When its website went down for a few hours on Black Friday 2018, it was an online disappointment for home improvement titan Lowe’s. It was also a sign that improvements were forthcoming. CEO Marvin Ellison had taken the reins months earlier, and was refreshingly outspoken on how blah he thinks his own e-commerce experience is. In at least two earnings calls with analysts since second-half 2019, Ellison has spoken candidly about having “underestimated the level of complexity” of creating an engaging e-commerce experience that converts at the levels of competitors like Home Depot.
Now, he’s changing all that.
The Remaking of a CX
The last two years has been a period of digital introspection for the retailer, whose online sales have grown at an anemic 3 percent annually, compared to the double-digit increases reported by other e-commerce sites in the home improvement space.
During a quarterly earnings call last November, Ellison said, “I would argue that there’s not a brick-and-mortar retailer in the U.S. that is our size that has such limited growth in the dotcom business. Most U.S. retailers that announce their comp growth for the quarter typically will have a dotcom number that starts with 20 percent growth, which is typical in this day and age. We’re not there yet, but we know how to get there.”
Ellison had previously singled out supply chain as a related area of underinvestment, but his focus now is on creating a better eCommerce CX – and making it pay. Since leaving his role as JCPenney’s CEO to join Lowe’s in 2018, Ellison has had his eye fixed on eCommerce potential.
“We have [website] traffic, but because functionality isn’t great, you may not get the whole way to checkout,” Ellison recently told CNBC. In the latest earnings call, he said, “If you have limitations online, not only does it hurt your dotcom sales, it actually hurts your brick-and-mortar sales, because it limits the amount of traffic where people will show up after having quality efficient research and decide to buy.”
In his most recent earnings call and in subsequent interviews with the financial press, Ellison hinted at what the revamped website will do and, critically, what it will add to revenues. Lowe’s reported $72.1 billion in sales for the fiscal year 2019, and the company says its new website will deliver “high single-digit growth” by the end of 2020, with new features appearing soon.
As part of its web makeover, Lowe’s is reportedly migrating from an aging legacy server to Google Cloud. Ellison mentioned having “…a detailed roadmap…” in place for the retailer’s eCommerce transformation, although few details were provided about the chain’s revised omnichannel strategy. Ellison did note that many sales start with online research and finish in stores, and that tech upgrades will capitalize more on that aspect of the buyer’s journey.