Lowe’s ‘Total Home’ Strategy Turns House Into Home And Is Key For Market Share Growth (2024)

Back in 2018, not long after Marvin Ellison took the reins as CEO of Lowe’s, he outlined a three-year strategic plan with the first 12 to 18months devoted to strengthening retail fundamentals – merchandising, supply chain, operations and customer engagement.

The next 18 to 36 months would be used to build up the fundamentals for sustainable growth. “As the old saying goes, you can’t put the icing before the cake,” he said at the time.

Upon completing this 36-month overhaul, the company would be ready to “ice the cake:” taking market share from its primary competitor and many smaller regional ones.

Ellison’s vision lit a fire among his associates and unleashed their hidden potential. As a result, now only 18 months into the company’s transformation, it’s time to make good on his commitment back in 2018 to take market share.

Tightening the screws

At its recent Investor Update, he introduced the company’s “Total Home” strategy, recognizing Lowe’s has an even greater post-pandemic opportunity to become a “total home solution” for its core DIY customers and its growing ranks of professional customers.

He promised each Lowe’s store and its newly launched, cloud-based lowes.com and Lowe’s for Pros platform, would provide “everything needed to repair and improve the home, across all decor categories.” All would be backed up by a strong service component, including quick home delivery and installation services.

For the “Total Home” strategy to work at taking market share, Lowe’s must become the first, not the second place people look for their home needs.

For that, it got a big assist from recently-appointed executive vice president of marketing and branding Marisa Thalberg. Her trend-setting work throughout 2020 was recognized by Ad Age, naming it No. 3 in its “Marketers of the Year” list and the only retail brand to be honored.

Among the campaigns that got Lowe’s noticed was an early one recognizing its frontline workers going above and beyond to provide “essentials” during the pandemic, a Halloween program offering curbside trick-or-treat for families concerned about going door-to-door and an out-of-the-box New York Fashion Week collaboration to put Lowe’s on the map as a fashionable home decor destination.

Moving forward, Lowe’s is thinking way beyond the “house” and the physical elements that go into building, maintaining and decorating it to “home” as a place for living, growing, sharing and loving.

The pandemic changed the dynamic of how people related to their homes and thus opened new avenues for Lowe’s to engage with customers. “It was truly a ‘do-it-for-yourself’ year, as consumers used home improvement to reclaim feelings of normalcy and establish a sense of calm,” shares Bill Boltz, Lowe’s executive vice president of merchandising.

“We’re committed to helping our consumers foster lasting relationships with their homes not only functionally, but also emotionally,” he continues.

Home tailwinds for 2021

To understand how its consumers are living, and by extension what they will need for their houses, Lowe’s just embarked on a study among 2,000 adult consumers about the possibilities they envision for their homes this year.

Coming off of the incredible growth Lowe’s saw in all-things home last year, with sales expected to grow over 20% by fiscal-year end, it sees that as a “launchpad for a entirely new and permanent relationship between consumers and their living spaces.”

Among the survey findings conducted in December 2020:

  • 64% agreed, “Home means more to me than it did a year ago.”
  • 60% said, “I have bigger plans for my home than I did a year ago.”
  • 55% affirmed, “I’m more excited about the things I can do to make my home special than I was a year ago.”

Following the pandemic year that created tremendous opportunities in the home space, Boltz explains the trends that started in 2020 will continue, even pick up pace in 2021 as people gain new confidence in the DIY home projects they can tackle.

With just under 40% of consumers saying they used a new type of tool for the first time in 2020, as well as the same reporting they started a new hobby involving tools, wood, metal or home improvement, 59% said they will keep spending some (37%), most (14%) or all (8%) of the money that used to go toward other things pre-pandemic on home improvement.

On their agendas in 2021 will be remodeling or repurposing existing home spaces, like turning bedrooms into offices and kitchen tables into classrooms. And even more consumers look forward to making over their bathrooms and kitchens in 2021 than in 2020, which was 24% and 21% respectively.

