By Scott Costa, Publisher, tED magazine
In the past 12 months, the three major DIY chains, Home Depot, Lowe’s and Ace Hardware have launched programs aimed at attracting professional contractors to buy their products in addition to the Do It Yourself crowd. How are they doing, and what are the new goals? This is a good time to check in with the competition to see their latest plans and what you should know.
Home Depot has a pro offering that is sold as a way for contractors to be treated differently than it’s other customers. It’s professional contractor website, which appears to be branded as “Pro Xtra” (that means it still pretty poorly branded), clearly shows what it will offer contractors on the home page. That includes two hour online order to pick-up service, job site delivery, dedicated support from its account reps for special orders, tool and truck rental, and 60 days payment without interest.
One of Home Depot’s main selling points to professional contractors is its recent acquisition of Interline Brands, which is a leading national distributor of maintenance repair and operations (MRO) products. “We are moving forward ion a number of exciting sales-driving initiatives that have been identified,” Home Depot Chairman, CEO and President Craig Menear recently said. “We have a good sense of what we need to accomplish over the next 18 to 24 months in order to fully realize the value of the Interline acquisition and the total Pro opportunity.”
Home Depot has also invested in its e-commerce capabilities, and that investment has started to see a return. The company reports it will continue to expand the digital capabilities to reach customers, including website improvement and better mobile experiences for the customer to remove what the company and many e-commerce experts call “friction” between the company and the end user. In the last year, Home Depot has seen its online business grow by almost $1 billion, reaching $4.7 billion for the year, which is up 25% from the previous year. But overall, online sales at Home Depot is still low, with e-commerce only accounting for 5.3% of total sales. That’s up from 4.5% in 2014.
Lowe’s completed its lowesforpros.com website last summer, which allows the professional contractor the opportunity to set up a customized account. The website also announces that it has products in a variety of categories, including wire and cable, tools, fuses and breakers, connectors, conduit and conduit fittings, and dimmers and switches. It also says it will help contractors keep track of previous orders, and provide the resources necessary to contractors doing government work.
“It continues to resonate about the way the Pro continues to respond to our initiatives,” Ricky Damron, COO of Lowe’s said. “From a brand perspective as the merchants continue to work with the operations team to make sure that we have the relevant brands that the Pros are responding to.”
“Online, we have enhanced our customer experience and presentation , including improved product search, integrated and upgraded product videos, enhanced product presentation like 360-degree views, and simplified product groupings to make it easy for customers to make their selection,” Mike Jones, Chief Customer Officer added.
Lowe’s has also invested in additional employees for the professional contractor customers. They will be working as “field based merchandising managers” in charge of identifying local market opportunities and introducing products to contractors. Lowe’s reported having more than 160 outside sales representatives working on the professional contractor side of the business.
“The introduction of lowesforpros.com in the second half of the year, it’s just getting its legs under it,” Damron concluded. “As we continue to gain traction from that initiative, I think it sets us up well to continue to gain share from the MRO customer, as we continue to get traction with lowesforpros.”
Ace is taking an interesting approach to the professional customer, but along with that comes some very large goals.
First, as Ace Vice-President of Retail and Supply Brian Wiborg told Hardware and Building Suppy Dealer magazine, the company will use LED lighting as a way to break into the B2B market. The plan is to get professional contractors to buy LED lighting for its own warehouses and offices, to show the energy savings and lighting capabilities. From there, the contractors can use Ace to buy LED products from Ace on its future projects.
Ace told investors it is hoping to become a $16 billion company by 2020. Currently, it did $11.6 billion in sales in 2015, with $2 billion in B2B transactions. Along with the growth projections in 2020, Ace wants to grow its B2B sector to $4 billion a year. It plans to do that through it’s professional contractor website The Supply Place, which says it has more than 80,000 items, including national brands, plus easy ways to track previous orders and a way to order online and pick up products at the store later that day.
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