Lowe's 2000 Annual Report Download - page 6

Lowe’s Companies, Inc.
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historically and consistently exhibits during difficult
economic times. Typically, even when the economy
slows, homeowners continue to invest in one of
their most important, and enduring assets — their
home. Home ownership remains at historically high
levels, and as interest rates decline, attractive re-
financing encourages home improvement spending.
In 2001, we plan to open an additional 115 to
120 stores, 65 percent of which will open in metro-
politan markets with populations greater than
500,000. This aggressive expansion will build on
our established base of 650 stores in 40 states
reported at the end of 2000.
With Lowe’s stores now spanning the United
States, advertising is even more important in creating
brand awareness. February 2001 was a milestone
for Lowe’s, marking the launch of our national net-
work television advertising campaign. With Lowe’s
expansion into California, the Pacific Northwest
and the Northeast, national network advertising is
now a cost-effective medium for introducing Lowe’s
to millions of Americans. This step into the national
advertising arena parallels Lowe’s tremendous
growth and foreshadows our successes yet to come.
As Lowe’s grows, we must constantly fine-tune our
merchandise offering, keeping an eye on the needs
and wants of our customers. A major initiative of the
past year, and an area of continued opportunity for the
future, has been a shift to carrying a larger selection of
increasingly popular premium grade products, accen-
tuating a range of price points, and effectively moving
the consumer “up the continuum” to better value.
Consumers have told us that they want higher-end,
better quality and uniquely different products, and
our merchants are providing and presenting them in
the ideal environment — our attractive, customer-
friendly stores. Our cleaner, brighter, better organized
and easier-to-shop stores provide an excellent envi-
ronment in which to showcase better brands and pre-
mium products. Innovative, informative and even
inspirational displays also add to the interest and
enjoyment of shopping at Lowe’s.
As the affluent Baby Boomers evolve from a gen-
eration of DIYers to Buy-It-Yourselfers (BIYers), our
ability to offer complete, solution-based product and
installation programs is critical to success. Key sales
initiatives in 2000 focused on Commercial Business
Customers (CBCs), Special Order Sales (SOS), and
Installed Sales. These programs will continue as sales
drivers for 2001 and beyond, as we remain focused
on meeting our customers’ needs and exceeding their
expectations.
At Lowe’s, we want our customers to shop in a
way that best suits their needs. That’s why in 2000
we re-launched a new and improved lowes.com.
Lowe’s internet presence allows us to offer more
special order products as well as enhance customer
relationships, with instructions for more than 300
DIY projects available online.
In an effort to continually improve our processes
and provide better value for our customers, we inte-
grated our technology and logistics groups in 2000,
bringing together two of Lowe’s strongest competi-
tive advantages. This synergy between inventory
management, distribution, Management Informa-
tion Systems and the internet reduces costs in the
inventory supply chain. Enhancing our existing
logistics network of highly automated distribution
facilities, we broke ground last year on two new
regional distribution centers in Perris, CA, and
Findlay, OH. Opening in 2001, these distribution
centers will add to our logistics infrastructure and