- Lowe’s CEO Marvin Ellison spoke about the company’s omnichannel strategy during the company’s Wednesday earnings call.
- In response to a question about brick-and-mortar sales, Ellison said that the company is hoping that an e-commerce overhaul will boost the performance of its physical stores.
- “We think it’s part and parcel that Lowes.com has to improve,” Ellison said.
- Visit Business Insider’s homepage for more stories.
Lowe’s is hoping to boost its brick-and-mortar sales by upping its e-commerce game, CEO Marvin Ellison said during an earnings call with analysts Wednesday.
Ellison shared his thoughts on the retailer’s omnichannel approach in response to a question from Cleveland Research Company CEO Eric Bosshard, who asked the leadership team what had been limiting core brick-and-mortar sales. Bosshard also asked what steps Lowe’s planned to take to bolster its physical stores in 2020.
In its fourth-quarter earnings, Lowe’s posted a comparable sales increase of 2.5%, down from the 3.2% growth the retailer saw a year ago.
“Our sales growth was driven almost entirely by our U.S. brick and mortar stores, supported by our investments in technology, store environment and the Pro business,” Ellison said in a statement posted on the company’s website.
In the call, Ellison elaborated that the home-improvement retailer anticipated that an e-commerce overhaul would prompt a spike in Lowe’s in-store sales.
“A lot of home improvement transactions begin online,” Ellison said in response to Bosshard’s question. “They may not consummate online, but they begin online. It is a true omnichannel environment, where research and also product education happens online and then it drives traffic to the store.”
Ellison went on to say that limitations to Lowe’s digital operations may be softening physical store sales.
“Not only does it hurt your dot com sales, it actually hurts your brick and mortar sales because it limits the amount of traffic where people will show up after having quality, efficient research and decide to buy,” he said.
And e-commerce is one area where Lowe’s has historically fizzled, according to its own leadership team.
Back in November 2019, Ellison said the company was lagging when it came to its digital capabilities. At the time, the CEO said that it was “difficult” to increase dotcom sales “correctly” and in a financially responsible manner.
“I would argue that there’s not a brick-and-mortar retailer in the US that is our size that has such limited growth in the dotcom business,” Ellison said during the November call. “Most US retailers that announce their comp growth for the quarter typically will have a dotcom number that starts with 20% growth, which is typical in this day and age. We’re not there yet but we know how to get there.”
Lowe’s is now in the process of switching from a 10-year-old system to Google Cloud. In a statement, Ellison said that the retailer has a “detailed road map in place to modernize our e-commerce platform and accelerate Lowes.com sales.”
“We think it’s part and parcel that Lowes.com has to improve, and when that improves it lifts the entire company from an e-commerce standpoint, from an omni-channel standpoint, and from a brick-and-mortar perspective,” Ellison said.
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