Lowe's unveils "Total Home" strategy
Plans to capture market share from rivals
At its virtual investor update, the home improvement retailer said it expects sales to grow by about 22% in fiscal 2020
23 Oct, 2021
After working for the last two years on its turnaround efforts, Lowe's CEO Marvin Ellison said the company will now focus on strategic moves to win more of the approximately USD900 billion US home improvement market.
In the year ahead, he said the company will have a "Total Home" strategy. It will expand its online only assortment from kitchen appliances to home decor. It will test ways to speed up and lower the cost of fulfilling online orders by freeing up more space in the back of its stores. And it will localise products on shelves in different markets, so it doesn't have snow blowers at stores in warm climates or riding lawnmowers in big cities. Mr Ellison said:
At Lowe's we will be committed to offering everything a homeowner needs to provide a 'total home solution' across every area in the home. This includes products and services for everything needed to repair and improve the home, for DIY and Pro customers alike, across all decor categories including paint, as well as simple and complex installations.
Our Total Home strategy will enhance customer engagement and grow market share by intensifying our focus on the Pro customer, expanding our online business, modernising installation services, improving localisation efforts and elevating our product assortment.
The investor presentations included the company's strategies to drive productivity and deliver a seamless, omnichannel experience.
Lowe's chief financial officer Dave Denton said its efforts in the months ahead will lift the company's sales per square foot. He said it expects to have USD423 per square foot by the end of this year and it will raise its goal to USD460 for the future.
2020 was a pivotal year for the company, and we are taking market share earlier than we expected, and we are making the right investments for future growth. We are committed to investing in the business, including expanding our supply chain network to enhance our omnichannel capabilities.
Mr Ellison also said the retailer has overhauled its website and added new signs to help customers navigate its stores as the company gets a boost from the popularity of home improvement projects during the coronavirus pandemic.
Our commitment to retail fundamentals has been essential to our 2020 financial success. Our supply chain, in-store and digital systems would have collapsed under the weight of the unprecedented customer demand created by the pandemic without this focus.
Mr Ellison highlighted improvements that the retailer has made across its brick-and-mortar and digital businesses since he took the helm two years ago. Among them are its recently launched loyalty program to gain more business from home professionals, such as electricians and contractors. And its digital fulfillment options such as curbside pickup and in-store lockers.
He said the company has come a long way from Black Friday 2018 when its website crashed. Now, he said, the retailer is handling a surge in e-commerce demand day after day because of the pandemic.
The company reiterated its outlook at the investor conference, saying it expects sales to grow by about 22% this year. Same-store sales are expected to increase by about 23% during the same period.