Dial Ventures at Purdue University recently explored what is shaping the future of ag retail, which is highlighted by 5 key trends:
1. efficiency
2. relevance
3. omnichannel
4. sustainability
5. innovation beyond company boundaries
Efficiency Drives Consolidation
Dial Ventures executive director Allan Gray believes the force behind the significant consolidation going on within ag retail is the need for efficiency.
This rings true for the leaders of Keystone Cooperative – which was formed earlier this year by a Co-Alliance and Ceres Solution merger. Following the shareholder vote to merge, Keystone executive vice president Jeff Troike said the decision would ultimately allow the company to better serve its owners.
“Our members expect us to be able to deliver technology to help them be more productive, more efficient and more profitable. An organization of this size will allow us to continue to do what we’ve been doing in the future,” Troike says.
At the same time, Gray says a merger isn’t always the answer to enhanced company efficiency. He suggests partnering with another company on a product or service, utilizing precision ag technologies to reduce labor needs, or using data to track product performance and forecast demand to cut down on excess inventory.
Trusted Advisors Will Remain Relevant
Many farmers have probably experienced walking into a hardware store and realizing they know more than the employee that’s supposed to be helping them choose a product. Gray shares staying up to date on new products, services and tools will be vital to help ag retailers remain relevant and position themselves as the trusted advisor to their customers.
One way to build that trust is by keeping employees up to date and trained on new products and technology so they are able to help customers navigate the endless sea of options that are out there.
Gray also suggests figuring out what you can offer to set yourself apart from the competition – it could be anything from thorough after-sales support and advising to flexible pricing models or subscriptions.
Make the Most of Data
In Farm Journal’s 2023 study on online purchasing behaviors, many farmer respondents shared an important factor they consider during an online purchase is their adviser or consultant’s availability for questions. As sales become increasingly digital, retailers can use a combination of data and consulting to keep digital and physical sales from competing with each other.
Gray says a key component to this will be using data to offer customers a personalized experience. For example, a customer relationship management (CRM) system could help the retailer manage their customer’s data and use it to provide more relevant recommendations.
Another way to personalize the experience is by giving customers the ability to choose their preferences. Delivery of products was ranked as an important deciding factor for how the respondents in Farm Journal’s study purchase their products. Some farmers may want to purchase a product online but have the option of picking the product up in the store instead of having it delivered.
It all comes back to user experience, which is something ag retail platforms will need to make a priority moving forward. The company’s digital tools have to be easy to use in both mobile and web versions with product information and inventory kept up to date.
Sustainability Initiatives Aren’t Going Away
Regenerative ag programs are growing at a rapid pace, giving retailers the opportunity to help their farmer customers navigate this new territory. Gray advises using the customers’ data to figure out which programs and practices will work for them and then providing support in measuring, tracking, reporting and verifying those practices.
Regenerative Ag: How Ag Retailers Can Help Programs Find Scale
Another way to support customers in this area is by trialing products that will help them reach their sustainability goals. For example, soil sensors could promote less water usage while some precision ag equipment could lead to fewer herbicides sprayed.
Innovation Beyond Company Boundaries
Organizations can easily be consumed by their efforts to reach set metrics and goals, which can leave little time for additional innovation – especially when an ag retailer’s chaotic spring and fall schedule is thrown into the mix. Gray warns that when companies cannot disrupt the marketplace with new ideas, they risk being disrupted themselves as the marketplace evolves.
He suggests staying ahead of the curve by partnering with tech companies and universities to discover new technologies and ways of doing business. Another great way to find practical, innovative ideas is by simply asking your customers. They’ll be able to share what could be beneficial to their operation but isn’t currently on the market.
