Web-based sales drive strong dot-com comps
By Alan Wolf, YSN
Online appliance sales are apparently lofty for Lowe’s.
Marv Ellison, president/CEO of the No. 2 appliance retailer, told analysts on an earnings call last week that “strong appliance sales” helped drive a healthy 5% revenue increase on Lowes.com during the company’s fiscal fourth quarter, ended Feb. 3, 2023.
The gain, he said, was on top of a year-ago increase of 11.5%, and represented two-year comparable sales growth of 17%.
Boosting its web-based business are added payment options and enhanced multi-channel functionality, Ellison said. “We continue to remove friction from the customer’s online experience, which includes adding Apple Pay this quarter to improve conversion,” he told investors. “We’re also focused on removing friction from our customers’ omnichannel shopping journeys, like for appliances, where customers often shop our showrooms before making their purchase online.”
Appliances sales, both online and in-store, also contributed to positive comps for the company’s home décor category, merchandising chief Bill Boltz said.
Also aiding appliances is a new direct-ship fulfillment model for oversized products that Lowe’s is rolling out nationwide. “We continue to make strides in the rollout of our market delivery model for appliances and other big and bulky products,” Ellison said. “We added two new geographic areas this quarter, bringing us to 10 geographic regions across the country supporting more than 1,000 stores.”
The market-based delivery model, he explained, allows “big and bulky products to flow from our supply chain directly to customers’ homes, replacing our inefficient store delivery model. This delivery model is enabling us to further consolidate our industry leadership position in appliances and it positions us for profitable growth and other big and bulky product categories like grills, riding lawn mowers and stock cabinets.”
In contrast, archrival The Home Depot receives its appliance shipments at scores of local delivery hubs where they are staged for delivery for customers.
See: Home Depot Brings Appliance Delivery In-House
Despite seeing continued “solid demand” for appliances and abandoning its high-low pricing strategy for most products, Lowe’s will continue to participate in appliance promotions now that supplies have improved, the executives said.
“You guys have to remember that roughly 100,000 appliances break every day,” Boltz told analysts. “And so there’s always going to be an offer in the marketplace for appliances driven by the manufacturers, supported by the retailers.”
