Lowes, Home Depot Report Huge Spike In Online Buying

Lowes, Home Depot Report Huge Spike In Online Buying

While Home Depot and Lowes had some differences in their first quarter earnings reports, they did have two categories in common. Both reported a strong increase on e-commerce sales and in sales to Pro customers.

For Home Depot, while sales were up but earnings were down, digital platforms created an opportunity for customers to still buy products without having to walk through the stores, even though they decided against having the purchase delivered. “Sales leveraging our digital platforms increased approximately 80% in the quarter, and more than 60% of the time, our customers opted to pick up their orders at a store. We were able to extend our in-store focus capabilities to curbside pickup in the U.S. in a matter of days offering customers an additional choice with respect to fulfillment,” Craig Menear, Home Depot CEO told reporters.

Home Depot is extremely pleased with the e-commerce success since it launched a new effort to provide more products online with higher quality data. That has resulted in more customers, and Home Depot is hoping they maintain the new customers through web purchasing. “What’s particularly encouraging is the number of new customers and the opportunity in the future,” Ted Decker, Executive Vice-President of Merchandising said during the earnings conference call. “We more than doubled our number of customers, and when we look at our customers from repeat customers, 6 to 12 months, less than 12 months, 12 to 24, reactivated over 24 months, brand new customers, every one of those segments was healthy and effectively doubled. Again, purchasing categories across the entire store, the engagement with e-mail and My Account signups tripled the normal run rate as we went through the quarter. Our app downloads nearly doubled from their normal quarterly and weekly run rate. So, just terrific engagement across the business in our devices, and we’re very encouraged with this new and reenergized online customer base to work with these folks and contact them, engage with them in the future.”

Meanwhile, Lowes reported a strong first quarter, and the company is pleased with its spike in e-commerce sales, especially because it is in the middle of a website rebuilding process. “As we moved through the quarter, there was a sharp uptick in sales on as customers began to shop more and more online,” Lowes CEO Marvin Ellison said. “Our investments in online infrastructure and progress to date with the Google Cloud migration greatly improved site stability and allowed us to effectively handle the increased traffic. For the quarter, sales were up 80% overall with even stronger growth rates for our pro customers. Online penetration increased to 8% of total sales. The good news is will only get better for the balance of the year, and as I mentioned, we’re triple-digit growth in April, we’re triple-digit growth month to date, and we can sustain that and we’re having improved functionally for the customer each and every week, and that’s something that we’re excited about for the future.”

While sales to Pro customers increased at both Home Depot and Lowes, the increases dropped below the level of increases for DIY customers. Both companies said their larger Pro customers were slowed down by job postponements and safety measures on job sites. “Sales with both our DIY and Pro customers grew during the quarter, with DIY sales growing faster than Pro sales,” Decker said. “We continue to have a high level engagement with the Pro. However, certain states and municipalities restricted in-home activity, which had a direct impact on some of our Pro customers. In addition, certain social distancing actions we took during the first quarter also served as a headwind to Pro activity.”

“High spend Pros were more impacted,” Bill Lennie, Home Depot Executive Vice-President of Outside Sales added. “That makes sense if you think about them being more concentrated in metro areas likely or they have some of those mandates impact their business, but also larger jobs and more crews more likely to be impacted from the inability to get permits or job inspections. I would give you one additional point of reference though, and I would draw that parallel to our services business. If you look at job cancellations, they are running at historic trends which really means that more customers have just pushed their jobs and haven’t canceled the work. So, as these mandates are lifted, we are seeing the Pros come back to work.”


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