While both Home Depot and Lowe’s both announcing they missed on revenue projections for their fourth quarters, transcripts from their talks with reporters after the earnings were announced shows growth in at least one area: pro customers.
Both announced not only improving revenue from the pro customer, but also new commitments to improve the customer experience for contractors.
“We have now on-boarded over 100,000 Pro customers and the reception has been positive,” Home Depot Chairman, CEO, and President Craig Menear told reporters. “Our plan for continuous enhancements with new features and capabilities is working. For example, in response to customer feedback we are adding the ability for businesses to enhance account management and ordering capabilities with improved tools. Our intent is to roll out this new Pro online experience to over a million Pros in 2019.”
Lowe’s echoed the thoughts and strategy of Home Depot.
“The pro customer will be a key focus for us in 2019,” Bill Boltz, Executive Vice-President of Merchandising for Lowe’s said during his conference call. “This is why as (CEO) Marvin (Ellison) mentioned we took steps in the fourth quarter to improve our inventory position for the pro by investing in job lot quantities, an area that has historically been underfunded. We must ensure that we have inventory debts at the store level to meet the pro customer needs and enable the presentation impact on our top selling items.”
Home Depot added that its online experience for pro customers will continue to improve, with new website opportunities for pro customers. “In 2019, we will continue to rollout enhancements across our digital assets,” Ted Decker, Executive Vice-President of Marketing for Home Depot announced. “As you heard from Craig, we’re excited to be rolling out a new B2B online experience for our pro customers to provide a more tailored, personalized offering and for consumers we will continue to focus on improving the way we bring our service to life in the digital world.”
Home Depot will also be adding resources for the pro customer, including improved delivery to job sites. “Now Home Depot pro gives us near national coverage with next day delivery via 700 private fleet trucks,” Carol Tome, Chief Financial Officer and Executive Vice-President of Corporate Services told reporters. “We’ve opened three market delivery operations and we have openings planned and groundbreaking planned through the year on the various new platforms, market delivery operations, flatbed delivery centers, et cetera.”
Meanwhile, Lowe’s is announcing its internal survey of pro customers shows satisfaction is improving year over year. With those results, Lowe’s is announcing that it will be hiring new supervisors specifically designed to work with pro customers. “These customer facing department supervisor roles will focus on providing better departmental coverage and expertise, as well as coaching our associates in delivering excellent service,” Joe McFarland, Executive Vice-President of Stores announced. “These supervisors will be dedicated to the pro department. To improve the pro customer experience we’re also reallocating resources at dedicated loaders so that the pro customer can consistently rely on us to help them level the bulky product they need.”
Lowe’s will also focus on inventory, in an effort to have what the pro customer needs in-stock at all times. “So we believe we’re simply servicing an existing customer better and we’ll be coming in a second, if not its first option for customers, then it literally stops shopping us because we didn’t have adequate inventory level,” Ellison said. “We have high expectations for pro, but we have a lot of work to do. I mean, we’re by no means checking the box that we’ve kind of solved. [These are] very important customers issues but we think that we have a good plan forward and so we’re going to continue to execute on that.”
And, Lowe’s will stay aggressive in finding new customers with its outside sales team.
“We brought in a few tenured leaders for our pro-business and they have depth of experience servicing the pro, both inside the store as well as outside sales. So we’ve been focused on both and focused on attracting new customers. But also focused on serving the customers and getting a larger share of wallet. So we’re – again as Marvin said, we’re early stages in pro, but we feel very, very good about the focus we have,” McFarland said.
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