their workforce, right. I
Speaker 2: imagine every manager would love it if their employees had
Speaker 2: to wherewithal to identify that buy the card, get the
Speaker 2: other people in the store to it. But I also
Speaker 2: imagine that is not easy to engender, and it's probably
Speaker 2: not easy at a time of high labor turnover in
Speaker 2: which you have a lot of new people who don't
Speaker 2: have that. Are there any patterns that are like from
Speaker 2: tractors specifically or other companies that sort of predict whether
Speaker 2: a company is able to get this out of their workforce.
Speaker 3: You know, you mentioned earlier the other case that I've
Speaker 3: become well known for that I wrote with David as well,
Speaker 3: David Ager, and that's Trader Joe's. Yeah, And I think
Speaker 3: about those two companies and boy, they have incredibly passionate
Speaker 3: customers who often become passionate employees. They treat them well,
Speaker 3: they pay them well, they offer them good working conditions.
Speaker 3: But it's much more than that, in my opinion, because frankly,
Speaker 3: they can get the same payer better at another retailer
Speaker 3: in many cases. But it is about the kind of
Speaker 3: environment where they give them some autonomy to really engage
Speaker 3: with the customer. They're not working off a script, they're
Speaker 3: not necessarily always doing the exact same task. They cross
Speaker 3: train them at Trade or Joe's, they cross train them.
Speaker 3: Tractors apply this ability to kind of do a variety
Speaker 3: of tasks to find meaning in your work because you're
Speaker 3: passionate about what you're doing. These are really important things.
Speaker 1: Yeah, I wanted to ask a related question. I'm trying
Speaker 1: to think how to phrase this, but how much of
Speaker 1: that dedication has to do with the actual material you're
Speaker 1: dealing with, so feed for animals and grarian equipment and
Speaker 1: growing things, versus the business model and the things the
Speaker 1: company is doing to engender I guess employee dedication. Could
Speaker 1: this be replicable at a place like home depot or
Speaker 1: does it take a specific type of person to really
Speaker 1: do it?
Speaker 3: I think you know, this can apply to other retailers
Speaker 3: as well, in different spaces. But I think this common
Speaker 3: tie among these kinds of players that I've seen is
Speaker 3: that they are finding these sort of very passionate customers.
Speaker 3: People already care deeply about the product or the lifestyle.
Speaker 3: I mean, the people at Trader Joe's. There's no more
Speaker 3: cult like brand, right, the line up, I mean, I
Speaker 3: remember when they opened the store and your Columbus Circle,
Speaker 3: the lines were incredible, right. So that certainly helps, But
Speaker 3: I think it's also about telling your employees that they're
Speaker 3: not robots, right, They can actually engage and have some
Speaker 3: ability to think on their own about how can we
Speaker 3: serve that customer.
Speaker 1: Well, the other thing I want to ask you about
Speaker 1: is I guess the pay structure at Tractor Supply and
Speaker 1: how much does that feed into engendering employee loyalty and dedication.
Speaker 1: And I was reading the business case and one of
Speaker 1: the unusual things it seems that Tractor Supply is doing
Speaker 1: is they're providing profit shares for not just managers, but
Speaker 1: for even part time employees.
Speaker 3: This is unique, right, So many of the store managers
Speaker 3: I talked to said that at prior retailers where they worked,
Speaker 3: the managerial staff would get profit sharing, but you wouldn't
Speaker 3: see it flow all the way down to the store employees,
Speaker 3: even part timers. And here last year, I think they
Speaker 3: paid more than a dollar per hour extra as part
Speaker 3: of profit sharing to your frontline team member in the store.
Speaker 3: That's pretty significant someone. I think. The other thing they've
Speaker 3: done is they've had to because the marketing conditions raise
Speaker 3: wages pretty considerably during the pandemic. So you've seen a
Speaker 3: thirty five percent increase in wages, and that's just to
Speaker 3: keep up with Walmart and Target and others who've been
Speaker 3: increasing wages, so they've had to do that, but they've
Speaker 3: also extended benefits and improved benefits for people. And then
Speaker 3: they did some very pandemic specific things. For example, they
Speaker 3: offered employees who had kids who were being schooled at
Speaker 3: home who didn't have a good personal computer, and they
Speaker 3: bought them chromebooks or other personal computers, about three thousand
Speaker 3: of these for the children and grandchildren of their associates.
