Why Lowe’s Is Pushing Hardware Digital

Most retailers had nothing good to say about the mild winter of 2016, except that maybe it was somewhat less terrible that the snowpocalypse that was the winter of 2015. Not exactly ringing praise – but then not exactly an incomprehensible reaction either.

While a foot or two of snow falling every few days in some parts of the country is bad news – insofar as no one willingly leaves their house to shop – a winter that never quite shows up in the places where it is supposed to isn’t a great outcome either.

Retailers, particularly in apparel, plan their season inventory well in advance of the season beginning. So if the season planned for never actually manages to make an appearance, the result is too many winter parkas and snow shovels in a winter of no snow and mild temperatures.

But not all retailers recoil from an early spring – or non-existent winter – in fact, as far at the team at Lowe’s is concerned, winter may as well never come again. Whether temperature puts people in a gardening and home improving state of mind – that is all that Lowe’s cares about, since the result they hope for is that people run in their direction to get the supplies they need to the job done.

“Normally the joke at Lowe’s is that Christmas just isn’t our time of year – because while there are things that drive people to our stores in December – and we work very hard to entice our customers with them, the reality is Spring is our holiday season most years,” a Lowes spokesman noted in an , before adding that the end of 2015 and the early part of 2016 had been very different.

“We saw big strength in outdoor project categories – that is stuff like lumber and building materials, lawn and garden, and we even saw an unusual spike in outdoor power equipment and millwork as customers took advantage of mild weather to complete exterior projects.”

And that strength has translated across the board – Lowe’s handily beat analyst expectations in both its Q4 2015 and Q1 2016 earnings – with some store sales growth consistently over 5 percent, revenue on the incline, and profit going up.

In short, while the rest of retail seems beset – Lowe’s is doing pretty well. And yet instead of celebrating, instead the team  questions they are still asking is how to do better.

“We’ve seen big expansion in our Lowe’s Pro business for contractors – that is now over 30 percent of our consumer base, and where we are looking to grow, especially as the construction segment is showing additional strength.”

That commitment to luring and maintaining a stronger future relationship is the further development of it eCommerce portal – LowesForPros – as well as offering an expanded array of financing options.

“Professionals and consumers have been working and living in an increasingly digital economy for all of retail. The mistake some have been making is to assume that digital commerce can’t disrupt their consumer relationship – when actually digital is changing all of it.”

“Which is why our first priority has been over the last five years to change ourselves with that market. And the proof of the importance of that is in the figures. Our online and eCommerce sales have gone up 40 percent since 2015 – that is important growth and what we are working on stronger channels to deliver.”

Those developments have included over the last few years a heavily upgraded app that is designed to function to turn one’s mobile device into “your pocket home improvement consultant.”

That pocket consultant guides customers – literally with a map – to the items they want in the physical store. The app also tracks previous purchases and projects – meaning it makes suggestions on replacement parts and/or complementary pieces of equipment when the consumer resurfaces in the store.

For customers who know what they want to do – but maybe have more ambition than they have actual knowledge of interior design, gardening or light carpentry – Lowe’s can even connect many of the objects in-store to in-app “how to videos.” The goal is that “customers don’t just buy the caulk, they might also leave the purchase with some reasonable understanding of how that caulk should be used in their bathtub.”

The point is to engage the consumers and make it easier for them to make the decision to purchase. Though they suspect most of those purchases will happen in an in-store context – at the end of the day, the where is less important that the what.

“We truly don’t care if [shoppers] end up buying online or buying in the store. In fact, we are not even sure if a decade from now that will even be all that important a distinction.”

What will be a distinction, according to Lowe’s, is serving customers how they want, when they want. And to that end, Lowe’s will soon be opening its first direct-to-consumer fulfillment center in Tennessee. According to company reports – the facility will be a 1 million-square-foot, “state-of-the-art” facility that will bring 600 new jobs to the area.

And while it is the first, Lowe’s is fairly certain it won’t be the last – if the growth in digital sales over the last 18 months is any indication. Because while much of retail is suffering through what the particularly dramatic like to call an apocalypse – the team at Lowe’s notes that they saw their apocalypse already – in 2008, when the housing market bottomed and no one was buying, building or fixing their homes.

These days, with that dark corner turned, Team Lowe’s is ready to take whatever challenges come next. As long as people keep building – they say that they’ll find a way to reach them.



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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