Home Depot, Lowe’s Post Strong
Growth From Pro Customers
A Closer Look with
Home Depot and Lowe’s, the two largest home improvement centers in the country, say they have increased sales to professional customers by double
digits and are targeting them by offering better credit
terms, flexible deliveries and on-line transactions. The
growth seems to indicate both companies will continue to
seek professional (pro) customers and MRO buyers, a direct
shot at construction and industrial distributors.
Distributors should note the steps that these two giant
companies are taking to capture a higher share of the pro
construction market. Both are adding products to their pro
business lines as well offering a number of new services,
making it easier for their pro customers to order and receive supplies.
“We continue to strengthen our pro business, driving
comps well above the company average, by further advancing our products and services offering to better serve the
pro customer,” said Ricky Damron, chief operating officer
for Lowe’s, during a Q1 earnings call.
Lowe’s has been developing an omni-channel approach
to serve its pro customers. One of those strategies is using
Account Executive Pro Services (AEPs). AEPs work with
larger regional customers to have them order and replace
products across multiple geographies and locations.
“Our AEPs are a key component of our strategy to grow
our business with larger pro customers,” Damron said during the earnings call.
Lowe’s has more than 180 Pro outside representatives in
the field and says it has experienced great success with the
program as grows sales in AEP comp sales. The company
expects to add more AEPs to create additional opportunities to reach pro customers.
Damron also says that Lowe’s is using a targeted marketing approach aimed at the professional customer and
conducting special buying events for them to drive awareness and generate new business.
“We have been pleased with these results in driving both
incremental purchases with existing pro customers and
increasing relationships with new customers,” Damron said.
Lowes’ RONA Acquisition Approved
In addition, Lowe’s is expanding its reach and has just
has received regulatory approval for its huge $2.3 billion
purchase of RONA, its large competitor in Canada.
In Mid-May, Lowe’s received approval from Canadian
regulatory authorities for its $2.3 billion acquisition of large
competitor RONA, a leader in Canada’s home improvement
and renovation retail market. The transaction was approved by RONA’s shareholders in March, but was subject to
approval by regulators in the U.S. and Canada.
RONA, with its headquarters in Boucherville, Quebec,
has approximately 500 corporate and independent affiliate
dealer stores and nine hardware and construction material
distribution centers. The company has more than 17,000
employees in corporate stores and over 5,000 employees in
the stores of its independent affiliate dealers.
Lowe’s has 42 stores in Canada and virtually no presence
in Quebec, a province that accounts for about 23 percent of
the country’s population. RONA has a dominating presence
as the home improvement market retailer in Quebec.
Lowe’s had attempted to buy RONA four years ago, but
the deal failed to go through, largely because of political
backlash in Quebec.