Speaker 3: So they did take these extra steps to care for
Speaker 3: their employees during the pandemic that I think have paid
Speaker 3: off as well. The other thing I think they've done
Speaker 3: is they've tried not to extend themselves, so they've been
Speaker 3: hiring aggressively. They say they've tried to keep revenue per
Speaker 3: full time equivalent roughly equal, even as revenue has exploded,
Speaker 3: rather than trying to drive margin improvement in a dramatic way.
Speaker 3: They've reinvested both in the workforce and then in storymodel,
Speaker 3: so it's a nicer place to work. As they've improved
Speaker 3: the stores too.
Speaker 2: Let's talk more about the pandemic and how they've navigated
Speaker 2: the last few years, because this has been a really
Speaker 2: tough environment for anyone for obvious reasons. But I have
Speaker 2: to imagine there are some added complications or maybe that's
Speaker 2: not the right word, but with the tractor supply, in
Speaker 2: part because it's been hard to know and it may
Speaker 2: be still did TBD about like the degree to which
Speaker 2: certain lifestyle patterns that came about in twenty twenty and
Speaker 2: twenty twenty one are going to persist. And so obviously
Speaker 2: there are probably a lot of people that in twenty
Speaker 2: twenty like I'm gonna get chickens. I'm going to do this,
Speaker 2: and then in twenty twenty three it's like, damn, I
Speaker 2: have a full time job. I don't have time for chickens.
Speaker 2: These are like hard things to navigate and it's hard
Speaker 2: to know like what's going to last and what's going
Speaker 2: to be persistent and so forth. Talk to us a
Speaker 2: little bit about like the pandemic shock, the consumption boom,
Speaker 2: and how they've sort of managed to balance things out.
Speaker 3: This is the big question to me, and the big
Speaker 3: question in the case. We've seen the companies that have
Speaker 3: flamed out, right, We've seen the Pelotons of the world, right,
Speaker 3: but we've also seen some firms that have flamed out
Speaker 3: but they've seen a reset. Right. So home Depot just
Speaker 3: this morning announcing Earniers right, and comps are down two percent,
Speaker 3: so not dramatically, but this is a company that was
Speaker 3: recording pretty incredible comps Home Depot and lows were. As
Speaker 3: for Tractor, I mean, comps peaked over twenty percent during
Speaker 3: twenty twenty. That's a crazy number. You know, I worked
Speaker 3: at Staples before I became an academic. I mean, twenty
Speaker 3: percent comps. I never heard of such a thing. And
Speaker 3: yet you know, last year they were a little over
Speaker 3: six percent. Now this recent quarter they were like two
Speaker 3: and a half percent, So they've settled down, but they're
Speaker 3: still positive. The question is how much of a reset,
Speaker 3: you know, is happening and are these trends permanent? And
Speaker 3: as you say, well, people continue to raise the chicks,
Speaker 3: and I think this is the challenge they're navigating going
Speaker 3: forward that will be really important for them to navigate.
Speaker 3: So far, they've done a pretty good job relative to
Speaker 3: a lot of the other i'll call them pandemic flashes
Speaker 3: in the pan right at retaining customers.
Speaker 2: And the stocks way up since twenty twenty, so clearly
Speaker 2: it's not one of these mountaintops. That's just back to
Speaker 2: the base.
Speaker 1: So when you spoke to management, did you get any
Speaker 1: inklings or clues about what's next in terms of the strategy,
Speaker 1: because for the past few years it has just been
Speaker 1: you know, expansion, managing through the pandemic and trying to
Speaker 1: match supply with demand.
