Home Depot and Lowes are constantly making changes to their business strategies. Since the recession, home improvement projects and new home sales have increased. Building materials manufacturers who sell products to these stores also have to change their strategies as big boxes change and have a new focus on customers, products, and increased competition with online stores.
If you sell to these big boxes you need to stay aware of their changes before and as they are happening. One of the best ways to do this is to follow the quarterly reports that their CEO’s make to investors. I wrote this post as an example what was learned from what their CEO’s told investors. The differences between them and between each quarter may seem small, but they are more important to you than you may realize.
While both companies are competitive, each company has their own strategy for growth. For instance, Home Depot holds a competitive percentage of market share with professionals, and plans to expand their business further. They believe that the housing market will continue to grow. Home Depot’s plan to expand their Pro Division Department is an imperative part of branding and customer involvement.
However, online stores such as Amazon, and Porch.com are increasingly becoming popular for remodeling and home-improvement services. In fact, Lowes teamed up with Porch.com to offer more to their pro customers. Amazon recently launched their contractor listing services in March of 2015 and is available in multiple cities across the U.S.
The internet is disrupting the home remodeling and home-improvement industry. You no longer have to ask the painter who’s painting your neighbor’s home for an estimate, you can check for a reliable person online. In addition to Amazon, and Porch.com, the Seattle Times also noted that Angie’s List and Google are also joining the list of competitors. Contractors can list their pricing and services online, and have multiple people contact them. And homeowners can write reviews on contractors as well, leading more contractors to bring their A game when working with clients.
How are Home Depot and Lowes developing plans to keep growing?
Craig Menear, Home Depot Chairman, President and CEO, came up with steps for customer engagement in an article that takes a strategic approach into focusing on their three-legged stool. By this Menear came up with three steps for customer engagement:
- Driving excellent customer service
- Driving product authority in the home improvement space
- Focusing on productivity, and efficiency, and providing a memorable customer experience
Menear explained how driving product authority is embarking on an end-to-end thought process as it relates to driving product authority when thinking about customer experiences. This makes the market for manufacturers selling products to Home Depot look promising.
To further explain, Home Depot is taking on a new approach with product authority starting with an end-to-end thought process regarding customer experience. They are trying to improve their business by better understanding the customer. If you well to Home Depot, you should think what this means to your business and how you can help Depot succeed with this strategy.
Robert Niblock, Chairman, President and CEO of Lowes said in Q2 2015 results earnings call transcript that Lowes key priorities in 2015 are:
- To pursue further top line growth in continued development of omni-channel capabilities
- Differentiate themselves through better customer experiences
- Improve product and service offering for the pro customer.
Niblock went on to discuss how Lowes is focusing more on productivity and profitability. A couple of Lowes top-selling products were appliances and kitchens, which they expect to expand in these products. In addition, Lowes has revamped their website with improved product search, presentation, and enhanced videos.
These business strategies put manufacturers in a better place when it comes to selling products. Both stores are looking to increase their product lines, and, their focus is on the customer. The internet and social media outlets provide a gateway for manufacturers to promote their products, gain new customers, and create a buzz before even approaching stores.
Lowes is looking to provide a great shopping experience whether online, through mobile websites, or at their physical store. Lowes is focusing more on their pro customer and expanding their online services by offering the contractor listings with Porch.com and having employees from this company to work in stores.
If you’d like to improve your big box sales, contact us and we’ll show how.
If you’d like to read more of our advice about how to be more successful wit Lowes and Home Depot here is another of our most popular posts.