Such major home improvements make sense now given the strength of the housing market. “The aging housing stock and limitations in new housing bodes well for the repair and remodel industry that we serve,” Boltz says, adding many homeowners will undertake the less-demanding parts of such projects and call in the pros for the rest.

This year people will continue to organize their spaces to simplify house cleaning and make it easier for them to do all the things they need to do at home. Last year 71% leaned into organization, but they are not done yet. Over half (51%) plan to reorganize their garages and storage areas and 64% plan to reorganize their closets in 2021.

“Before people may not have noticed these things as much, but now that they are home more, they are configuring their home to handle schooling, office and exercise activities. As a result, reorganization moves right to the top of the list,” he adds.

Outdoor living is another priority for home owners in 2021 that carries over from 2020.

“Consumers are looking to the outdoor room and spaces to enjoy more often and for more months of the year,” he says, giving rise to demand for fire pits and heating equipment. Some 45% plan to create or improve their outdoor living spaces this year with 65% saying they will plant something new in the garden or in pots on the patio.

In all these home plans, Boltz is keen on attracting more women to Lowe’s this year. “The female shopper is a very important demographic for us. Women influence over 70% of the purchases that happen in home improvement. We want to make sure we take good care of her, in addition to our Pro and our DIY customers,” he adds.

Progress report

While we await Lowe’s 2020 fiscal wrap up at the end of the month, secondary data suggests it’s made progress gaining market share, which Ellison reports stands at 10% out of the estimated ~$900 billion highly-fragmented home improvement market.

On the foot traffic front, Placer.ai reports that year-over-year Lowe’s gained more ground than Home Depot, rising 21% overall all in 2020 as compared with Home Depot’s 12% growth. However, Home Depot still maintains a 20% traffic lead over Lowe’s, though the gap narrowed from 29% in 2019.

Placer.ai also reported that Lowe’s customer engagements improved more than Home Depot’s, with their visit engagements up nearly 20% year-over-year versus only 10% for Home Depot. Home Depot did not respond to a request for comment.

Online Lowe’s has more work to do. While total lowes.com traffic was up 49% to 1.5 billion visits in 2020, homedepot.com surged ahead with visits up 55%. As a result, Home Depot widened its lead to 2.6 billion visits, according to SimilarWeb.

However, lowes.com saw its visitors staying on the page longer, clicking around to more pages during their visit and less likely to bounce off the site as well. “Lowes.com managed to increase engagements across the board,” SimilarWeb’s lead retail consultant Jamie Drayton shares. “This aligns with the surge in conversions seen as the retailer gains in site efficiency.”

While the company doesn’t report online sales, it shared that online grew by triple-digits, as the corporation posted 30.1% comparable sales growth during the third quarter 2020.

Online e-commerce will be an ongoing priority for Ellison and his team as it continues to improve capabilities, like using AI to answer customer questions, adding online measurement tools to enable virtual in-home measurements and introducing video chat technology to allow its Pros to conduct virtual home visits.

“As we look to lean into Lowe’s ‘Total Home’ strategy, continued expansion of an online platform will be critical in our goal to accelerate market share,” Ellison said in the most recent Investor Update. The objective is to “bring leading edge technology within our reach, so we can continue to innovate and modernize our approach to serve the ‘total home’ for our customers.”

Lowe’s ‘Total Home’ Strategy Turns House Into Home And Is Key For Market Share Growth (2024)

FAQs

What is total home strategy with Lowes? ›

In the last five years since becoming CEO, Ellison had championed a turnaround of the company, completing a comprehensive foundational reset before embarking on a forward-looking growth plan called the “Total Home Strategy.” This strategic plan identified five critical areas for driving growth: elevating product ...

What is Lowes' competitive strategy? ›

The Lowe's strategy is rooted in serving our customers. We're guided by our mission: Together, deliver the right home improvement products, with the best service and value, across every channel and community we serve.