Speaker 3: Well, one of the biggest things they've been doing is
Speaker 3: transforming their side loots. I think this is a really
Speaker 3: interesting play. It comes with some risks, right, So if
Speaker 3: you know the sidelot, maybe the one you go to Tracy,
Speaker 3: it's got a lot of large agricultural equipment, big fencing
Speaker 3: for example, for your goats, right, and it's spread out
Speaker 3: typically in the sort of side parking lot. And what
Speaker 3: they've realized is a lot of wasted real estate there, right,
Speaker 3: because you've really spread that stuff out. And they've looked
Speaker 3: to actually build some small garden centers. They've opened a
Speaker 3: few hundred of these around the country. But holl Looten
Speaker 3: told me, we want to over index on certain kinds
Speaker 3: of gardening, right, So in other words, they're looking to
Speaker 3: sell more fruit trees than you would get at many
Speaker 3: other places. They're going to sell less flowers and more vegetables, right,
Speaker 3: because they don't want to compete head to head again
Speaker 3: with some of those big players in the home improvements So.
Speaker 1: Home Deepot and Lows sell all the annuals and perennials.
Speaker 3: So they're going to have a little bit of that tracy,
Speaker 3: but they're going to over index. They said, So, now,
Speaker 3: why is this potentially a risk? Well, I mean, I
Speaker 3: think it's appealing. It's appealing for me as someone with
Speaker 3: a big garden, the notion that I can go to
Speaker 3: tractor now where I go anyway for a lot of things.
Speaker 3: But this does nudge them closer to head to head competition.
Speaker 1: Right.
Speaker 3: Even with that over indexing, their product mix is now
Speaker 3: going to overlap just a little bit more with some
Speaker 3: of these other players. And this is an issue I
Speaker 3: think as firms try to drive comps as they mature,
Speaker 3: is even if they start out not competing very directly
Speaker 3: with other players, they encroach gradually. Think about Starbucks and Duncan,
Speaker 3: two firms that thirty years ago looked radically different, and
Speaker 3: yet Duncan sells lattes right. Starbucks has drive throughs. They've
Speaker 3: grown more like we call this strategy convergence, and that
Speaker 3: is the risk, but I think that's one key area
Speaker 3: and then the other key area Joan Tracy is is obviously,
Speaker 3: I think the idea of exploring sporting goods. As a
Speaker 3: result the recent deal, I will note that the store
Speaker 3: nearest me, the store manager said they've he's had a
Speaker 3: lot of success, for example, selling Kayaks already in his store.
Speaker 2: I mean it's interesting, you know, you talk about, okay
Speaker 2: when it comes to the outdoor space that they want
Speaker 2: to some more plants, but maybe fruits and vegetables is
Speaker 2: a way to differentiate themselves from the big flower sellers.
Speaker 2: Is there a way in sporting goods that it can
Speaker 2: differentiate itself from a bass Pro shop, like a way
Speaker 2: so that they could sell sporting goods but in a
Speaker 2: way that's more tractor and keeping to their true life.
Speaker 3: I wish I knew. I don't know, because I mean
Speaker 3: I am a big bass Pro customer. My son loves
Speaker 3: to fish. The knowledge the folks at bass Pro have
Speaker 3: and the selection, I mean, I can't imagine Tractor in
Speaker 3: their small stores is ever going to be able to
Speaker 3: offer that kind of selection.
Speaker 2: Why isn't best Pro publicly traded? Who owns that?
Speaker 3: Johnny Morris, the founder still owns them. Oh really, I
Speaker 3: might be wrong there, Joe, but I believe he still
Speaker 3: owns the company. And that's a very much a destination
Speaker 3: retail kind of place people drive. I think I wrote
Speaker 3: in the case that in in four or five states
Speaker 3: in the US, a bass Pro is the biggest tourist
Speaker 3: destination a state. That's amazing, pretty incredible.
Speaker 2: I've always wanted what's it is it in Memphis? Right?
Speaker 2: They have? There's the bass Pro shops pyramids. You always
Speaker 2: wanted to go to that.
Speaker 3: I do think there's a few things. For example, tractor
Speaker 3: sells gun safs, right. The tractor near me doesn't sell guns,
Speaker 3: but like so that's like an interesting niche thing. And
Speaker 3: by the way, I think they said to me, you
Speaker 3: know people buy them for things other than guns, right,
Speaker 3: So they just happen to be called gun saves, right,
Speaker 3: So they fund a little niche. This is this eclectic
Speaker 3: product mix, right, that they've found. I mean, my favorite,
Speaker 3: of course is the toolboxes for the trucks that are
Speaker 3: branded tractor Supply. I mean, people are literally advertising for
Speaker 3: the company and they just somehow spot Tractors.
