Lowe’s (NYSE: LOW), the second biggest home improvement retailer after Home Depot (NYSE:HD), is in a self-improvement mode. It has started a new national branding campaign re-positioning itself with the tagline “Never Stop Improving” replacing the old “Let’s Build Something Together” in an attempt to capture market share and improve weakening sales. The move will be backed by the upcoming launch of an online tool “MyLowes” with features to lure and engage new and existing customers.
Lowe’s offers a wide range of home improvement products and installation services for individual home owners as well as for professional builders through its 1,700 plus stores spread across the U.S., Canada and Mexico. It competes other players such as Builders FirstSource (NASDAQ:BLDR), Sherwin Williams (NYSE:SHW) and Sears (NASDAQ:SHLD) in addition to Home Depot.
We currently have a $23 Trefis price estimate for Lowe’s Companies, which is about 20% ahead of the current market price.
Brand re-positioning to grow market share
Lowe’s reported flat sales for the first half of 2011 leading to lowered forecasts while its chief rival Home Depot posted strong results and improved forecasts for the remaining year. Lowe’s is hoping to turn its game around with its new “Never Stop Improving” campaign and “MyLowes” online tools that could help Lowe’s regain some of its market share from Home Depot.
The new strategy “Never Stop Improving” that will replace the old “Lets Build Something” and aims to improve the user experience by catering to the changing demands and preferences of consumers. It will be supported by a soon-to-be launched online tool “MyLowes” that will allow customers to manage their home improvement projects from conception and planning to execution via extensive interactive content and state-of-the-art technology. Customers can view and manage room-by-room profiles of their homes and experiment with different styles virtually.
Lowe’s also recently introduced iPad and iPhone mobile apps and eventually plans to connect MyLowes to mobile devices. The home improvement retailer hopes to improve customer engagement and gain market share by customizing and personalizing the relationship through enhanced technological features.
We think the online initiatives will help Lowe’s down the road, but we are cautious in the short run as the global economic environment struggles, spending on home improvement projects could remain under pressure until the economic outlook improves.