Home improvement retail chain Lowe’s is feeling the downturn in consumer spending on home projects.
In the meantime, the company is counting on B2B ecommerce sales from professional contractors to help weather the drought in falling revenue.
“The DIY consumer: This consumer remains very cautious, specifically when you think about larger discretionary purchases,” Lowe’s CEO Marvin Ellison told attendees this week at Oppenheimer’s 24th Annual Consumer Growth and E-commerce Conference. “The segment and the sentiment for the DIY [do-it-yourself] consumer remains a bit weak, influenced by things like persistent inflation.”
Lowe’s ranks No. 11 in the Top 1000, Digital Commerce 360’s database of North America’s online retailers by web sales. The retailer is in the Hardware & Home Improvement category.
Lowe’s online sales
Lowe’s Cos. Inc. reported that online sales grew about 1% in the first quarter of fiscal 2024 ended May 3. Meanwhile, Lowe’s total sales declined 4.0% to $21.4 billion, and comparable sales fell 4.1%.
That was a significant improvement from Q4, when total sales declined 17% and comparable sales dropped 6.2%.
The retailer also said B2B and online sales growth partially offset declines from DIY customers, especially on bigger projects.
“Our focus in that segment is the small to medium-sized pro customer, and this customer remains resilient,” Ellison told attendees, according to a transcript from SeekingAlpha.com. “And our most recent pro surveys, which we try to do every quarter, show that their backlog of work and projects are very consistent with last year, which is good news for us.”
Lowe’s says it’s taking several major steps to accelerate total and online sales from contractors.
Two of its main priorities:
- Personalizing a contractor’s user experience.
- Making product recommendations and repeat buying easier both online and in stores.
“We’re starting to pair that [the retailer’s professional contractor experience] along with our CRM (customer relationship management) platforms within our stores. We’re able to know who our pros are, what they’re shopping and, more importantly, what they are not shopping, and be able to pair the digital capabilities that we have with the localized in-store specialists that are serving our pro customers,” Ellison said.
In the past year, Lowe’s has spent considerable effort researching how contractors do business online with the retailer.
It found two key points:
- Nearly one in three pros (32%) ranked retailer-specific mobile apps and built-in tools in their top three innovations with the greatest potential to improve their job.
- 61% of pros expect retailers to help them shop quickly so they can get back to the job.
To make it easier for professional contractors, Lowe’s has made recent additions to its mobile commerce suite of tools. That includes updating its Lowes Pro app with features such as:
- Online quoting, so pros can build and update online order quotes within minutes. Pros can also complete purchases online at the quoted rate, with pricing guaranteed for seven days.
- A volume savings program, which allows certain levels of Pro Rewards members to save on eligible orders of $1,500 or more.
- Buy It Again, which lets pros reorder frequently purchased items via the Buy It Again prompt. Products can be sorted by frequency, recency and price of purchase.
- Order tracking, which visualizes purchases and tracks deliveries from a centralized page for pro customers.
B2B sales make up about 25% of all Lowe’s sales, which dropped 11% to $86.78 billion in 2023 from $97.06 billion in 2022.
Going forward, generating more sales from its B2B customers will remain a top priority for Lowe’s, chief financial officer Brandon Sink told attendees.
“We continue to be laser-focused on the small to medium pro, the $250 billion addressable market that’s out there, highly fragmented, and those pros continue to tell us that they’re underserved,” he said.
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The post Lowe’s counts on more digital B2B sales to counter weaker DIY demand appeared first on Digital Commerce 360.