Speaker 1: Supply baseball hats as well. Those are all over.
Speaker 3: You know what did they think they do? Million?
Speaker 1: I'd be glad to bring you with any excuse to
Speaker 1: go to the tractor supply store.
Speaker 2: Are buying decisions made at the local level, like is
Speaker 2: there a store buyer or regional buyer, like who who
Speaker 2: is empowered to make these choices? And I imagine that
Speaker 2: the good mix must be different in different locations in
Speaker 2: the country.
Speaker 3: It is. So they are working from their store support
Speaker 3: center in Tennessee, but they are in close communication with
Speaker 3: the local markets, and there's quite significant differences you could imagine, right,
Speaker 3: I mean the Northeast have much colder temperatures. Yeah, so
Speaker 3: not raising chicks, for example, looks really different in the
Speaker 3: Northeast than it does in Texas, for example, simply because
Speaker 3: of the temperatures, but also in terms of the types
Speaker 3: of things that you have. Right, So you're not having
Speaker 3: cattle in the Northeast generally speaking, right, but you might
Speaker 3: have someone with a few cows or a few bulls
Speaker 3: in Texas, for example. So they very much work on
Speaker 3: their team to tailor their products around the country. So
Speaker 3: the stores look a little different as you go around
Speaker 3: the country.
Speaker 1: Is that very different to how some other big box
Speaker 1: stores operate.
Speaker 3: No, I don't. I think the good ones all try
Speaker 3: to tailor you know. I know that at Trader Joe's
Speaker 3: they certainly try to deal with the fact that, for example,
Speaker 3: the demographic composition of the population looks very different in
Speaker 3: southern California than it does in Boston, right, And so
Speaker 3: I think Trader has been very effective at trying to
Speaker 3: understand that. So you'll see some differences. Obviously in Trader's case,
Speaker 3: it's always that same private label strategy, right, So they're
Speaker 3: not messing with that that's really fundamental to them. But
Speaker 3: the mix of the product's going to look different based
Speaker 3: on their assessment of the demographic composition of the population. Right.
Speaker 1: So, just going back to the purpose of the Harvard business,
Speaker 1: can you study, if you're a student reading this document,
Speaker 1: what managerial conclusions do you think they should come.
Speaker 3: Away with here? Oh? Boy, I guess I'm asking for them.
Speaker 3: If you're a student, don't listen to this, Yeah, No,
Speaker 3: I mean for me. I am going to teach some
Speaker 3: of these principles of judo strategy. How does a smaller
Speaker 3: player compete against players that are ten times their size,
Speaker 3: find a way to not compete head to head or
Speaker 3: try not to and even use the strengths of those
Speaker 3: rivals against them. Think about it. Can a large Hume
Speaker 3: improvement chain or can a pet Co do the chicken swaps?
Speaker 3: I think that's hard to do actually, right? You know,
Speaker 3: store models are incredibly rigid. That's one thing you know
Speaker 3: you note about retail. Think about how many retailers, for example,
Speaker 3: large retailers have tried to open a smaller format stores
Speaker 3: and failed.
Speaker 2: Why do they fail?
Speaker 3: It turns out it's like a machine. When you run
Speaker 3: a retailer. You have two three thousand and four thousand stores,
Speaker 3: they're all roughly the same size. They're cookie cutters, right,
Speaker 3: and now suddenly you want to operate a very different
Speaker 3: store format, much smaller, much more neighborhoody. It turns out
Speaker 3: it's really difficult. And what firms do is they we
Speaker 3: call this straddling. So give an example Trader Joe's. No
Speaker 3: one has been able to copy them. Well, remember Whole
Speaker 3: Foods tried that little experiment with the three sixty five
Speaker 3: by Whole food stores. These were these small little stores
Speaker 3: that only sold the Whole Foods private label. Total debacle.
