The rebound in house prices and construction hasn’t hurt, either. “We’re finally at the stage of housing recovery where homeowners are taking on larger projects,” says Brad Hunter, chief economist at HomeAdvisor. “Home improvement is the shining star within retail.”
HomeAdvisor, a web service connecting homeowners with contractors and handymen, reports that homeowners spent an average of $5,157 on home projects last year, up from $3,288 in 2015.
Both The Home Depot and Lowe’s are capitalizing on the click-and-collect model where customers order online and pick up the merchandise at the store. The Home Depot says more than 45 percent of its online orders are picked up, while Lowe’s says 60 percent.
“Because we’ve seen such a huge uptick in the amount of orders that are flowing through the stores, it’s a constant evolution of how associates pick them and where we store them,” says Stephanie Smith, The Home Depot’s vice president of direct fulfillment and delivery.
The company has increased the number of stores available for online orders and equipped sales personnel with its smartphone app. “We wanted all of our store associates to have … all the information that our customers have,” Smith says.
“The number one and two reasons people come to our site are to check price and see availability for a local location,” says Gihad Jawhar, vice president of digital for Lowe’s. “If you look at our iOS app, we’ll show you not only the particular store but the closest three to five. If you’ve ever shopped another store, it will show you that store as well.”
Digital tools are used throughout the store, says Eric Hanson, Lowe’s director of digital experience, product management and omnichannel integration. “We have six different apps that our store associates use,” he says. “If a customer comes in with dimensions, we can run quick calculations and show how much product they need.”
One area where the home improvement rivals diverge is financial performance. The Home Depot exceeded Wall Street expectations early this year, including a 5.5 percent jump in same-store sales, while Lowe’s disappointed with earnings that were lower than the previous year and same-store sales edging up just 1.9 percent, even though sales rose 10.7 percent.
Source: Kantar Retail