**USA**: Lowe’s Companies, Inc. is focusing on its Pro customer base to drive growth, having restructured its loyalty programme and reported positive sales figures. CEO Marvin R. Ellison expresses optimism for future performance amid economic challenges, highlighting strategic digital enhancements and shopper engagement initiatives.
Lowe’s Companies, Inc. has been strategically enhancing both its digital and in-store offerings to cater to its professional (Pro) customer base, seeking to drive growth amidst challenging economic conditions. During the company’s fourth-quarter earnings call held on February 26, 2024, Lowe’s Chairman and CEO Marvin R. Ellison expressed satisfaction with the company’s performance amid a tough macroeconomic backdrop. He noted, “We’re still seeing a cautious consumer, leading to continued near-term pressure on DIY spending, particularly on bigger ticket projects. We’re gaining momentum with our Pro customer and offer a best-in-class digital experience.”
In a significant shift aimed at boosting customer loyalty, Lowe’s has evolved its MVPs Pro Rewards & Partnership Program into the MyLowe’s Pro Rewards program. This free initiative is tailored for small to mid-sized professionals, allowing members to earn points on purchases redeemable for MyLowe’s Money and exclusive rewards. This strategic move complements Lowe’s DIY loyalty programme, which now boasts 30 million members. Ellison highlighted that these DIY program members typically outspend non-members by a substantial 50%.
The company reported notable figures for the fourth quarter, including a high single-digit growth in its Pro segment and an impressive 9.5% increase in online sales. Notably, Lowe’s also marked a 0.2% rise in comparable store sales, the first such increase in two years, indicating a shift in consumer spending patterns.
Despite the current environment, characterised by high mortgage rates and pressures on home improvement spending, Lowe’s remains optimistic about its long-term strategies. The company aims to maintain flat comparable sales in early 2025 while expanding its Pro offerings and investing in digital capabilities.
Central to Lowe’s forward-looking strategy is its Perpetual Productivity Improvement (PPI) initiative, which has broadened from focusing solely on store operations to encompass supply chain management, merchandising, human resources, IT, and online operations. A notable project under this initiative involves transforming the front end of stores, where new point-of-sale units will facilitate both self-checkout and cashier operations, thereby optimising space for marketing and fulfilling omnichannel needs.
In an effort to enhance its digital customer experience, Lowe’s has introduced a Digital Home Platform for MyLowe’s Rewards members. The platform allows homeowners to personalisedly manage their home maintenance, starting with appliances, and includes access to vital information such as product warranties, manuals, maintenance suggestions, and more. It also adds purchased appliances from the last five years to members’ profiles automatically, further enriching the customer experience.
Looking to the future, Ellison stated, “We are prepared to outperform the market in each macro scenario.” He emphasised that the integration of both loyalty programmes on a unified platform is expected to enhance customer engagement, providing more member-only offers and exclusive discounts. He expressed confidence in the advantages derived from loyalty data as the ecosystem evolves and noted the necessity to closely monitor the context of discretionary spending by DIY customers, particularly concerning big-ticket items.
Ellison acknowledged the uncertainties regarding the eventual normalisation of the home improvement market but remains hopeful about the return of DIY customers as economic conditions stabilize.
Source: Noah Wire Services
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