Dive Brief:
- Lowe’s executives laid out a tech-focused customer experience revamp for 2025, with plans to rollout generative AI-powered tools and a reimagined loyalty program for contractors, during the retailer’s 2024 analyst and investor day presentation Wednesday.
- The retailer will relaunch its MVP Pro Rewards loyalty program as MyLowe's Pro Rewards in early 2025, according to an investor day press release. The redesigned program aims to benefit small- to medium-sized contractors by making rewards faster to earn and easier to redeem.
- Lowe’s intends to combine the in-store and online experiences through the use of AI solutions, according to Chief Digital and Information Officer Seemantini Godbole. Future plans include expanding its guided selling tools and letting store associates search for and sell items from Lowe’s third-party marketplace, which launched Wednesday.
Dive Insight:
Lowe’s CX enhancements are aimed at creating an interconnected experience for pro and DIY shoppers through its loyalty program and technology investments.
Together, Lowe’s and Home Depot account for a quarter of the combined professional and DIY home improvement market, according to Lowe’s President and CEO Marvin Ellison. CX is one of the primary differentiators Lowe’s will lean on to grow its presence.
“We're confident that there is still a great deal of opportunity for us to grow market share with both pro and DIY customers by building loyalty with our current customers and winning new customers looking for a friction-free shopping experience within home improvement,” Ellison said during the call.
Since Ellison joined Lowe's in 2018, its customer service score increased 6% in Q3 2024 compared to Q3 2018, according to the investor day presentation. Sales rose 26% during the same period. The share of sales from professional contractors — the target of many CX upgrades — grew from 19% in 2019 to 30% in the latest quarter.
Loyalty will play an important role in maintaining that growth. Members of MyLowe’s Rewards program spend nearly 50% more than non-members with a “notable increase in repeat shopping rates,” according to SVP and Chief Marketing Officer Jen Wilson.
MyLowe's Pro Rewards aims to replicate this success by offering a simpler value proposition than the current MVP Pro Rewards system. Pro Rewards will use the same points system as the DIY loyalty program.
“One thing is clear, our offering is just too complex, which makes it hard for pros to fully understand their benefits and get the most out of them,” Wilson said.
The goal is to use technology to enhance the Lowe’s store experience. The company is piloting an associate-facing digital companion that can help workers answer customer questions faster and more efficiently, according to Joe McFarland, EVP of Stores.
“Keep in mind, working at Lowe's is different from working in a grocery store or another mass merchant,” McFarland said. “At Lowe's, associates need to know a lot more than how to direct customers to the right aisle to find products. They need to answer a wide range of complex home improvement questions, from plumbing to drywall installation to pest control.”
The app lets associates ask questions about customers’ home improvement projects and provides information on both the necessary steps and any products they might need, according to McFarland. Associates can thumbs up or thumbs down the AI-generated responses to help it refine answers over time.
The company is wary of trends that are slowing down home improvement spending, such as higher mortgage rates, according to EVP and CFO Brandon Sink. As a result, sales growth is uncertain. Comparable sales for fiscal 2025 could range from 4% growth in a strong home improvement market to a 2% decline in a weak market, according to the investor day presentation.