What is the Lowe's slogan? ›

In 2011, the company adopted the slogan "Never Stop Improving"; this would be replaced with "Do it right for less. Start at Lowe's" in 2019, which was later replaced by "Home to Any Possibility" in 2021, and then "Lowe's knows home improvement." in 2023.

What is Lowe's plan for the future? ›

Consistent with its longstanding commitment to protect the climate, Lowe's has announced that it will set a Science Based Net-Zero target in 2022. The new target will include near and long-term greenhouse gas (GHG) emissions reduction goals for Lowe's full value chain, including Scopes 1, 2 and 3.

What are Lowes' weaknesses? ›

Weaknesses. Operational Efficiency Challenges: Despite its financial success, Lowe's must continuously address operational efficiency within its vast network of stores. The company faces the ongoing task of optimizing inventory management and supply chain processes to meet customer demand promptly.

Why does Home Depot outperform Lowes? ›

The Winner: Home Depot

While Home Depot stock is ever-so-slightly more expensive than Lowe's stock on a price-to-earnings basis, its stronger financial position and higher dividend yield make it the better choice to invest in right now.

Who is Lowe's biggest competitor? ›

As the world's first and second-largest home improvement retailers, Home Depot and Lowe's share many similarities. They compete for a shared customer base across the U.S. and Canada.

What makes Lowes successful? ›

Relentless Focus On The Customer

We believe genuine relationships with our customers are the key to their success and ours. Whether you're a do-it-yourself customer or a professional contractor, we listen closely to your needs and deliver solutions that meet – and exceed – your expectations.

What are Lowe's big 3 retail fundamentals? ›

He doesn't like the word “overhaul” but prefers “transformation,” and the goal of Lowe's current transformation is a return to “retail fundamentals.” According to Ellison, these are: Be in stock. Have an efficient supply chain. Make productive use of your space.

What is Lowes most known for? ›

Lowe's grew from one small-town hardware store in North Carolina to one of the largest home improvement retailers in the world.

Why did Lowes change their slogan? ›

The tagline "Do it right for less. Start with Lowe's" will roll out in early February, Business Insider reports. The new slogan is part of an attempt to evolve the brand's marketing campaign and bring more "personalized, targeted messaging to customers.

What are Lowe's catch phrases? ›

Get the job done for less. Lowe's knows savings. Lowe's knows Pros.

What are the predictions for Lowes? ›

Based on 22 Wall Street analysts offering 12 month price targets for Lowe's in the last 3 months. The average price target is $254.37 with a high forecast of $290.00 and a low forecast of $229.00.

What is Lowe's home improvement market share? ›

LOW's vs. Market share relative to its competitors, as of Q1 2024
COMPANY NAMEMARKET SHARE 12 Months Ending Q1 2024MARKET SHARE MRQ Q1 2024
Lowe s Companies inc34.91%35.79 %
Fastenal Co3.03%3.21%
Home Depot inc62.06%61.00%
SUBTOTAL100%100%
Aug 3, 2024

What are Lowes' core values? ›

Our Values

We build strong relationships with our customers, deliver tailored solutions that meet their needs, and are always thinking of ways to add more value.

What is Lowes Z score? ›

Lowe's has a Altman Z-Score of 3.52, indicating it is in Safe Zones. This implies the Altman Z-Score is strong. The zones of discrimination were as such: When Altman Z-Score <= 1.8, it is in Distress Zones.

What is RTM Lowes? ›

• Completes Return to Manufacturer (RTM) program which includes all paperwork, vendor contact, and credit. • Processes and dispositions damaged, discontinued, defective, special order, cancelled product.

What is Lowes payout ratio? ›

Lowe's Companies, Inc.'s ( LOW ) dividend yield is 1.99%, which means that for every $100 invested in the company's stock, investors would receive $1.99 in dividends per year. Lowe's Companies, Inc.'s payout ratio is 35.05% which means that 35.05% of the company's earnings are paid out as dividends.

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