Lowe’s, Home Depot Expand Efforts For Pro Customers

Lowe’s, Home Depot Expand Efforts For Pro Customers

During the conference calls to discuss 4th quarter earnings results for Lowe’s and Home Depot, the President and CEO of each company took time to detail how the traditional DIY chains are making progress with Pro customers.

Both Marvin Ellison of Lowe’s and Craig Menear of Home Depot announced not only increased sales in their Pro divisions, but also some added features in an effort to keep Pro customers coming back while attracting new customers at the same time.

“We’ve also expanded our digital capabilities by investing in B2B website experience tailored specifically for the needs of our Pro customers,” Menear told reporters during the conference call. “We have now onboarded over 1 million Pro customers. Additionally, during the 4th quarter, we completed the integration of our third party best-in-class CRM system for all of our Pro sales and services teams. This enhances our visibility, enabling us to better serve our customers. I’m excited about the opportunities ahead as we continue to build capabilities to engage with a Pro, no matter when, where or how they want to interact.”

Lowe’s Executive Vice-President of Stores Joe McFarland echoed the strategy of Home Depot by saying the data it gets from Pro customers will help Lowe’s in other areas. “In the first half of 2020 we will launch our Pro loyalty program nationally, integrated with a CRM program which will allow us to deploy more surgical, strategic marketing to the Pro and expand our share of wallet through suggestive selling and improved account management,” McFarland said. “We are confident that our partnership with Salesforce.com will allow us to build a best-in-class platform to better serve our Pros.” Lowe’s CEO Ellison believes the CRM effort will create additional loyalty from Pro customers.

“Now Joe outlined in his prepared comments some key things we’re doing, relative for loyalty and CRM. Do we have an expectation that we’re going to see our whole penetration pick up in 2020? Absolutely! We haven’t set a target, but we do have expectations on what we’re going to be able to generator from new customers, average ticket, growth, frequency of business, because we’re going to know this customer intimately based on having real data and not based on intuition,” Ellison said. “We have intentionally not set a penetration target, because we believe setting an artificial targets could lead us to be focused on something other than what’s in the best interest of the customer. What we’re trying to do is be a very customer centric organization in how we think.”

Home Depot said it’s B2B experience for Pro customers is just one aspect of the experience it sees for that market segment. In the near future, Menear expects to see a lot more opportunities to connect.

“Yeah. I think when we think about the Pro customer, we’re actually building an ecosystem for our Pro customer that encompasses product and brands and delivery and credit services and our digital capabilities would B2B tool rental and a whole lot more,” Menear told reporters. “Obviously, all of that coming together allows us to be able to service our Pro customers in a more holistic way and it allows us to continue to grow with larger more complex customers.

“Look, we continue to drive engagement with the Pros that we’ve on-boarded to the B2B website. We like what we see as those Pros accelerate their engagement and as I mentioned before, we’re building a complete ecosystem around the Pro. The B2B website is one portion of that experience but encompasses all the things that I laid out before.”

Meanwhile, Lowe’s admits it is struggling with its website, saying it is going to be “under construction” because it currently resides in a decades-old platform. For the short term, Lowe’s is backing away from online promotions until the problems are resolved. “The good news is for Lowes.com we know exactly what our issues are, and we have temporarily slowed our dot-com growth to resolve those issues,” Ellison reported. “We recruited a very experienced and talented team and we have a detailed project roadmap to modernize our website. We expect to see a trajectory change in this business in the second half of 2020, which we are very excited about.”

Home Depot says it is currently seeing between 15-17% of its business coming from Pros, and it is making changes to increase that amount. Lowe’s says it is not focused on those numbers right now, choosing to focus on the Pro customers experience and worry about numbers later. “In 2019 our Pro strategy was primarily focused on improving the retail fundamentals, such a job lot quantities, improve service levels, dedicated loaders, pro department supervisors and consistent volume pricing,” Ellison said. “In Q4 we continue this progress with the addition of dedicated point-of-sale terminals and our pro desk to allow for more convenient fast service. Our commitment to retail basics drove strong pro comps and significant improvement in customer service scores in Q4. Although we are pleased with our pro performance in 2019, we are now transitioning from retail basics to more strategic initiatives for the Pro.”

Comment on the story

Your email address will not be published.