Lowe’s reported total sales increased 25.9% on a year-over-year (YOY) basis in the fiscal first quarter of 2021 to $24.4 billion. Comparable sales for the retailer’s U.S. home improvement business increased 24.4% YOY and Lowe’s continued to increase its market share with pro customers, with Pro comps posting 30% growth during the quarter.
“Although this has been a two-year journey, I’m very pleased with the progress that we’ve made with our pro customer,” president and CEO Marvin Ellison said during the company’s quarterly earnings conference call. “We began by addressing the basics, ensuring we were carrying the brands and products that pros need in the job lot quantities, and also provided the excellent service this busy customer expects.”
Beginning in 2019, Lowe’s began taking steps to improve inventory and job lot quantities and launched its Lowe’s For Pros Loyalty program in 2020. The retailer built on these initial initiatives by introducing a Lowe’s Tool Rental program, launching a job site for pros in partnership with Streem, and partnering with HomeAdvisor to offer pro loyalty customers one-year subscriptions to the lead generation platform. Earlier in 2021, the retailer shifted to a more strategic phase of growth in the pro market by resetting the layout of its stores with pros in mind and introducing a loyalty program for pros.
“The small- and medium-sized pro is our target customer. This customer is a frequent shopper who purchases products in multiple departments, which drives increased productivity throughout the store,” Ellison said. “And I’m confident that we have a compelling growth opportunity as we continue to improve our engagement with this highly valued customer.”
Executive vice president of stores Joe McFarland said Lowe’s pro sales associates have begun to leverage the company’s new CRM platform to “proactively engage with our pro customers and sell the entire project to them.”
“Our most compelling growth opportunity with the pro is expanding the share of wallet with our existing customers,” McFarland said. “Our new CRM platform as well as the redesign store layout that aligns project adjacencies enable us to more effectively serve their needs for the entire project across all of their jobs.”
In addition to the tailored shopping experience created with pros in mind, Lowe’s is also enhancing the online experience of pros with the migration of Lowe’s for Pros to the cloud, according to McFarland.
Online sales grew 36.5% on a YOY basis in the first quarter, according to Ellison, representing a 9% sales penetration during the first quarter of 2021. The retailer is investing in improving the online experience of customers through improved search and navigation functionality allowing customers to shop for products across categories. Additionally, executive vice president of merchandising Bill Boltz said Lowe’s is working to enhance customer loyalty through positive customer experiences on the company’s mobile app.
Lowe’s reported 13 of 15 merchandising departments generated comps of 15%, with lumber delivering the highest comp during the quarter.
“Over the past year as lumber products have been in tight supply, our merchants have worked closely with our suppliers and successfully secured new sources and additional products to assure that we can maintain a competitive in-stock position in the category,” Boltz said. “Strong in-stocks in this tight market have allowed us to continue to strengthen customer relationships, especially with the pro.”
