Lowe’s has praise for the ‘creator’ customer
All customers are not created equal.
During Lowe’s annual conference Tuesday, senior VP marketing and advertising Tom Lamb defined the company’s target customer by first breaking down home improvement consumers into four distinct groups.
Lowe’s target, he said, is on the two largest spending groups, together called "creators."
Understanding the target customer is a key to the company’s strategy of using the best combination of support and value, wherever and whenever customers choose to engage. Based on market analysis, Lamb pointed to four groups of customers, each with primary shopping motivation that influences their habits.
• "Diligent maintainers" are those who get the project done and move on. They represent 15% of households and 10% of home improvement spending;
• "Opportunistic diehards" are those who relentlessly search for the best deals. They represent 20% of households and about 20% of spend;
• "Inquisitive curators" are those who seek out expert opinion and innovation for their home as a retreat. They represent 30% of households and 30% of spend; and
• Finally, the "trendsetting upgraders" are those who love exploring and experimenting with their homes. These consumers represent 30% of households and 40% of spend.
Lamb described the target customer as a combination of "inquisitive curators" and "trendsetting upgraders." Together these two groups are described as "creators," and they represent more than 70% of home improvement dollars. Creators value reputation, customer experience, product range, availability and good value, he said.
"By meeting the home improvement expectations of the creator customer, we will exceed the expectations of all customers," Lamb said.
The creator mind-set also applies to the commercial business customer, who makes up about 25% of Lowe’s sales today, he added.
Scotts expects rough patch in first quarter
Marysville, Ohio-based Scotts Miracle-Gro said Wednesday morning that its first quarter will see a bigger-than-expected loss, but it is maintaining its outlook for the full year.
Sales for the first quarter ending Dec. 31 are expected to decline about $30 million from the same quarter a year ago. The adjusted net loss in the quarter is expected to range from $70 million to $75 million, compared with a net loss of $65.6 million in the prior year.
The $1.20-to-$1.25 per share loss is greater than the $1.13 per share loss expected by Wall Street.
The first quarter is the slowest selling season for the lawn and garden company. It represents less than 10% of Scotts’ full-year total.
The company pointed to lower sales volume, "unfavorable product mix" and higher commodity costs for hurting its performance.
"The foundation we’ve built for fiscal 2012 gives us a high degree of confidence in a strong lawn and garden season," said Jim Hagedorn, chairman and CEO. "We’re excited about the innovation we’re bringing to the market, our increased investment in advertising and the continued evolution of our consumer-centric business model. The results we expect in the first quarter are in line with our internal expectations as we work with our retail partners to help them finish the year with lower inventory levels. That, in turn, should set the stage for a strong spring selling season."
The company continues to expect sales growth of at least 6% from its Global Consumer and Scotts LawnService segments in fiscal 2012.
Newell Rubbermaid gets boost in financing
Atlanta-based Newell Rubbermaid announced a new five-year $800 million syndicated revolving credit facility.
Michael Polk, president and CEO said: “This enhanced credit facility reflects our solid financial position and improved balance sheet, further bolstering our financial flexibility and demonstrating our continued ability to access capital at attractive terms.”
This facility replaces a $665 million syndicated revolving credit facility that was scheduled to mature in November 2012.
JPMorgan Chase Bank acted as Administrative Agent for the new facility. J.P. Morgan Securities, LLC, Barclays Capital, Citigroup Global Markets and RBC Capital Markets served as Joint Lead Arrangers and Joint Bookrunners.