Lowe's Taps Technology for Retailing Edge

From ladders to lumber to light bulbs, Lowe's sells just about everything a consumer or con- tractor would need to build, repair, and maintain a home. The North Carolina-based home- improvement retailer operates more than 1,800 cavernous stores across North America. With hundreds of thousands of products in inventory and acres of free parking for its stores, Lowe's serves 17 million customers weekly and rings up $65 billion in yearly revenue. Consumers can walk into any Lowe's location and receive expert help buying tools, materials, and accessories for do-it-yourself projects like installing a floor and replacing a kitchen sink. For those who don't want to tackle projects on their own, Lowe's offers the option of

hiring a local professional through the store. The retailer also caters to contractors and others in the building trade, with a separate store checkout area and an information desk for business orders, credit accounts, pickup, and delivery. Both consumers and professionals can browse and buy through separate websites designed specifically for their needs. Lowes.com, the company's website for consumers, offers thousands of how-to guides and videos demonstrating do-it-yourself techniques, plus photos of sample rooms and other finished projects for inspiration and ideas. Consumers can use online calculators to estimate how many gallons of paint are needed for a room or how many pounds of grass seed are needed for a lawn. LowesForPros.com, the website for building professionals, includes handy features such as customizable lists of frequently ordered products and inter- active calculators for estimating project time and materials.

Facing competition from other category killers like Home Depot and from smaller hardware stores, Lowe's is harnessing technology to enhance the customer experience before, during, and after a store or website visit. The Measured by Lowe's app enables consumers (and professionals such as interior designers) to use their smartphones and tablet computers as a tape measure for calculating length, width, and height. Another Lowe's app allows users to "visualize" how a piece of furniture would look in their own home or office, via augmented reality. A third app helps consumers navigate the aisles inside a Lowe's location to find the exact shelf where a product is stored or the aisle housing a certain product category. Apps are only some of the technologies being explored by Lowe's Innovation Lab, staffed by scientists and digital experts who study consumer behavior and experiment with cutting-edge software and equipment.

Lowe's chief customer officer sees apps and other digital tools as part of "the fabric of a fully integrated customer experience, from project inspiration to customer relation- ship management to how we present products and services and create engaging content." Looking ahead, he says the retailer plans to "become even faster at anticipating customer needs and providing relevant solutions leveraging technology."

As more products for the home incorporate digital elements, Lowe's is helping its customers understand how to choose and use these devices. It has partnered with the soft- ware retailer b8ta to set up "store within a store" SmartSpot departments in dozens of Lowe's stores, staffed by representatives trained to demonstrate and explain smart-home items like digital thermostats and digital security systems. In the store, consumers can try operating some of these products with experts standing by to assist. This gives consumers more confidence that they are making an informed decision and that they will be able to make full use of their purchases

once they get home. Lowe's also gains new insights from the questions and comments of customers who visit the SmartSpot department, adding to its in-depth knowledge of needs and buying behavior.

Questions for Discussion

1. As a major retailer specializing in home-improvement products, Lowe's is considered a category killer. Does that label apply to Lowe's websites? Explain your answer.

2. How important are exterior and interior atmospherics to the image of a home-improvement store like Lowe's?

3. Lowe's partnered with a software retailer to set up smart-home departments inside some of its stores. What are the implications for Lowe's retail positioning?