While both Home Depot and Lowe’s reported solid second quarter earnings result, they also took some time during their earnings call with reporters to talk about how they are doing with Pro customers. And both of the DIY chains are focusing on the future.
As tED magazine reported last week, Lowe’s beat estimates on both earnings and revenue estimates, partially because of a strong demand for spring goods, but also because of improved sales to contractor customers. During it’s conference call, Lowe’s reported a strong improvement in the number of additional Pro customers who opened new accounts. “Once again, this quarter, we invited the customers in to see our improved environment with another very successful pro appreciation event which allow us to grow our pro accounts,” Joseph McFarland III, Executive Vice-President of Stores, told reporters. “In fact, we opened over 35,000 new pro accounts in the quarter.”
McFarland added that he is “pleased” with the effort by Lowe’s to increase its number of Pro customers, even though the company is still in what he calls the early stages of its strategy to grow with that segment of its customers base. “As we look out in our pro roadmap, we have a lot of initiatives coming. When you think about having that foundation in place, we can now lean into better pro marketing, focus on things like customer acquisition, driving awareness and what’s different at Lowe’s, the future focus, key segments, national accounts, our outside sales team, a better job site delivery,” McFarland said. “We have a laundry list of improvements that we’ll continue to make for the Pro customer. And we’re very, very encouraged by what we’re seeing across the total store from a pro standpoint.”
Lowe’s President and Chief Executive Officer Marvin Ellison pointed out its strategy remains simple: keep providing value. “We’re pretty confident that our sales momentum over the last two quarters, our improvement in transactions and our improvement in sales per square foot in large part is driven by pro. So, the strategic rationale for pro is traffic, transaction, sales per square foot productivity and just unlocking more value in every location,” Ellison told reporters.
Home Depot also reported solid earnings, although it does have some concerns about tariffs and lumber prices. As a result, it did was updating its outlook for the next year. But the company is working to keep Pro customers engaged, because that strategy appears to be working.
“We continue to focus on our suite of Pro initiatives, because we know that the more we engage with them, the more they spend with us,” Ted Decker, Executive Vice-President of Merchandise told reporters during the earnings conference call. Deckers added that Home Depot is marketing online opportunities for Pro customers to make shopping easier. “As we invest to address the unique demands of an interconnected customer experience in stores, we also continue to invest in our website and local applications to further enhance the digital customer experience. Our focus on improving search capabilities, site functionality, category presentation and product content has yielded higher traffic, better conversion and continued sales growth,” Decker added.
While Home Depot did not provide specific details, it did say more Pro customers are using its website for purchases.
“And we are seeing Pros that have been migrated onto a website, react very positively from a sales standpoint,” Craig Menear, Chairman, President and CEO of Home Depot said. “We are on track for the 1 million Pros in 2019. As a matter of fact, at the tail end of this quarter, we added a significant number of Pros to the website.”