Lowe’s Targets Pro Growth and Digital Innovation Amid Tough Macro Environment

Similar to themes from The Home Depot’s fourth-quarter earnings reported this week, Lowe’s is investing strategically in its digital and in-store offerings to enhance value and convenience for Pro customers, driving growth amid a challenging macroeconomic landscape.

For Lowe’s officials, their priorities comprise elevating online and Pro customer experiences, leveraging the Pro and DIY loyalty programs, and delivering simplified omnichannel services. These efforts resulted in high single-digit growth in the Pro segment and a 9.5% increase in online sales during the fourth quarter, which included a 0.2% rise in comparable store sales — the first positive increase in two years.

Pro Customer Momentum and Loyalty Programs

“We’re very pleased with our performance in a very difficult home improvement macro environment,” Lowe’s Chairman, President and CEO Marvin R. Ellison said Wednesday (Feb. 26) during the company’s fourth-quarter earnings call. “We’re still seeing a cautious consumer, leading to continued near-term pressure on DIY spending, particularly on bigger ticket projects. We’re gaining momentum with our Pro customer and offer a best-in-class digital experience.”

Ellison noted the company recently updated its MVPs Pro Rewards & Partnership Program to become MyLowe’s Pro Rewards, a free program designed to save small- to mid-sized pros time and money. Members earn points on every purchase, which can be redeemed for MyLowe’s Money and exclusive rewards.

Lowe’s is also leveraging its DIY loyalty program, which now has 30 million members, with Ellison noting DIY program members outspend non-members by 50%.

Despite ongoing pressure from elevated mortgage rates and a challenging macro environment for home improvement, company officials remain confident in their long-term strategy. The company is maintaining flat comparable sales in early 2025, with a focus on expanding its Pro offerings and investing in online capabilities.

Driving Growth Through Perpetual Productivity Improvement

A key part of Lowe’s future growth strategy involves its Perpetual Productivity Improvement (PPI) initiatives, which initially focused on store operations but now extends to supply chain, merchandising, HR, IT and online operations. A key project is the front-end transformation of stores, which includes versatile point-of-sale units that can switch between self-checkout and cashier modes, optimizing space for merchandising and omnichannel fulfillment.

Targeting Millennials and Strengthening Digital Customer Experience

When it comes to omnichannel shopping, Lowe’s could opt to target millennials based on their past spending behavior.

According to a PYMNTS Intelligence report, “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” millennials are leading the way in home improvement retail, with one in four having purchased building materials, hardware or tools in the past 30 days. That is higher than the 19% of consumers overall who made similar purchases.

Additionally, to improve its digital customer experience, Lowe’s launched its Digital Home Platform, exclusively for MyLowe’s Rewards members, offering a personalized way for homeowners to manage their home maintenance. Initially focused on appliances, the platform provides access to product information, warranties, manuals, maintenance suggestions and replacement parts. It also offers product recommendations and how-to content for easy upkeep. The platform automatically adds appliances purchased in the past five years to members’ profiles.

Looking Ahead

“We are prepared to outperform the market in each macro scenario,” Ellison said. “Running both loyalty programs now on the same platform should drive greater engagement, and we’re offering more member-only deals and exclusive discounts. We can now leverage that data as our loyalty ecosystem evolves. We’re also confident in the flywheel we created with PPI.”

Looking ahead, Ellison noted, it’s difficult to predict when the home improvement market will normalize.

“It comes down to discretionary big-ticket items for DIY,” he said. “We’re going to be tracking that very closely. Another key is our home installation business. At some point, consumers are going to become normalized in this high mortgage rate environment. We see that DIY customer coming back.”