Lowe's says its website has been a huge drag on the company, but it's hopeful that an overhaul will boost its sales
Lowe's CEO Marvin Ellison spoke about the company's omnichannel strategy during the company's Wednesday earnings call. In response to a question about brick-and-mortar sales, Ellison said that the company is hoping that an e-commerce overhaul will boost the performance of its physical stores. "We think it's part and parcel that Lowes.com has to improve," Ellison said. Visit Business Insider's homepage for more stories.
Lowe's is hoping to boost its brick-and-mortar sales by upping its e-commerce game, CEO Marvin Ellison said during an earnings call with analysts Wednesday. Ellison shared his thoughts on the retailer's omnichannel approach in response to a question from Cleveland Research Company CEO Eric Bosshard, who asked the leadership team what had been limiting core brick-and-mortar sales. Bosshard also asked what steps Lowe's planned to take to bolster its physical stores in 2020. In its fourth-quarter earnings, Lowe's posted a comparable sales increase of 2.5%, down from the 3.2% growth the retailer saw a year ago. "Our sales growth was driven almost entirely by our U.S. brick and mortar stores, supported by our investments in technology, store environment and the Pro business," Ellison said in a statement posted on the company's website. In the call, Ellison elaborated that the home-improvement retailer anticipated that an e-commerce overhaul would prompt a spike in Lowe's in-store sales. "A lot of home improvement transactions begin online," Ellison said in response to Bosshard's question. "They may not consummate online, but they begin online. It is a true omnichannel environment, where research and also product education happens online and then it drives traffic to the store." Ellison went on to say that limitations to Lowe's digital operations may be softening physical store sales. "Not only does it hurt your dot com sales, it actually hurts your brick and mortar sales because it limits the amount of traffic where people will show up after having quality, efficient research and decide to buy," he said. And e-commerce is one area where Lowe's has historically fizzled, according to its own leadership team. Back in November 2019, Ellison said the company was lagging when it came to its digital capabilities. At the time, the CEO said that it was "difficult" to increase dotcom sales "correctly" and in a financially responsible manner. "I would argue that there's not a brick-and-mortar retailer in the US that is our size that has such limited growth in the dotcom business," Ellison said during the November call. "Most US retailers that announce their comp growth for the quarter typically will have a dotcom number that starts with 20% growth, which is typical in this day and age. We're not there yet but we know how to get there." Lowe's is now in the process of switching from a 10-year-old system to Google Cloud. In a statement, Ellison said that the retailer has a "detailed road map in place to modernize our e-commerce platform and accelerate Lowes.com sales."
"We think it's part and parcel that Lowes.com has to improve, and when that improves it lifts the entire company from an e-commerce standpoint, from an omni-channel standpoint, and from a brick-and-mortar perspective," Ellison said.
SEE ALSO: Home Depot and Lowe's are gearing up to hire 133,000 employees for the springtime rush DON'T MISS: Lowe's CEO says e-commerce has largely been a 'mystery' for the company, and it reveals a stark reality for the home-improvement chain SEE ALSO: See what Lowe's looked like when the home-improvement giant first opened Join the conversation about this story » NOW WATCH: Robots are invading big box stores and want to help you shop
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Fears of a slowdown in the US housing market are mounting — and Home Depot just slashed its 2020 sales outlook (HD) | Markets Insider
Home Depot cut its 2020 sales forecast on Wednesday amid fears that the US housing market...Home Depot cut its 2020 sales forecast on Wednesday amid fears that the US housing market is poised for weakness in the year ahead. Shares of the home-improvement chain slipped 2% in early trading. Home Depot has struggled to boost sales and has cut its yearly outlook twice in 2019, citing uncertainty ahead and the timing of certain strategic investments. Watch Home Depot trade live on Markets Insider. Home Depot isn't betting on a housing boom in 2020. The home-improvement chain on Wednesday cut its sales forecast for 2020, signaling to investors that there could be weakness in the housing market ahead. Shares fell 2% in early trading Wednesday. Home Depot expects total sales growth in 2020 between 3.5% and 4%. Even if the company's sales fall at the top of that range, it would bring sales to about $114.4 billion at the end of the fiscal year ending January 2021, Bloomberg reported. That's below the company's 2017 forecast that it would see revenue of $115 billion to $120 billion in 2020. The disappointing 2020 forecast comes amid reports that the housing market is poised to slow in 2020. Next year could see home price growth will flatten, inventory will remain constrained, and mortgage rates will increase, all weighing on sales, according to Realtor.com's national forecast. It also comes at the end of a tough year for the retailer. Home Depot had a dismal earnings report in November that sent shares tumbling as much as 7.5% on weak earnings and a cut 2019 forecast. The November earnings release was the second time this year Home Depot has cut its year-end outlook, citing issues such as the timing of benefits associated with One Home Depot strategic investments, continued lumber-price deflation, and the potential impact of tariffs. It's also facing increased competition from Lowe's, which reported an earnings beat and boosted its 2019 forecast in November, CNBC reported. The better-than-expected results show that Lowe's CEO Marvin Ellison has been successful in turning the business around since taking the top job in 2018. Home Depot also said that in 2020, comparable sales will fall in a range of 3.5% and 4%. It also forecast operating margin of roughly 14%, below its earlier targets. The company reaffirmed its sales and profit forecast for year-end 2019. Home Depot is up roughly 26% year to date through Tuesday's close. Join the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
