TMCnet - World's Largest Communications and Technology Community



Mooresville-based Lowe's goes for the pros [The Charlotte Observer :: ]
[March 07, 2014]

Mooresville-based Lowe's goes for the pros [The Charlotte Observer :: ]

(Charlotte Observer (NC) Via Acquire Media NewsEdge) March 07--Mooresville-based Lowe's Inc. is pushing to attract more professional contractors, builders and tradesmen, targeting their business with special discount programs, dedicated salespeople and sophisticated new data-mining.

The effort has ramped up over the past 18 months or so for several reasons. Although pros are a small percentage of Lowe's shoppers, they generate an outsize percentage of revenue -- 28 percent in Lowe's case. They reliably and frequently place big orders.

And with the housing market rebounding, there's a bigger chunk of new business up for grabs as home builders get back to work. The pro business is growing faster than the general home improvement market, Lowe's executives told analysts last week.

"We've completely redesigned our operational model regarding the pro this past year," chief operating officer Rick Damron said during a recent conference call.

Chief customer officer Greg Bridgeford echoed him. "We've got a very, very heavy focus on it right now." Lowe's still lags Atlanta-based Home Depot, its biggest competitor. Home Depot started aggressively targeting pros with discount programs and new services designed to help them shop quickly in 2011. Sales to pros account for about 35 percent of Home Depot's revenue.

"This is something that's been on our radar for quite some time," said J.T. Rieves, vice president of pro business for Home Depot.

But Mike Horn, Lowe's vice president of pro services, said that while Home Depot is Lowe's chief rival, it's also the easiest to keep tabs on and compete with. The real challenge for Lowe's, Horn said, is to compete with lumberyards, specialty stores selling only plumbing or electrical equipment and mom-and-pop retailers who can devote more attention to each customer than a big-box store, even if they don't always have the lowest price.

Balance between DIY and Pros Lowe's is the nation's second-biggest home improvement retailer, operating more than 1,830 stores with annual revenue of $53 billion. When Lowe's began expanding as a regional chain of stores six decades ago, sales to pros accounted for about 60 percent of sales.

That fell through the years, as the company closed its lumberyards and changed to be more of a consumer-friendly retailer aimed at do-it-yourself shoppers.

Here are some of the steps Lowe's is taking to lure professional customers: --The company has packaged more goods in "contractor packs," offering a lower per-unit price for bulk quantities of items pros tend to buy packs of. For example, Liquid Nails cost $1.77 for an individual tube, or $1.59 if you buy a case of 24.

--Lowe's has added more items contractors need and packaged them in ways that make them easier for pros to buy quickly. The company now sells wire by the roll and offers more than the previous three colors of wire, because contractors usually need multiple colors to wire all the systems in a house or building. And a wider selection of professional-grade electrical tools is grouped together in a single display. "So it feels more like an electric supply house," Horn said.

--The company is partnering with GE, its credit card provider, to mine purchasing data and find customers who account for more of its pro sales. That helps the dedicated pro services worker in each store target customers to boost sales. "They can find customers that typically buy a lot of drywall and reach out to that customer" when there's a sale, Horn said.

--Lowe's plans to roll out an improved e-commerce platform on its Lowe's for Pros website. Currently, the store has call-ahead and fax ordering options for pros. Lowe's will unveil an upgraded pro ordering system later this year, Horn said.

The system should allow pros to order supplies, track their orders and integrate everything with their own purchasing systems. There are challenges, however. For example, Lowe's lets authorized buyers for big companies purchase goods for their employers without a card. But because the company's e-commerce platform requires a 3-digit verification number from the back of a credit card, Lowe's has to figure out how to give authorized buyers access on the Web. "They can't even buy online," Horn said.

--Some of the changes are simple and seem minor; for example, Lowe's stores now have a dedicated phone line to the pro counter, instead of requiring contractors to call the main line and ask to be transferred. That saves busy contractors time.

The store must balance pro customers' needs with the broader base of homeowners and other do-it-yourself customers who make up the bulk of its business.

"We have to separate out the pro customer," Horn said. At the same time, the stores have to maintain a wide appeal. "We try to stay centered around that logic." ___ (c)2014 The Charlotte Observer (Charlotte, N.C.) Visit The Charlotte Observer (Charlotte, N.C.) at Distributed by MCT Information Services

[ Back To's Homepage ]

Technology Marketing Corporation

35 Nutmeg Drive Suite 340, Trumbull, Connecticut 06611 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments:
Comments about this site:


© 2018 Technology Marketing Corporation. All rights reserved | Privacy Policy