Lowe’s fourth quarter sales were softer than expectations, partially due to its website still being “under construction,” CEO Marvin Ellison said. However, the home improvement retailer expects to complete its website updates and gain a sales boost, as well as rollout its new point-of-sale system in its stores, this year.
The retailer is re-platforming the entire Lowes.com site to Google Cloud, which it expects to be complete in its second quarter of 2020. There will also be phases of improvements throughout the year, with no one big brand unveil.
“We're estimating in Q3 we'll start to see benefit and the customers will begin to become aware of the improved functionality,” Ellison said, which includes customers being able to check out with one click, in addition to a dynamic home page, improved delivery scheduling, and modernized navigation and search functionality.
Lowe’s will also add the ability for customers to shop by collection.
"If you're purchasing patio furniture, it's a very cumbersome process where customers will have to shop on one screen for their table, they have to toggle to another screen for the umbrella, another screen for the chairs; it is not very customer friendly,” said Ellison, noting that the improved function will be done in the early second half of the year.
Lowe’s competitor Home Depot reported online sales growth of 20.8% in its fourth quarter and 21.4% for the year, versus Lowe’s, which reported a 3% increase in Q4. The retailer expects Loews.com sales to reach high single-digit growth in the second half of the year as it completes its website work.
While the chain’s e-commerce business is under repair, its brick-and-mortar stores will roll out a new POS system in the first half of the year. The previous systems were difficult to navigate green-screen systems and associates had to toggle between multiple systems to sell product, EVP, Stores, Joe McFarland noted.
“If an associate sold an appliance with home delivery and an extended protection plan, they previously had to interact with as many as six systems to complete that transaction,” he explained. “Our new point-of-sale system has a user friendly touch screen interface the will bring multiple systems together in one screen. This will greatly simplify the work of our cashiers, driving payroll efficiency by reducing training time and allowing for a much improved customer experience at check out.”
Lowe’s expects to reinvest some of the savings from process and technology efficiency in 2020 in around 2,000 additional leadership roles in its stores. This includes 650 additional PRO supervisors to improve customer experience.
Lowe’s also said the national rollout of its new customer-centric labor scheduling system is allowing the chain to provide better department coverage and customer service. And early last year it deployed new mobile devices to store associates dubbed SmartPhones and has been adding applications to the devices, such as standardized performance scorecards, store-walk applications and a new pricing application.
“This functionality made our associates more efficient and ultimately allows them to spend more time interacting with customers,” said McFarland. “Our investments in store process and technology paid-off in 2019, driving strong payroll leverage for the fourth quarter and the fiscal year, all along improving our customer service scores by 500 basis points year-to-date.”
In the beginning of 2019, 60% of Lowe’s payroll hours were spent on tasking and 40% were spent on service, but the retailer ended the year with 48% on tasking and 52% serving the customer.