Lowe's 2009 Annual Report Download - page 15

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13
Many consumers have become
more value conscious when
making their purchasing decisions.
How has this change in consumer
mindset impacted your merchan-
dising philosophy?
CANTER: Our carefully designed
product lines off er value along the price
continuum – from the opening price
point to premium products. Merchan-
dising has always been, and will
continue to be, a priority for us, and
a diff erentiator from the competition.
Everything we do from a merchandising
perspective is conceived from the
customer’s point of view. Consumers
still want innovative and stylish products
at a value. In this environment, we’ve
changed to meet the needs of the more
value conscious consumer by tweaking
our marketing message to highlight
more of the middle and lower price
points in our product lines, and in
some instances highlight value with a
our New Lower Price campaign.
Larry Stone
President and Chief Operating Offi cer
How does your distribution and
logistics network aid in ensuring
your stores are stocked with the
right products at the right time?
MABRY: We have more than
60-plus years of experience running
central replenishment and distribution
systems. We have built sophisticated
processes, systems and a physical network
that are a real competitive advantage.
Our process starts with our planning
teams working closely with the mer-
chants and vendors to ensure we have
adequate inventory. We have installed
some of the most sophisticated demand
planning tools to help facilitate this
process. On a nightly basis our replen-
ishment systems review the products sold
in each of our more than 1,700 stores,
and we send product to replenish stock.
We have built a world class transpor-
tation and distribution network that
allows us to move product effi ciently
with great fl exibility. All of this, working
together, allows us to have the right
product at the right store at the lowest
possible cost.
During this economic cycle, the
competitive environment has
changed. How do you plan to
capitalize on this opportunity?
BROWN: roughout the economic
downturn, we have remained committed
to delivering great customer service, a
hallmark of Lowe’s. While it would have
been easy to cut staffi ng further, we felt
it was critical to our long-term customer
franchise to avoid cutting indiscrimi-
nately to drive near-term results. Balance
is the key, and we feel confi dent that if
we’ve provided a customer great service
for their maintenance needs during
the downturn, they’ll look to Lowe’s
as they begin taking on more discre-
tionary projects.
As evidence grows that the worst
of the cycle is likely behind us, we
are positioning our company for the
opportunities ahead. e competitive
Nick Canter
Executive Vice President –
Merchandising