Lowe's 2014 Annual Report Download - page 27

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desirable to our target customer; feasible - fitting within the organization's competencies; and viable - or something we can
deliver in a profitable and sustainable way. For example, during 2014, we rolled out an Outdoor Living Experience to two-
thirds of our stores in advance of the spring selling season. To help customers envision and create their outdoor space, we
displayed patio sets with coordinating rugs, umbrellas, and accessories, along with grills and other outdoor products just as they
would have expected in their own backyard. This space was re-purposed for the Holiday Décor Experience in the second half
of the year which inspired customers to decorate, raised awareness of the breadth of holiday décor and gift offerings, and
provided project solutions relevant to the holiday micro seasons. By providing an integrative and cohesive assortment of
products, inspiring and intuitive presentation and display, and optimal service components across all selling channels, we are
able to provide better customer experiences that differentiate us in the marketplace.
We continued to experience strength with our Pro customers, which have performed at or above the company average
comparable sales increase for 14 consecutive quarters. We have a strong foundation for doing business with Pro customers with
our dedicated service in the stores, inventory depth, job lot quantities and a strong value proposition. We are enhancing our
product and service offering with this important customer, including ensuring we have the types of products and brands the
Pros demand. For example, during 2014, we added brands such as Henry® coatings, Hubbell® wiring devices, GRK
Fasteners™, and Progress® Lighting, all of which help make Lowe’s the destination for the Pro. In addition, we have been
working to relaunch Lowesforpros.com, a dedicated platform which provides Pro customers with the ability to transact with us
online and provides Pros the ability to develop requisition lists, access to purchase history, and customized product catalogs.
Looking Forward
Economic forecasts for 2015 suggest moderately stronger growth in the home improvement industry. Stronger job and income
growth and improving household financial conditions are expected to build on the momentum gained in 2014. In addition, an
increase in revolving credit usage should allow customers to be more willing and able to take on discretionary home
improvement projects. Improvements in the housing market should also persist in 2015 with moderating home price growth
and mortgage rates that remain historically low.
As we move into 2015, we will focus on capitalizing on market opportunities and driving profitability within an improving
economy. We will continue to differentiate ourselves through better customer experiences and improving our product and
service offering for the Pro customer. We have made progress over the past few years to meet customers on their terms
whenever and wherever they choose to engage, and we will continue to invest in omni-channel capabilities to ensure that we
are convenient and easy to do business with. We also remain committed to improving our productivity and profitability in areas
including store payroll, marketing and efforts to leverage our scale to achieve cost savings on indirect spend.
17
This proof is printed at 96% of original size
This line represents final trim and will not print