How Tractor Supply measures the success of its AI investments

Farming isn’t typically associated with speed—most tractors can only go about 25 miles per hour—but “speedy” may be the word that best describes Tractor Supply’s growth trajectory in recent years. The farming supplies and equipment outlet opened 90 new locations in 2025 and plans to open 100 more in 2026, as the purveyor of chicken coops, horse feed, and outdoor workwear capitalizes on what Placer.ai has called a significant “unmet demand” in rural markets across the country.

But the market opportunity is only part of the story. Tractor Supply has also invested heavily in AI-powered technology to drive growth. In January, CEO Harry Lawton said the company had extended the use of AI across its entire enterprise and expanded its partnership with OpenAI. He also hinted at how Tractor Supply gauges the success of its AI investments: “The capabilities are improving forecasting, inventory flow, and team member productivity.”

With 90% of retail and CPG companies planning to increase their AI budgets in 2026, according to a survey by Nvidia, how these companies plan to measure their ROI is one of the biggest questions facing the industry—and the example of early adopters such as Tractor Supply could prove instructive.

Sales and speed: So what does success look like for an AI-forward firm? Glenn Allison, VP of AI platforms at Tractor Supply, told Retail Brew that there are a number of key metrics for measuring when an AI-powered technology is working.

Sometimes this is as simple as taking a successful transaction and looking back at whether AI tools were used during the sales process. Tractor Supply is able to track when, for example, an employee used its generative AI application Hey GURA prior to making a sale, Allison said. The application, which is available to all in-store associates through handheld devices, can provide information about products, generate recommendations based on a customer’s needs, and locate products within the store.

There is a similar process for its Tractor Vision system, which uses computer vision to alert employees when help is needed around the store, whether that’s a long line forming at checkout or a customer looking for assistance with a purchase decision. If one of these alerts preceded a sale, that’s a positive indicator.

Speed of service is another metric for determining ROI. The speed at which propane tanks are refilled is one such success story, Allison said. In the past, customers had to come into the store to notify an employee when they needed assistance. Now they can signal through the app when they are ready for a refill, and an employee will respond, completing the entire transaction process on a handheld device.

“It’s all centered around the team member,” Allison said. “We’re using AI to save time and reinvest that time back into the customer experience.”

Better availability: These measures are mostly focused on the customer experience and sales processes, but inventory planning is also a target for AI-powered improvements. Through its partnership with Relex, a supply chain service provider, Tractor Supply is using AI to help maximize product availability.

A case in point: By tracking the sales velocity of SKUs, the company can tell when sales suddenly drop off for a given product. It then uses AI to generate an employee task to investigate what might be going on and correct the issue, whether it’s a merchandising or shelving problem, or a wrong price. This ultimately gets more inventory in the right place at the right time, which helps keep inventory levels in check.

For its part as a vendor of this type of technology, Relex tracks the revenue gains that come with better presentation and minimized out-of-stocks, Relex CEO Mikko Kärkkäinen told Retail Brew. He noted that lowering inventory levels has an “immediate cash flow impact” and then a longer-term impact on the P&L statement, including reduced capital costs and less need for costly warehouse space.

“That can be super meaningful in many cases,” he said.