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Lowes.com continues to lag online

CEO Ellison pledges to grow dot-com business ‘the right way’ in 2020.

BY Ken Clark

Lowe’s expects to see significant improvement in its Lowes.com business, but not until the second half of 2020.

In the second quarter, Lowe’s announced that Lowes.com had problems and that it was underperforming. Its Q2 comp growth was 4%, and systems and process issues were having a negative impact on stores’ productivity, said CEO Marvin Ellison.

The Mooresville, N.C.-based retail giant’s e-commerce arm fared no better in the third quarter, as Lowes.com produced a comp-store sales gain of about 3%.

“I would argue that there is not a brick-and-mortar retailer in the U.S. that is our size that had such limited growth in the dot-com business,” Ellison said during the company’s third-quarter earnings call.

Recent numbers support that thesis. Competitive e-commerce sites are performing much better than Lowes.com. For instance:

  • Home Depot reported 22% third-quarter sales gains at Homedepot.com.
  • Tractor Supply declined to offer specifics, but reported a “29th consecutive quarter of strong double-digit sales growth in our e-commerce business.”
  • Oak Brook, Ill.-based Ace Hardware, the third-quarter saw an 81% increase in sales at Acehardware.com.

At Lowe’s, the plan to bring online sales back to respectability begins with the technical foundations of the site, creating stability by re-platforming the entire site to Google Cloud, replacing a decade-old platform.

Marvin Ellison

Ellison pointed to a number of fixes in store for the web site. It will take steps to separate freight from the product cost as a way to improve price perception. The company will improve processes to more quickly add SKUs and drop ship vendors, and expand online assortment more rapidly. It will build capabilities to ship home improvement items that require special handling, such as lithium-ion batteries, cleaning supplies and fire extinguishers. It’s also working to improve the online customer experience with simplified search, navigation and one-click checkout.

“We know how to repair all of these capability gaps and we have a detailed roadmap combined with an exceptionally talented team with deep omnichannel experience,” Ellison said. “It will simply take time and proper sequencing.”

Ellison added that the repair of the lowes.com business is a huge priority.

“It’s not difficult to grow dot-com sales,” he said. “It’s difficult to do it correctly, meaning: make money. And so rather than having a bunch of non-productive promotions and other coupon events, we shut that down and we basically said, ‘how do we structure this business in the right way.’”

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G.Smith says:
Dec-04-2019 08:02 pm

Bad timing as the holiday season is just around the corner but sure the repair and improvement now will boost the site performance next year.

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