Online sales total more than $35 million in the first six months of 2017.

Rural products merchant Tractor Supply Co. reported net sales of $2.017 billion in Q2 2017, up 8.9% from $1.852 billion last year. While most of the business takes place at physical locations—the company operates more than 1,700 stores in the United States—e-commerce is up by double-digits and is on track to account for 1-2% of total revenue, a spokeswoman for the company says.

We are starting to see signs that the physical and digital sides of our business are working well together and support one another.
Gregory Sandfort, CEO
Tractor Supply Co.

For the first six months of 2017, 1% of total revenue comes to $35.8 million in online sales through TractorSupply.com and its pet supplies site Petsense.com. Tractor Supply sells to farmers, ranchers, small businesses and tradesmen as well as homeowners and other consumers. Its products range from welding equipment and power generators to workwear apparel. The company declines to break out business-to-business sales.

CEO Gregory Sandfort attributes much of Tractor Supply’s growth to increasing connections between bricks-and-mortar and online stores, he told investors this week, according to a transcript of its earnings call from Seeking Alpha. “We are starting to see signs that the physical and digital sides of our business are working well together and support one another,” he said. “As the connection between our stores and the online presence strengthens, we see evidence that these initiatives are improving our top-line results.”

In the second quarter, Tractor Supply finished rolling out its Buy Online Pick Up in Store program, which now accounts for 55% of all online orders. Moreover, the average order value online now outpaces the total company average, Sandfort said, without giving specific values. President and chief marketing officer Steve Barbarick in the same call attributed this to Tractor Supply increasing the mix of product categories offered online in the last year.

“You can’t underestimate the importance of having that store and that availability of the online component where the customer can research, engage with us as a brand and make the decision,” Sandfort said. “They make the decision if they want to shop the store, if they want to buy directly online, have it shipped to them—that’s an element that I don’t think we understood until we turned on Buy Online Pick Up in Store how powerful that was.”

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Unique online visits to the website were up 28% in the quarter, with most traffic from mobile devices. The company also saw a 60% increase in use of the store locator button on the website, the spokeswoman says.

Tractor Supply  continues to invest in other initiatives to connect online and store sales, including growing its nearly 4 million-member Neighborhood Loyalty program, arming store associates with mobile point-of-sales devices and deploying a tool called Stockyard that allows store associates to offer customers currently out-of-stock items from vendors’ inventories. The orders are placed online from the store and customers then select a location for drop-shipping.

For the second quarter ended July 1, Tractor Supply reported:

  • Revenue of $2.017 billion, up 8.9% from $1.852 billion in Q2 2016;
  • Gross profit of $704.7 million, up 8.5% from $649.2 million;
  • Net income of $160.6 million, up 2.7% from $156.4 million.

For the six months ended July 1, Tractor Supply reported:

  • Revenue of $3.58 billion, up 7.8% from $3.32 billion in Q2 2016;
  • Gross profit of $1.22 billion, up 7.0% from $1.14 billion;
  • Net income of $221.0 million, down 1.4% from $224.1 million.

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Amy Dusto is a Chicago-based freelance writer.