On Wednesday December 12th, Lowe’s will host its biennial investor meeting, and its first with new CEO Marvin Ellison. In a year of drastic change for Lowe’s, Kantar Consulting’s home improvement team will be listening in for the retailer’s financial guidance and goals for 2019 and beyond, as well as for some updates to its overarching strategy:
- Growth strategy: While we got a hint at various initiatives to come relating to store processes and assortment priorities in Lowe’s Q3 earnings call, the retailer’s new executive team is yet to layout a long term, tactical strategy to drive future growth that goes beyond reliance on a strong housing market. The retailer has identified areas such as growing its penetration with pro shoppers, simplifying its in-house service capabilities, and focusing on its core home improvement business as key initiatives for future profitability, and will likely use this event to give a deeper look into how it plans to achieve its long-term growth goals.
- Investment plan: In the second half of 2018, Lowe’s demonstrated that it’s willing to take a hit on earnings to build a stronger foundation for long-term success. After the retailer exited businesses that are non-core and less-profitable to its operations, we are expecting to receive a detailed plan about how capital expenditures will be allocated over the next few years to address chronic store productivity problems as well as to propel Lowe’s to be an omnichannel leader.
- Store productivity: In the short term, Lowe’s priorities have largely been store-based, with a focus on core home improvement categories and driving more efficiency across store operations. Next week, we’ll be listening for more updates regarding Lowe’s announced divestitures, such as its Mexico stores, as well as more details about how the retailer plans to optimize its associate operations, inventory management processes, and assortment strategy.
- Digital initiatives: Looking out a few years into Lowe’s long-term strategy, we expect the retailer to start laying the groundwork for how it plans to build out its digital capabilities and create a more seamless, cross-channel operation. In addition to rolling out digital improvements to grow online penetration, we are listening for any initiatives Lowe’s implement to build value for pros through digital tools, and new opportunities to connect shoppers with services online to create more seamless home solutions.
After a year of great change at Lowe’s, there will no doubt be more strategic shifts and tactical steps towards profitability announced at its conference next week. Check back to KRiQ in the coming weeks to read our full POV on Lowe’s Investor and Analyst Conference and what Lowe’s new strategic initiatives mean for suppliers.