Lowe's 2013 Annual Report Download - page 11

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We are committed to offering a wide selection of national brand-name merchandise complemented by our selection of private
brands. In addition, we are dedicated to ensuring product is sourced in a responsible, efficient, and cost effective manner
through our supply chain.
National Brand-Name Merchandise
In many product categories, customers look for a brand they know and trust to instill confidence in their purchase. Each
Lowe’s home improvement store carries a wide selection of national brand-name merchandise such as Whirlpool® appliances
and water heaters, GE®, LG® and Samsung® appliances, Stainmaster® carpets, Valspar® paints and stains, Pella® windows and
doors, Sylvania® light bulbs, Dewalt® power tools, Owens Corning® roofing, Johns Manville® insulation, James Hardie® fiber
cement siding, Husqvarna® outdoor power equipment, Werner® ladders and many more. Our merchandise selection provides
the retail and Pro customer a one-stop shop for a wide variety of national brand name merchandise needed to complete home
improvement, repair, maintenance or construction projects.
Private Brands
Private brands are an important element of our overall portfolio, helping to differentiate the Lowe's shopping experience from
the competition. We sell private brands throughout our stores including Tools & Hardware, Seasonal Living, Home Fashions,
Storage & Cleaning, Paint, Fashion Fixtures, Flooring, Millwork, Rough Plumbing & Electrical, and Lumber & Building
Materials. Some of Lowe’s most important private brands include Kobalt® tools, allen+roth® home décor products, Blue
Hawk® home improvement products, Project Source® basic value products, Portfolio® lighting products, Garden Treasures®
lawn and patio products, Utilitech® electrical and utility products, Reliabilt® doors and windows, Aquasource® faucets, sinks
and toilets, Harbor Breeze® ceiling fans, Top Choice® lumber products and Iris® home automation and management products.
Supply Chain
We source our products from over 7,000 vendors worldwide with no single vendor accounting for more than 6% of total
purchases. We believe that alternative and competitive suppliers are available for virtually all of our products. Whenever
possible, we purchase directly from manufacturers to provide savings for customers and improve our gross margin.
To efficiently move product from our vendors to our stores and maintain in-stock levels, we own and operate 15 highly-
automated Regional Distribution Centers (RDC) in the United States. Through our RDCs, products are received from vendors,
stored and picked or cross-docked, and then shipped to our retail locations. On average, each domestic RDC serves
approximately 115 stores. We also lease and operate a distribution facility to serve our Canadian stores.
We also operate 15 flatbed distribution centers to distribute merchandise that requires special handling due to size or type of
packaging such as lumber, boards, panel products, pipe, siding, ladders and building materials. Additionally, we operate five
facilities to support our import and e-commerce businesses and flexible fulfillment capabilities. Flexible fulfillment allows the
customer to order parcel post eligible products that are stocked in an RDC, a store, or in a vendor's distribution center, and have
them shipped directly to a home or place of business. Most items can be ordered and delivered within two business days at
standard shipping rates. We also utilize three third-party transload facilities, which are the first point of receipt for imported
products. The transload facilities sort and allocate products to RDCs based on individual store demand and forecasts. In
addition, we use warehouse space for other operations.
On average, in fiscal 2013, approximately 75% of the total dollar amount of stock merchandise we purchased was shipped
through our distribution network, while the remaining portion was shipped directly to our stores from vendors.
Our Services
Installed Sales
We offer installation services through independent contractors in many of our product categories, with Flooring, Millwork and
Kitchens & Appliances accounting for the majority of installed sales. Our Installed Sales model, which separates selling and
project administration tasks, allows our sales associates to focus on project selling, while project managers ensure that the
details related to installing the products are efficiently executed. Installed Sales, which includes both product and labor,
accounted for approximately 7% of total sales in fiscal 2013.
ProServices
Lowe’s ProServices is focused on supporting the Pro customer by providing them with the products and services they need to
support their business and making it easier for them to shop at Lowe's. ProServices includes a team of employees who are
dedicated to supporting the Pro customer-both in the store and at their place of business. In our stores, we have dedicated
specialists assigned to answer questions and dedicated loaders to help them get back to their job site quickly. Our Account