Lowe's 1997 Annual Report Download - page 13

Early in the morning, Lowe’s
commercial business customers
gather to pick up orders and
discuss new product offerings at
Lowe’s Commercial Sales desk.
orders received by phone or fax, and help these busy profes-
sionals get what they want—which is to get back to work!
Another customer group in a hurry (yes, they all are) is
Generation X. These children of the supersonic age grew up
with cell phones and pagers and digital organizers, and they
don’t remember a time before microwave ovens and ATM’s.
They are impatient with anything that wastes their time, but
they value information and will trust reliable sources. They
promise to be an important market for the Internet sales
program that is currently being developed. They would also be
instantly comfortable with the electronic catalog and ordering
kiosk that we’re now beta testing in Dallas.
Lowe’s entry into the metro markets of Dallas, Atlanta,
Jacksonville, and Tampa has met with great success, encourag-
ing us in the ongoing evolution of our expansion strategy.
“ Our future expansion will concentrate more on metro areas
where there are more households with higher incomes,” says
David Shelton, Senior VP of Real Estate, Engineering and Con-
struction. “ This means the best of expansion is still ahead
of us.”
To make sure that Lowe’s merchandising and marketing are
on target in these new markets, early entry teams do on-the-
ground research. “ They shop the market and check out our
competition,” says Larry Stone. “ What business hours do our
competitors keep? What are their credit options? What deliv-
ery services do they offer? What products are unexpectedly
popular? In new markets, we can’t take for granted that we
know these things. “
Greg Bridgeford agrees. “ We need to find out the distinc-
tive features of each individual market, so that we know how
to adapt our merchandise selection.”
“ We need to understand local customs and building
codes,” says Greg Wessling. “ For instance, chain link fencing is
New Housing R & R* DIY HH Appliances† Total
Home Center Market
Home Owner
Building Contractor
* R & R = Repair and Remodeling e = estimate
† Kitchen and Household Appliances
Source: Home Improvement Research Institute; Management Horizons
2002e $81.5 $46.7 $123.4 $33.5 $285.1
2001e 79.9 46.1 118.9 32.5 277.4
2000e 77.9 45.3 114.6 31.4 269.2
1999e 75.6 43.8 110.5 30.4 260.3
1998e 72.4 42.2 106.0 29.7 250.3
1997e 70.2 40.7 101.7 29.0 241.6
1996 67.8 37.8 95.5 27.8 228.9
1995 62.0 37.3 89.8 27.2 216.3
1994 61.4 38.0 86.9 25.6 211.9
1993 52.3 35.6 79.0 24.0 190.9
1992 45.5 33.0 73.9 22.2 174.6
1991 38.9 31.6 68.4 21.6 160.5
1990 45.1 35.7 69.8 22.4 173.0
1985 40.3 25.4 53.1 19.8 138.6
1980 24.4 15.6 38.1 15.1 93.2
Low e’s Total Market Potential
Dollars in Billions
11
orders received by phone or fax, and help these busy profes-
sionals get what they want—which is to get back to work!
Another customer group in a hurry (yes, they all are) is
Generation X. These children of the supersonic age grew up
with cell phones and pagers and digital organizers, and they
don’t remember a time before microwave ovens and ATM’s.
They are impatient with anything that wastes their time, but
they value information and will trust reliable sources. They
promise to be an important market for the Internet sales
program that is currently being developed. They would also be
instantly comfortable with the electronic catalog and ordering
kiosk that we’re now beta testing in Dallas.
Lowe’s entry into the metro markets of Dallas, Atlanta,
Jacksonville, and Tampa has met with great success, encourag-
ing us in the ongoing evolution of our expansion strategy.
“ Our future expansion will concentrate more on metro areas
where there are more households with higher incomes,” says
David Shelton, Senior VP of Real Estate, Engineering and Con-
struction. “ This means the best of expansion is still ahead
of us.”
To make sure that Lowe’s merchandising and marketing are
on target in these new markets, early entry teams do on-the-
ground research. “ They shop the market and check out our
competition,” says Larry Stone. “ What business hours do our
competitors keep? What are their credit options? What deliv-
ery services do they offer? What products are unexpectedly
popular? In new markets, we can’t take for granted that we
know these things. “
Greg Bridgeford agrees. “ We need to find out the distinc-
tive features of each individual market, so that we know how
to adapt our merchandise selection.”
“ We need to understand local customs and building
codes,” says Greg Wessling. “ For instance, chain link fencing is