With consumers relying more on contractors to tackle home improvement and construction projects after taking on such projects themselves during the COVID-19 pandemic, home improvement retailers like Lowe’s Cos Inc. are beefing up B2B ecommerce channels to win more business from professional customers.
Lowe’s says building and construction professionals account for 50% of their business. Meanwhile, do-it-yourself (DIY) customers account for the remaining half. In addition, they are bullish on professional customer sales. Their market intelligence tells them this group continues to have a healthy backlog of projects for 2023.
“Our biggest sales growth opportunities are going to be in the Pro and in the online space where we’ve improved those businesses dramatically,” CEO Marv Ellison told attendees in June at the Oppenheimer 23rd annual consumer growth & ecommerce conference. “We’ve doubled our online penetration, but they’re still — when we look specifically within the Pro businesses, we unlocked some of the digital tools, continuing to invest in inventory, fulfillment capabilities, same thing online to improving the digital experience, selling the omnichannel experience, selling the endless aisles in our stores and also very heavily investing in fulfillment capabilities that we’re unlocking in the store.”
Lowe’s is No. 12 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by their business-to-consumer web sales.
Lowe’s enhances its ecommerce experience for Pro customers
In 2022, Lowe’s set out to improve the ecommerce experience for professional customers on Lowes.com through a series of enhanced features.
Those include the ability to:
- See bulk pricing quotes.
- Place bulk orders.
- Designate where to deliver an order, such as the job site.
Professional customers can also pre-authorize employees to pick up orders and set up repeat orders. That saves them time and increases productivity, the home improvement retailer says. Contractors can also track the status of an order online.
Lowe’s uses AI, machine learning
Lowe’s is also using artificial intelligence and machine learning to track items professional customers are buying. It then anticipates which ones need to be restocked more frequently to ensure available inventory for purchases through all channels. The retailer is also leveraging its customer relationship management platform to use data about professional customers’ purchasing habits to create tailored offers for them.
“Pros tell us they love how easy and simple these tools are,” said Joe McFarland, executive vice president of stores, during a recent Lowe’s earnings call. “In one pro’s words, he appreciates the convenience of being able to get a price, get it ordered, and get it done.”
To further increase its appeal to contractors, Lowe’s introduced its MVP Pro Rewards and Partnership Program in early 2022. To make the program attractive to Pros of all sizes, MVP members can earn bonus points regardless of how much they spend online or in-store.
MVP members can:
- Earn gift cards.
- Receive exclusive offers on eligible paint purchases.
- Earn points toward free snacks or drinks at Lowe’s stores.
- Be enrolled in sweepstakes. They can win such prizes as a Ford F-150 pickup truck or Super Bowl tickets.
Plans are also in the works to add rewards that help Pros invest in their businesses.
The introduction of MVP Pro Rewards has helped boost spending among Lowe’s contractor customers enrolled in the program who use its financing options. Professional customers who engage with these programs spend three times more than Pros who don’t, Lowe’s says.
McFarland spoke during Lowe’s investor and analyst conference last December. He said he expects contractor-based initiatives to accelerate Lowe’s professional customer sales. He expects those sales to grow at two times the market rate. Overall, Lowe’s saw a 16% growth in sales for its contractor business in 2022. It has posted 10 consecutive quarters of double-digit growth for professional customer sales.
“We’re going to be outlining, probably the latter part of this year, early next year, some other key initiatives that we think will allow us to accelerate our Pro market share,” Ellison said. “But for us, because we’ve been very disciplined around the small to medium size Pro, we feel really confident that what we’re doing today will give us the ability to serve those customers at a high level.”
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