Speaker 3: They closed them all right, Why because they were not
Speaker 3: as good as a whole foods right, and not as
Speaker 3: good as a Trader Joe's. They were sort of this
Speaker 3: hybrid four humped camel right that they tried to create.
Speaker 3: This is the same thing Delta did when they created
Speaker 3: Song right. Not as good as Delta, not as good
Speaker 3: as Southwest, some kind of weird thing in between.
Speaker 2: What is another maybe in a different industry or something
Speaker 2: where a company that you would teach is an example
Speaker 2: of a Judah, a successful.
Speaker 3: Judas Yeah, I mean the other one. As I say,
Speaker 3: I'm just finishing up as a case on Viking Cruise Lines. Okay,
Speaker 3: this is a really interest company and they I'll tell
Speaker 3: you how I got interested. I got a brochure that
Speaker 3: was really mad Joe and I got the brochure because
Speaker 3: Viking targets mature couples. And I was like, wait a second,
Speaker 3: I'm not al.
Speaker 1: And that's how you know you're getting old when you
Speaker 1: start ticking you know, different boxes for demographics and you
Speaker 1: start getting targeted ads.
Speaker 3: And my wife really rubbed it in. She goes, she's
Speaker 3: a fewyears younger than me, and she goes, well, I
Speaker 3: didn't get the brochure, but I you know, there's a
Speaker 3: page in the Viking brochure and it says what Viking
Speaker 3: doesn't do. And this intrigues me because this is what
Speaker 3: I teach. The idea of you know what Michael Porter
Speaker 3: wants rite, the idea of the essence of strategy is
Speaker 3: choosing what not to do, making trade offs right trader,
Speaker 3: you know, not selling branded goods and not doing self
Speaker 3: checkout and not doing traditional TV ads, all the things
Speaker 3: Trader Joe's doesn't do, right Tractor not doing a lot
Speaker 3: of the things the big homer fruit change to you, Well,
Speaker 3: what about Viking. No one under the age of eighteen
Speaker 3: can go on one of their ships. I love it,
Speaker 3: so it is truly for the mature couple. They do
Speaker 3: allow you to bring your family. The no casinos, right,
Speaker 3: they over index on river cruising, dominate in river cruising,
Speaker 3: smaller boats much more intimate. So they found a way,
Speaker 3: right and as it turns out, World Caribbean right all
Speaker 3: about the big boats. Wait, holy cow, we got to
Speaker 3: compete in the river segment. By the time they realized
Speaker 3: what was going on, Viking had established a dominant presence
Speaker 3: on the European rivers with these smaller boats. And it's
Speaker 3: just another example of a firm that really did this
Speaker 3: quite well.
Speaker 1: Here's the important question, are you going to go on
Speaker 1: a viking cruise?
Speaker 3: Now? So now I'm intrigued, but I think I'm still
Speaker 3: too young, Tracy. I hope so, but I'm intrigued.
Speaker 2: There's like what twenty one hundred or somewhere two thousand
Speaker 2: somewhere of these locations, Like how much more space is
Speaker 2: there in this country for for tractors.
Speaker 3: So Tractor just announced with their recent quarterly earnings release
Speaker 3: that they've raised their target for stores to three thousand
Speaker 3: across the country. Analysts reacted really positively to that. I
Speaker 3: always worry about aggressive growth targets, but that's not a
Speaker 3: you know, dramatic number. They're already over two thousand. But
Speaker 3: you always worry about that saturation issue when you're trying
Speaker 3: to growth locations, no question about it. So but yes,
Speaker 3: they are going to try to get to three thousand,
Speaker 3: but not overnight. I think it looks to be a
Speaker 3: fairly gradual plan, and I think it's interesting some of
Speaker 3: the retailers who've taken that slow, gradual approach. That's hard
Speaker 3: to do. You know, management gets antsy sometimes, ye see
Speaker 3: if they stick to it. But right now the plan
Speaker 3: is a gradual growth to three thousand.
Speaker 1: All right, Well, Michael, thank you so much for coming
Speaker 1: on Odd Lots and explaining the tractor supply business case.
