Lowe’s has reached a massive deal with the National Football League that makes it the league’s official home-improvement retail sponsor.
The exclusive multiyear partnership will give Lowe’s branding rights and marketing opportunities at key events including the Super Bowl, the NFL draft, and the NFL combine, Lowe’s announced Tuesday. Financial details of the partnership were not disclosed.
The deal could give Lowe’s major marketing leverage over its biggest home-improvement competitor, Home Depot.
“This was a very big strategic move for us” says Jocelyn Wong, chief marketing officer at Lowe’s.
In tandem with the partnership, Lowe’s is kicking off a new marketing campaign designed to attract new customers. The campaign specifically targets “heavy do-it-yourselfers” — those customers who take on complicated and highly technical projects — and home-improvement professionals like contractors.
“As we were looking at 2019 and beyond marketing plans we realized we had an opportunity to expand our customer base,” Wong said.
“We do really well with light-DIY customers and want to expand with heavier-DIY customers.”
This strategy appears to be a direct appeal to Home Depot’s customer base. Home-improvement professionals tend to prefer shopping at Home Depot over Lowe’s, according to research by Wedbush Securities.
Professional contracts account for 20% to 25% of sales at Lowe’s and 45% of sales at Home Depot, Wedbush Securities’ Seth Basham told Business Insider’s Áine Cain.
The tagline of the new campaign, “Do It Right,” is designed to appeal to customers who take pride in their home-improvement projects and “believe anything worth doing is worth doing right,” Wong said.
To reach this customer, the new ads will take on a “grittier” and more “authentic” tone than the company’s past campaigns, which were more “whimsical” in nature, Wong said.
“We want Lowe’s to be the place for those people who are going to go the extra mile to do it right,” she said.
Accelerated Analytics was pleased to be a repeat-sponsor of the Home Improvement Research Institute (HIRI) event on September 18 and 19. The 2018 Insights Conference hosted many DIY, home and hardware vendors and retailers to discuss key economic indicators, trends and forecasts for this division of the retail industry. Topics included global economic impacts on the home improvement market, trends in remodeling and home building, and the evolving healthy home range of products coming to market. The conference was held at the historic McDonald’s Hamburger University in Oak Brook, IL. Accelerated Analytics was the only POS analytics reporting solution provider at the event, and welcomed many current and newly-signed DIY vendor customers. Many attended a dinner hosted by Accelerated Analytics CEO, Chad Symens, and Director of Sales and Marketing, Jennifer Freyer, at Wildfire in Oak Brooke.
Building materials and home improvement retail sales are 3 to 1 higher than overall retail sales increases for this year.
What has led to the success, and which areas in the DIY space have seen the best results?
Most economists agree that the renewed housing market seen in 2016 will continue into 2017. Add to that higher consumer confidence rates, multi-family housing construction has led to higher sales at home centers and lumber dealers. Remodeling projects and big-ticket purchases are stronger. Big ticket items, such as appliances, have seen the biggest sales uptick in the segment.
Accelerated Analytics DIY customers, using their retailer POS data to analyze sales and inventory, are experiencing the same trends. Across the Accelerated Analytics customer index, June and July showed poor results, followed by an improving August and strong September. 20% of Accelerated Analytics customers’ sales tickets are big ticket items, over $900 per sale. These items were identified as appliances and other expensive items, along with supporting/supplemental products.
The NHRA is predicting 2017 sales to continue this trend and that home improvement product sales should continue to outpace overall retail sales in 2017, anticipating DIY industry growth in the range of 5%.
For more industry stats and observations, download the Accelerated Analytics Retail Industry Briefing Book, which is a monthly publication of key retail industry trends, published to over 7,000 subscribers per month.
The Home Depot has been on the great end of the rebounding housing market with a continued 4% increase in sales in the last quarter, while homeowners work on big remodeling projects like installing decks or remodeling kitchens. Without plans to add more new stores, Home Depot focuses on how to use their existing stores in new ways.
About 42% of Home Depot online shoppers order online, but pick up in the store. To accommodate that, Home Depot is allocating capital to build out store storage to hold those products. When the customer is in the store, the retailer is trying new displays that help the customer shop easier. For example, the spray-paint section is set up like a soft drink display, so as one can is selected, the next can pops into place. In the lumber and millwork flooring area, the displays are easier for the customer to shop off of on their own, and the signage has been improved.
For the increasing online sales where customers want the items shipped to their homes, Home Depot has opened 3 new fulfillment centers that can deliver orders to 90% of their customers within 2 business days. They are also looking into leveraging their store locations to use local economical transportation for buy-online, ship-to-store orders.
Source: Wall St. Journal, IHRC
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