How Lowe's Tops Customer Engagement
The third quarter was a charm for Lowe’s Companies, Inc. Profits shot up due to hurricanes Irma and Harvey, and the home improvement retailer came in No. 9 on Forbes Magazine's inaugural “50 Most Engaged Companies” list.
"This distinction highlights our commitment to engage customers with a purpose, offer consistent experiences and put the customer at the center of everything we do," commented President and CEO Robert Niblock.
The company reported net earnings of $872 million for its third quarter 2017 quarter compared to $379 million in the same 2016 quarter. Sales related to hurricanes reached $200 million in the quarter, helping to push sales up 6.5% to $16.8 billion from $15.7 billion, while comparable sales increased 5.7%.
Niblock noted, "given that over half of homeowners believe their home values are increasing, intent to engage in discretionary home improvement projects remains strong."
The retailer said its flexible fulfillment options and enhanced digital marketing efforts combined to drive online comp growth of 33%.
"We will continue to advance our online platform, adding more functionality such as inventory and order status visibility to improve the customer experience," noted COO Rick Damron.
The retailer said it's leveraging its investments in lowes.com, providing enhanced functionality and display for touch screen devices to deliver an optimized mobile experience; improved product and content recommendations; refined search algorithms; optimized assortments informed by digital earned reviews; and expanded product views, including video content.
"We're seeing positive customer response to our evolving omnichannel capabilities intended to meet customers at every critical moment, whenever, wherever and however they choose to engage with us," said Niblock.
Customer engagement is enhanced through the many various omnichannel methods Lowe's offers it. Customers can engage with associates in-store for advice, with content on lowes.com for inspiration, with contact centers for ongoing support; and with project specialists in their homes to design, plan and manage home improvement projects.
Now Lowe's is making it easier to engage with in-home project specialists and request services on Lowes.com, by working to centralize its process for providing installation quotes. The retailer said it's rolling out this capability in the flooring category for the remainder of the year, with all U.S. markets expected to be online by the first quarter of 2018. Lowe's will expand this into other categories throughout 2018.
The retailer is also working on its MyLowes platform. Its recently simplified military recognition program allows active duty personnel and veterans to register through MyLowes and receive 10% off their purchases every day. Lowe's is also offering free parcel shipping exclusively for MyLowes members. According to the retailer, it has seen 1.5 million new memberships since it offered these expanded benefits in the first quarter. What's more, Lowe's has seen those customers increase their spend by 15% after registering for MyLowes.
To more fully capitalize on strong traffic trends, Lowe's said it began adding incremental associate hours this quarter and provides training and resources to all associates.
"We worked through the quarter to increase hours and will continue to optimize our labor allocation to ensure resources are utilized in the areas of greater need in order to improve traffic conversion," said Damron.
Lowe's will also get a new chief operating officer in 2018. Richard D. Maltsbarger, Lowe’s chief development officer and president, international, has been appointed COO, effective Feb. 3, 2018. Maltsbarger succeeds Damron who plans to retire after 36 years with the company. Damron has served as chief operating officer since 2012.
"I'm thrilled that Richard will be stepping into this role, and I'm confident that he will further propel the company's operations and customer experience to new levels of growth and success," said Damron.
Maltsbarger has led Lowe’s international operations since 2015 and has a deep background in developing and executing strategy based on customer insights.