Lowe’s hopes digital B2B sales will help offset weaker demand for DIY items

Lowes is banking on more digital B2B sales to combat weaker demand for DIY items

Home improvement chain Lowe’s is feeling the pinch as consumers spend on home projects.

In the meantime, the company is counting on B2B e-commerce sales from professional contractors to help it weather the drought of falling revenues.

“The DIY consumer: This consumer remains very cautious, especially when thinking about larger, discretionary purchases,” Lowe CEO Marvin Ellison told attendees at the 24th annual Oppenheimer Conference on Consumer Growth and E-Commerce this week. “The DIY consumer segment and sentiment remains somewhat weak, driven by, among other factors, persistent inflation.”

Lowe’s ranks No. 11 in the Top 1000, Digital Commerce 360’s database of North American online retailers by online sales. The retailer is in the Hardware & Home Improvement category.

Lowe’s Online Sales

Lowe’s Cos. Inc. said online sales grew by about 1% in the first quarter of fiscal 2024, which ended on May 3. Meanwhile, Lowe’s total sales fell 4.0% to $21.4 billion, and comparable sales declined 4.1%.

This represents a significant improvement over the fourth quarter, when total sales declined 17% and comparable sales declined 6.2%.

The retailer also said growth in B2B and online sales partially offset declines among DIY customers, especially for larger projects.

“Our target in this segment is the small and mid-sized professional client, and that client remains resilient,” Ellison told attendees, according to a transcript from SeekingAlpha.com. “And our latest professional surveys, which we try to do quarterly, show that their backlog of work and projects is very consistent with last year, which is good news for us.”

Lowe’s says it is taking a number of important steps to accelerate one-stop and online sales for contractors.

Two of his main priorities:

Personalization of the contractor’s user experience.
Easier product recommendations and repeat purchases both online and in-store.

“We’re starting to connect that (the retailer’s professional contractor experience) to our CRM (customer relationship management) platforms in our stores. We can know who our professionals are, what they’re buying and, more importantly, what they’re not buying, and we can connect our digital capabilities to the specialists in the store who are serving our professional customers,” Ellison said.

Last year, Lowe’s put a lot of effort into investigating how its customers do business with the online retailer.

Two key points found:

Nearly one in three professionals (32%) ranked mobile apps and built-in tools designed specifically for retailers as among the top three innovations that have the greatest potential to streamline their work.
61% of professionals expect retailers to help them shop quickly so they can get back to work quickly.

To make life easier for professional contractors, Lowe’s recently introduced additions to its suite of mobile commerce tools. This includes updating the Lowes Pro app with features such as:

Online quote, so professionals can create and update online ordering offers in minutes. Professionals can also purchase online at the listed price, with price guaranteed for seven days.
Volume saving programallowing certain levels of Pro Rewards members to save on qualifying orders of $1,500 or more.
Buy it again which allows professionals to reorder frequently purchased items using the Buy Again prompt. Products can be sorted by frequency, recency, and purchase price.
Order trackingthat visualizes purchases and tracks deliveries on a centralized website for professional clients.

B2B sales account for about 25% of Lowe’s total sales, which declined 11% to $86.78 billion in 2023 from $97.06 billion in 2022.

Chief Financial Officer Brandon Sink told conference attendees that Lowe’s future priority will remain increasing sales from B2B customers.

“We continue to focus on the small and mid-sized professional, a $250 billion market that exists and is very fragmented, and those professionals continue to tell us they are not being served,” he said.

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