Building on several consecutive quarters of strong growth with pro customers, Lowe’s reported 21% growth with pro customers in the fiscal second quarter of 2021. Growth with pro customers has increased 49% on a two-year basis, according to the home-improvement retailer, while net sales grew to $27.6 billion in the quarter.
“This level of pro growth would not have been possible without our intense focus on the pro customer over the past 24 months,” president and CEO Marvin Ellison said on the company’s quarterly earnings call.
As part of its pro focus, Lowe’s took steps to improve inventory and job lot quantities in 2019 and launched its Lowe’s For Pros Loyalty program in 2020. Additionally, the home-improvement retailer introduced a Lowe’s Tool Rental program, launched a job site for pros in partnership with Streem, and partnered with HomeAdvisor to offer pro loyalty customers one-year subscriptions to the lead generation platform. Most recently, Lowe’s entered a more strategic phase of growth in the pro market by resetting the layout of its stores with pros in mind. The revamped pro shopping experience includes a dedicated Pro Zone area near the pro entrance with grab-and-go product section featuring popular pro items, and specially selected products.
In addition to the tailored shopping experience, Lowe’s also took steps to enhance the online experience of pros. Executive vice president of stores Joe McFarland said the retailer recently completed the migration of Lowe’s for Pros to the cloud.
“This important step in our pro business evolution enables enhanced features, faster updates, improved site stability, and more personalized offers for pros,” McFarland said. “Our new feature is a rapid reorder, which enables our pro customers to quickly reorder items that they frequently purchase through Lowe’s.”
Ellison said Lowe’s is also expanding products available for installation and continuing to leverage its e-commerce platform, which saw sales growth of 7% in the second quarter. The retailer delivered “strong positive” comps across kitchen and bath, flooring, appliances, and decor product categories and 17% growth on tickets of over $500, according to Ellison. Executive vice president of merchandising Bill Boltz said the company delivered double-digit comps in electrical and lumber, two pro-heavy categories.
Lowe’s also began its transformation from a store-based delivery model to a market-based delivery model for big and bulky products during the second quarter. Ellison said the retailer completed the conversion of its Florida region to a market-based delivery model for appliances, grills, riding lawn mowers, and select patio furniture. The company plans to roll out the new model nationwide over the next 18 months.
“In this new delivery model, product flows from the bulk distribution centers to cross-dock terminals directly to customers’ homes, bypassing the stores altogether,” Ellison said. “The new model is already driving higher appliance sales, improved profitability, lower inventory, higher on-time delivery rates, and improved customer satisfaction. And we’re freeing up space in our stockrooms, which will enable us to expand our same-day and next-day pro and DIY fulfillment capabilities in the near future.”
