In agriculture, the struggle for dominance over the customer experience across the upstream value chain has waxed and waned for decades. Manufacturers, always hungry for more direct interaction with farmer customers, have often dipped their toes into programs designed to gain greater influence and access, with mixed results.
In the 1980s, crop protection manufacturer American Cyanamid even took the ultimate leap, creating its own dealer network of “Agri-Centers” to get its products out directly to farmer-customers. The effort was ultimately shuttered, but put retailers on notice that their place in the distribution network depended entirely on their creation of value for farmer-customers.
“Do I fear suppliers going direct?” said Jeff Tarsi, Senior Vice President of North American Operations at Nutrien, repeating back a question he’d been asked. “I’ve been in this industry since 1985, and we have been asking that question since 1985. I’m no more fearful today than I was back then. Nobody can handle all the complexities, the products, the risk, the financing, more effectively than a retailer.”
Through a combination of smart product procurement and scaled storage, trusted agronomic advice, strong local relationships, and increasing scale through mergers and acquisition, retail has managed to keep input manufacturers and other disintermediators largely at bay. Even the more recent “threat,” the buying and selling of inputs via ecommerce (and the specter of “direct to grower” sales), has been hanging over the distribution channel for more than two decades.
While facilitating transactions is still a thing, today the disruption buzz term is “digital customer experience.” How can the myriad players in agriculture — input manufacturers, software solution providers, agronomic service companies, financial organizations, and dozens of other builders of farm-focused tools — facilitate service and sales via a digital connection?
Given its list of advantages as the front line of service and commerce to farmer-customers, ag retailers have the opportunity to stay in front of the digital customer experience by making what they provide an indispensable aspect of electronic interaction at the farmgate. But retailers must also negotiate the laundry list of apps, plugins, and digital offerings begin foisted upon growers and determine whether to partner with or push aside potentially complimentary programs and services.
“There are a lot of tools and technologies out there that I use in my farming operation,” notes Tom Ryan, who brings a lot of current family farm experience into his work as Vice President of Business Operations and Retail Alliances for WinField United. “The challenge is that they are completely disconnected. Whether it’s monitors and systems inside the cab, or the technology tools and farm management apps, the lack of connectivity and seamless experience for the grower is the part that is frustrating.”
Getting the House in Order
When Farmers Business Network (FBN) launched its foray into electronic commerce in 2014, it spurred a wave of development in internet purchasing systems. From white-label storefronts to auction sites to home-grown systems, a number of retailers moved to secure a place in digital input sales. For many, it was a defensive strategy against a potential loss of business.
In the end, farmer use of portals strictly for product purchase never really took off. And recently, worldwide procurement struggles in crop protection and fertilizer driven by the pandemic has reinforced the importance of relationships and partnerships retailers can deliver.
“We used to hear about companies like FBN driving retail out of business, but they do not come up in the conversations anymore,” says Tarsi. “Who would have dreamed we would have the supply constraints we have now? I carry a lot of crop protection on the books, but I have been awful thankful for it the last few years amid the difficulties we’ve been having with our supply network. We’re down to four to five strategic global suppliers now, and those relationships have to be strategic — in most cases we consider them business partners.”
Delivering input e-commerce capability has rapidly morphed into providing transparency for all the business processes undertaken by the retailer and farmer, a necessary but still very complex task. Retailers are taking different paths to this goal, from partnering with technology providers to working with their existing ERP systems to building their own customer experience tool.
WinField United is building out its Atlas portal to help its aligned retailers to provide that connection to key business information. “We did a ton of listening to growers and retailers, and the message was very clear,” says Ryan. “We need to get the basic blocking and tackling right, and display the things we do better than any other industry segment to the farmer. If it does not provide visibility and transparency, it creates a lot of pain points between the retailer and the grower. It starts with the transactional information, and then we can build up to some of the cool stuff.”
David Spears, Executive Vice President and Chief Marketing Officer at MKC (Mid Kansas Coop), agrees that digital engagement needs to deliver on the basics. They are also using platforms to deliver agronomic decision making tools.
“Growers want the ability to review their account history, to view work orders, review the agronomic plan, conduct electronic commerce, and execute on the plan,” says Spears. “There is a lot of noise in the market, but you need to stick to the basics — what do they want or need? Two fundamental principles drive this — ease of doing business, and a positive experience. It’s pretty simple.”
Nutrien completed its own buildout on the digital customer experience three years ago with a focus on account accessibility and electronic commerce. Tarsi says there’s a significant benefit to having touchpoints across multiple inputs and services, and a huge component of the investment in a high-value system is tying to financial system together behind it to deliver farmer-customers as complete a picture of their operation as possible.
There’s also the need to address the different desires of customer segments. An easy-to-use, streamlined digital offering is a tremendous benefit for engaging the 80% of customers that make up 20% of the business. At MKC, its largest cooperative members are assigned a Strategic Account Manager to work with, but all customers view digital experience is an attractive option.
Despite all the attention on digital experiences these days, retailers report that the personal relationship is still an indispensable component of the retailer-farmer relationship. “COVID illustrated that we can provide services and keep workers safe, and the doors open by moving to digital tools if we need to, but we’ve not seen a diminishment in the desire for personal relationships,” says Tarsi.