Sales growth increased 26.9% on a year-over-year (YOY) basis to $20.3 billion in the fourth quarter at home-improvement retailer Lowe’s. Comparable sales in the U.S. home improvement market increased 28.6% during the fourth quarter, according to the company’s fourth quarter earnings report. For the full fiscal year, sales increased from $72.1 billion in 2019 to $89.6 billion in 2020.
The growth in comps benefited from strong project demand from both DIY and pro customers, with DIY comps again outpacing pro comps during the fourth quarter. However, pro customers delivered mid-20s comps in the fourth quarter and nearly a 20% comp growth for the full fiscal year, according to president and CEO Marvin Ellison.
“Part of our Q4 success in pro was driven by our steps to tailor our service offering for these busy customers, even redesigning the footprint of our stores to facilitate a fast, intuitive shopping experience for our small and medium-sized pro,” Ellison said on the company’s earnings call. “Pros are rewarding our efforts with their repeated business, returning to shop our stores over and over again. Looking forward, we’re focused on further enhancing our service levels, both in-store and online, to meet the needs of our new and existing pro customers.”
Bill Boltz, executive vice president of merchandising, said the retailer’s initiative to reset the layout of its U.S. stores are approximately 95% complete. The layouts are designed to drive pro sales through a more intuitive and faster shopping experience, as relevant products are placed adjacent to each other. Lowe’s has also added a pro flex area for grab-and-go products at the front of the store.
Growth exceeded 16% in all 15 of Lowe’s merchandising departments, with lumber and building materials delivering strong performances during the quarter, according to Boltz.
“An improved level of in-stock and an exceptional customer service have allowed us to continue to grow our pro business in these pro-focused building product categories,” Boltz said.
Lowe’s delivered sales growth of 121% on lowes.com, the company’s third consecutive quarter with over 100% comps online. The retailer said its working on replatforming its LowesForPro initiative to the cloud, with an expected date of completion in the first half of 2021. The replatforming will “significantly enhance the features that we offer to these time-pressed customers and then further build out our loyalty with the pro,” according to Boltz.
Pro loyalty members with Lowe’s have the ability to export up 24 months of transaction history to expedite their year-end close process, according to executive vice president of stores Joe McFarland. McFarland also highlighted the retailer’s recently launched pro customer relationship management tool as a value-add service the company hopes will drive greater pro penetration.
“[The CRM tool] provides our pro desk with the tools to manage, grow, and retain pro accounts through consistent and data-driven selling actions,” McFarland said. “We will also be able to associate any transaction, regardless of tender-type, to a specific pro account, allowing us to have better record-keeping for their business. Store associate training is currently under way, and we expect that the targeted outreach enabled by this tool will facilitate stronger and more personal relationships with our pro customers.”
Lowe’s has also embarked on several initiatives targeting pro customers during the fiscal year. In the early stages of the coronavirus (COVID-19) pandemic, Lowe’s launched a job site for pros in partnership with Streem, providing an augmented video chat service allowing pros to conduct virtual home visits with clients. The retailer also partnered with HomeAdvisor, offering pro loyalty customers a free, one-year subscription to the lead generation platform and a credit for an average of 10 free job leads.
