Dive Brief:
- Continued momentum in professional contractor and online sales, driven by investments in customer experience, helped Lowe’s outperform expectations in its latest quarter, according to executives on a Q4 2024 earnings call Wednesday. Comparable sales grew a modest 0.2% year over year in the quarter despite lower DIY spending.
- The MyLowe’s Rewards program, which was introduced last year, reached 30 million members during the fourth quarter, and loyalty members outspend non-members by nearly 50%, according to Bill Boltz, EVP of merchandising. The DIY program served as a blueprint for the MyLowe’s Pro Rewards program, which relaunched last week.
- Lowe’s will launch an AI-powered home improvement adviser in March, according to President and CEO Marvin Ellison. The tool, made in collaboration with OpenAI, will offer customer project advice and direct links to specific products to enable seamless checkout.
Dive Insight:
Convenience and simplicity are two essential components of Lowe’s customer experience plans, as seen in the home improvement retailer’s redesigned loyalty programs.
MyLowe’s Rewards and MyLowe’s Pro Rewards now run on the same platform and use the same points system, according to Joe McFarland, EVP of stores at Lowe’s.
“This not only simplifies the customer experience, it’s already making it easier for associates to explain and support the program,” McFarland said. “This should drive greater engagement with our pro customers and incentivize repeat purchases and more trips to Lowe’s.”
Customer satisfaction scores are on the rise, including with the buy online, pick up in-store experience, according to McFarland. The improvements contributed to record sales on Black Friday and Cyber Monday, as about half of orders were picked up at the store.
“It tells us that the investments we’ve been making in our front end transformation are paying off,” McFarland said.
Same-store sales reached $18.6 billion during the quarter, according to an earnings release. Online and pro comparable sales rose in the single digits.
Lowe’s is setting its sights on contractors with small- to medium-sized businesses, according to Ellison. The company categorizes its pro customers based on their shopping patterns and annual spend, as well as through quarterly surveys.
The relaunched MyLowe’s Pro Rewards is simpler than its predecessor based on feedback from pro customers, according to Ellison. The program also makes it easier to earn bigger rewards at lower spend levels in response to their needs.
Lowe’s and The Home Depot are each pursuing contractors, but their approaches differ. While Lowe’s emphasizes smaller contractors, Home Depot’s CX investments are aimed at pros of all sizes, including those with larger companies.
“Our initiatives are resonating with pros, and not only are we gaining traction with a larger pro that works on complex projects, we're also seeing meaningful lift in sales with all pros across all purchase occasions,” Ann-Marie Campbell, senior executive vice president of U.S. stores and operations at The Home Depot, said on a Q4 2024 earnings call Tuesday.