Speaker 1: Really appreciate it. That was fun.
Speaker 2: That was so good. Thank you so much.
Speaker 3: Thanks Joe, Thanks Chasey.
Speaker 1: So Joe, have you been a hobby farm pilled?
Speaker 2: I'm really excited about our live video episode from the
Speaker 2: chick Swap. So yes, one hundred percent. And in the meantime,
Speaker 2: I am putting in an order for a hat. I'll
Speaker 2: put you back. You don't have to buy it for me,
Speaker 2: but next time, please pick me up a tractor supply hat.
Speaker 1: Are I already told you I am grateful for any
Speaker 1: excuse to go to my local tractor supply. Well, the
Speaker 1: other thing is I wonder if we could expense chicken
Speaker 1: purse purchases of Bloomberg in the name of all thoughts.
Speaker 2: Yes, we definitely can. Yes, excellent.
Speaker 1: Well, no, that was really interesting. I think Also the
Speaker 1: sort of Judo strategy analogy of sort of like zigging
Speaker 1: where other companies are zagging, makes a lot of sense.
Speaker 1: And trying to compete, you know, essentially competing in the
Speaker 1: same space but in a slightly different way.
Speaker 2: Can I say I would not mind if we did
Speaker 2: a lot more of these sort of like business strategy episodes, Yeah,
Speaker 2: which we have. We've done some company episodes Monster. Did
Speaker 2: we ever do a dominot We did a Dominoes? Yeah
Speaker 2: we did. But like, you know, thinking about these things like, oh,
Speaker 2: the essence of strategy is like what you don't do?
Speaker 2: Are these certain ideas are the judo strategy? Or why
Speaker 2: is it that retailers have a hard time moving from
Speaker 2: large format to small format? You know, Walmarts tried this,
Speaker 2: Amazons tried a bunch of like physical stores. I never
Speaker 2: know that they work. I could see us doing way
Speaker 2: more like this episode because it seems like a fruitful
Speaker 2: area to learn how these companies actually operate.
Speaker 1: Well totally, and also just getting an opportunity to ask
Speaker 1: more questions about pricing as well, because I'm still really
Speaker 1: interested in how individual corporate pricing decisions are feeding into
Speaker 1: the bigger macro picture.
Speaker 2: I'm also just a certain like how do you get
Speaker 2: that like right mix because it's not like totally intuitive
Speaker 2: to me. That's like, okay, vegetables and guns, safes and
Speaker 2: kayaks and a certain size feed but like obviously that's
Speaker 2: what the company's like, special Sauces is getting that, and
Speaker 2: then how do you also, like I imagine every company,
Speaker 2: like I said, would love to have employees who would
Speaker 2: be that attentive to customers, but it's got to be
Speaker 2: like really hard to build.
Speaker 1: Well, I will tell you I plan to put in
Speaker 1: some blueberry bushes this fall, hopefully, and I plan on
Speaker 1: getting them from tractor Supply and getting some recommendations for
Speaker 1: which ones might work. Anyway, shall we leave it there?
Speaker 2: Let's leave it there.
Speaker 1: Okay, this has been another episode of the Audlots podcast.
Speaker 1: I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2: And I'm Joe Wisenthal. You can follow me at the Stalwart.
Speaker 2: Follow our guest Michael Roberto at Michael A. Roberto, follow
Speaker 2: our producers Carmen Rodriguez at Carmen Arman and dash Ol
Speaker 2: Bennett at Dashbot. And check out all of the Bloomberg
Speaker 2: podcasts under the handle at Podcasts, and for more Oddlots content,
Speaker 2: go to Bloomberg dot com slash odd Lots, where we
Speaker 2: have transcripts, a blog, and a newsletter, and check out
Speaker 2: our discord really fun place to hang out on the web.
Speaker 2: Listeners chatting twenty four to seven about all these topics.
Speaker 2: Go there, discord dot gg, slash odlogs.
Speaker 1: Oh we also share pictures of our respective tomato.
Speaker 2: There's an HGTV channel that Tracy's set up where she
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Speaker 1: Doing and if you like Audlots, please leave us a
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Speaker 1: for listening.