I think the time is right for Lowe’s to step out of Home Depot’s shadow. Lowe’s is poised to overtake the old guard but only if they can distance themselves from Home Depot’s established despot style. Like most leaders, Home Depot is focused on protecting its position which limits its ability to be innovative. And like many leaders they believe their own #@!%. Wall Street’s enabling love affair with Depot only reinforces this. Leaders tend to overestimate how relevant they are in their market and underestimate the real threats they face.
This makes it the perfect time for Lowe’s to step up and leave Home Depot in the dust. Lowe’s had its modest start in 1946 in the town of North Wilkesboro, North Carolina. For years the company resisted moving to the “big box” business model favored by Home Depot, in lieu of fostering small town business. However, in order to compete in today’s economic climate they had to adopt the big box format. Today, Lowe’s has grown to 1,745 stores and is seeking to increase its market share. They are the second largest home improvement chain in America.
Here’s how Lowe’s can distance themselves from Home Depot:
1. Dramatically improved customer service – there should be enough knowledgeable, friendly staff that they have time to engage the customer. They should go beyond just showing you where a product is. They should take the time to be curious and ask you about your project.
“Have you done this before?”
“Here’s a website where they walk you through the project.”
“Are you sure you have everything you need?”
“Tell me about your house.”
“What’s the next project you’re planning?”
Look at store employees as assets and not expenses.
2. Going after women. Ok, maybe I should say be even more inviting to women. Lowe’s is already a better experience for women; they should take it to the next level.
Learn from other merchants with concepts like a store within a store. Areas of the store should be staffed with knowledgeable women, to help female customers. These shouldn’t just be in high-ticket spaces like kitchens but in other areas as well.
3. Don’t act your age. From my perspective both Lowe’s and Home Depot are ignoring younger customers. Lowe’s should be the store that is preferred by younger people. Once that preference is started it sticks.
Here’s how Lowe’s can go young.
Lowe’s should be the store for renters, first time home buyers and even college dorm rooms. Lowe’s already does a better job appealing to younger people online. They should finish that job by taking it in-store. Long term benefit to this strategy? Customer loyalty. As these younger customers get older and grow into bigger, better living spaces so does their established relationship with Lowes.
4. Get in the house. Rather than focusing installed sales on areas like windows, siding, roofing and kitchens, this should be a store wide initiative. Lowe’s should have a desk that says “We can do it for you. We’ll come to you” and not just a sign in an aisle. Make it obvious that you can make the customer’s life easier.
Once they are in the home they should identify what is the next potential project and have a follow-up system.
5. Grow DIY. Lowe’s should be promoting projects that are at the most basic level, one step up from changing a light bulb. They will then grow DIY be giving those beginners a sense of confidence and accomplishment. Make it easy for them to succeed with a small project and they’ll be back for more. Better yet teach more DIY.
6. Win with Pros. As installed sales grow, contractors can view big boxes as competitors who are out to undercut them. In addition to continually improving their Pro sales efforts, big boxes should become the contractor’s showroom. Contractors who shop at Lowe’s should have no fear of their customers shopping there. Win with pros by making them their allies.
7. Kiss your vendors. This is another area where both Lowe’s and Depot play the big box game by the same rules. They both bully vendors and treat them like dirt. It’s an adversarial situation where there is no trust on either side and both are looking for how to take advantage of the other.
Lowe’s and Home Depot use fear to get what they think is the best from their suppliers. I contend that if one of them changed their attitude the benefits would be a real competitive advantage. Home Depot has no reason to be nice to vendors. If Lowe’s wants to beat Home Depot at its game then they need to change make some moves. Lowe’s has nothing to lose and a lot to gain.
8. Change the Metrics. Right now Lowe’s and Home Depot use the same measures of success. Unfortunately they have now trained Wall Street to use those same measures. Yes there will always be measures like sales, traffic, average sale amount and others.
Lowe’s should have a new set of measurements such as customer satisfaction, number of first time and younger customers. All measures that may not show a huge sales increase in the initial financial results but are investments in the future. By setting this standard they position themselves as the leader. These investments that will pay off in time and will be difficult for Home Depot to catch up once they take effect.
I know what you’re thinking: That’s crazy. I just don’t understand. That there’s research that shows blah blah blah, etc.
But here’s the thing companies who work with me know that I always wonder why they settle for the status quo and don’t shoot for the moon. Why do let someone else define what THEIR success is?
If Lowe’s wants to beat Home Depot at their own game and win, then they better start defining their own success by coming up with their own rules.
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