During its conference call to discuss third quarter earnings results, which Lowe’s executives admit included “poor execution”, Lowe’s decided to pull back the curtain a bit to let journalists see more about what is happening behind the scenes at the DIY giant.
While Lowe’s discussed the closings of 20 underperforming stores in the United States, issues with old stock being sold next to new stock, and supply disruptions and problems with out-of-stock items, executives also laid out their strategy to keep current Pro customers and engage in new Pro business.
Announcing that Lowe’s had a “solid performance” in pro product categories for its electrical sales, Executive Vice-President of Merchandising William Boltz, who was in his 99th day on the job for Lowe’s, laid out “five key priorities” aimed at improving the experience for Pro customers. They include:
- Recruiting talented, experienced leaders to enable faster decision-making and to ensure that we’re optimizing our assortments across all channels
- Implementing a localized assortment strategy with the development, rollout and support of a field-based merchandising team.
- Redesigning our internal reset process, with the implementation and rollout of our new merchandising service team, or what we refer to as MST.
- Changing our end cap and off-shelf strategy to showcase great values and innovation that drive traffic and that, ultimately, improves overall sales productivity
- Continue to strengthen our merchandising presentations by adding key brands to our assortments and by investing in both job lot and presentation quantities within our best-selling SKUs.
“All of this is designed to drastically improve the experience for our pro customers,” Boltz told reporters. “All five of these initiatives were launched at the end of the third quarter and we’ll be laser focused on the rollout plans and execution as we move into 2019.”
One of the reasons fewer Pro customers use Lowe’s is the product selection is not varied. “I’ll just say, for the record, the brands that we don’t have that we desire to have, we’re actively working to try to get them in our assortment,” Marvin Ellison, President and CEO announced to reporters. “But we will just take the practice of only talking about the brands we have because those are the companies we want to highlight.”
Later in the conference call, Ellison went into a deeper detail of how Lowe’s will work to attract and retain Pro customers. And that includes dropping prices.
“The pro customer is a very important customer,” Ellison said. “But they’re a very, very simple customer. And this customer is looking for a couple of fundamental things. First, they’re looking for a great price. They’re looking for service that saves them time because time is money. And they’re looking for the brands that they identify with. That’s really it. They’re pretty much agnostic on anything else. And so, Lowe’s has proven that you can have a dominant market share in pro and lose it because, at one point, Lowe’s had dominant market share in pro and they didn’t maintain it because primarily, of those three things I outlined were no longer competitive advantages. And for us, we’re going to make sure that we are competitively priced. That’s something that Bill and his team are taking the lead on. We’re going to make sure that we have great service because again time is money. And service for the pro is not giving them product knowledge. It’s about having job lot quantity. It’s about giving the ability to buy and stage product. It’s the ability to speak their language and to engage them at the pro desk or engage them online. And now, the third level is to go out and get the brands. And as Bill and I both mentioned, we’re actively engaged in trying to fill our assortments with brands that we currently don’t have. When you do those things, the pro is totally agnostic to the channel in which they shop because it’s all about those three things for them.”Tagged with Biggest News, Lowe's