Home improvement retail chain Lowe’s is feeling the downturn in consumer spending on home projects.
Within the meantime, the corporate is counting on B2B ecommerce sales from skilled contractors to assist weather the drought in falling revenue.
“The DIY consumer: This consumer stays very cautious, specifically when you consider larger discretionary purchases,” Lowe’s CEO Marvin Ellison told attendees this week at Oppenheimer’s twenty fourth Annual Consumer Growth and E-commerce Conference. “The segment and the sentiment for the DIY [do-it-yourself] consumer stays a bit weak, influenced by things like persistent inflation.”
Lowe’s ranks No. 11 within the Top 1000, Digital Commerce 360’s database of North America’s online retailers by web sales. The retailer is within the Hardware & Home Improvement category.
Lowe’s online sales
Lowe’s Cos. Inc. reported that online sales grew about 1% in the primary quarter of fiscal 2024 ended May 3. Meanwhile, Lowe’s total sales declined 4.0% to $21.4 billion, and comparable sales fell 4.1%.
That was a big improvement from Q4, when total sales declined 17% and comparable sales dropped 6.2%.
The retailer also said B2B and online sales growth partially offset declines from DIY customers, especially on larger projects.
“Our focus in that segment is the small to medium-sized pro customer, and this customer stays resilient,” Ellison told attendees, in line with a transcript from SeekingAlpha.com. “And our most up-to-date pro surveys, which we attempt to do every quarter, show that their backlog of labor and projects are very consistent with last 12 months, which is sweet news for us.”
Lowe’s says it’s taking several major steps to speed up total and online sales from contractors.
Two of its primary priorities:
- Personalizing a contractor’s user experience.
- Making product recommendations and repeat buying easier each online and in stores.
“We’re beginning to pair that [the retailer’s professional contractor experience] together with our CRM (customer relationship management) platforms inside our stores. We’re in a position to know who our pros are, what they’re shopping and, more importantly, what they are usually not shopping, and find a way to pair the digital capabilities that now we have with the localized in-store specialists which are serving our pro customers,” Ellison said.
Previously 12 months, Lowe’s has spent considerable effort researching how contractors do business online with the retailer.
It found two key points:
- Nearly one in three pros (32%) ranked retailer-specific mobile apps and built-in tools of their top three innovations with the best potential to enhance their job.
- 61% of pros expect retailers to assist them shop quickly so that they can get back to the job.
To make it easier for skilled contractors, Lowe’s has made recent additions to its mobile commerce suite of tools. That features updating its Lowes Pro app with features similar to:
- Online quoting, so pros can construct and update online order quotes inside minutes. Pros may complete purchases online on the quoted rate, with pricing guaranteed for seven days.
- A volume savings program, which allows certain levels of Pro Rewards members to save lots of on eligible orders of $1,500 or more.
- Buy It Again, which lets pros reorder often purchased items via the Buy It Again prompt. Products might be sorted by frequency, recency and price of purchase.
- Order tracking, which visualizes purchases and tracks deliveries from a centralized page for professional customers.
B2B sales make up about 25% of all Lowe’s sales, which dropped 11% to $86.78 billion in 2023 from $97.06 billion in 2022.
Going forward, generating more sales from its B2B customers will remain a top priority for Lowe’s, chief financial officer Brandon Sink told attendees.
“We proceed to be laser-focused on the small to medium pro, the $250 billion addressable market that’s on the market, highly fragmented, and people pros proceed to inform us that they’re underserved,” he said.
Submit a nomination
Nominate a game-changer for the Global B2B eCommerce Industry Awards from Digital Commerce 360 and the B2B Ecommerce Association.
Enroll
Enroll for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends within the growing B2B ecommerce industry. Contact Mark Brohan, senior vice chairman of B2B and Market Research, at [email protected]. Follow him on Twitter @markbrohan. Follow us on LinkedIn, Twitter, Facebook and YouTube.