Bed Bath & Beyond has a new CEO 5 months after activist investors released a brutal presentation slamming the company's leadership
Bed Bath & Beyond announced that Mark Tritton, chief merchandising officer of Target, will be the...Bed Bath & Beyond announced that Mark Tritton, chief merchandising officer of Target, will be the new CEO of the company, following a five-month search for a new leader. Former CEO Steven Temares stepped down in May after a group of investors shared a brutal 168-slide presentation urging him and the board of directors to vacate in order to usher in a new era for the company. The announcement comes after Bed Bath & Beyond posted another quarter of poor sales performance last week, reporting that comparable sales decreased by 6.7% in the second quarter of 2019. Visit Business Insider's homepage for more stories Nearly five months after Bed Bath & Beyond CEO Steven Temares stepped down in response to pressure from activist investors, the struggling company has finally announced a permanent successor. The company announced on Wednesday that Mark Tritton will serve as Bed Bath & Beyond's next CEO, shortly after news broke that Tritton would be leaving his post as chief merchandising officer at Target. Tritton will officially take the helm on November 4, taking over for Mary Winston, who served as interim CEO during the five-month search. Earlier this year, a group of investors published a 168-slide presentation urging a massive leadership overhaul, including replacing Temares and the board of directors. As a result of their effort, five directors stepped down in April, before Temares followed suit in May. Read more: Bed Bath & Beyond CEO steps down weeks after activist investors release a brutal presentation slamming company's leadership In a press statement, Tritton said he looks forward to having the opportunity to help turn the beleaguered brand around amid ongoing challenges. "There is immense opportunity ahead for Bed Bath & Beyond, which remains one of the most recognizable and best loved retailers in the country today," he said. "The foundation of the Company's transformation has been set and I'm excited at the chance to apply my industry experience and expertise to build an even better business for customers, associates, and shareholders." Still, Tritton will have his work cut out for him. In a call with investors last week, the retailer reported that comparable sales declined by 6.7% in the second quarter of 2019, while total sales declined by 7.3%. Bed Bath & Beyond has struggled in recent years to adapt to the rise of e-commerce in the home goods industry. According to the press release, Tritton will be dedicated to "improving the omni-channel experience for consumers, enhancing the merchandise assortment and reviewing the Company's cost structure and asset base." "Mark's ability to re-define the retail experience and drive growth at some of the world's most successful retailers and brands makes him uniquely equipped to lead Bed Bath & Beyond during this critical time in our evolution," Patrick Gaston, Bed Bath & Beyond's chairman of the board, said in the press release. SEE ALSO: We went shopping at Bed Bath & Beyond and saw why the company is plotting a turnaround Join the conversation about this story » NOW WATCH: The rarest steak in the world can cost over $300. Here's why wagyu beef is so expensive.
This is a preview of The Omnichannel Fulfillment Report research report from Business Insider Intelligence. 14-Day...This is a preview of The Omnichannel Fulfillment Report research report from Business Insider Intelligence. 14-Day Risk Free Trial: Get full access to this and all E-Commerce industry research reports. Though rising costs associated with online shopping are cause for concern, retailers can leverage their brick-and-mortar stores to enhance the e-commerce experience and streamline the costs to themselves via omnichannel services. The most essential of these services are buy online, pickup in-store (BOPIS) — a service that allows shoppers to select and pay for an order through an online channel and then come to a physical location to fulfill it — and buy online, return in-store (BORIS), which enables consumers to come to a store to return an item purchased online. BOPIS is one of the most valuable omnichannel offerings that retailers can provide. It's also one of the fastest-growing omnichannel services among retailers, with adoption of BOPIS across big box, department store, fashion, activewear, and specialty retail verticals expected to grow from 44% adoption in 2016 to a resounding 90% by 2024. Likewise, BORIS is poised for steady growth in the near future: US retailer adoption of BORIS is expected to increase from 40% in 2017 to 81% in 2024, more than doubling over the period, according to Business Insider Intelligence estimates. As these services become increasingly popular and consumers come to rely on them, retailers will need to find a way to implement them in a way that distinguishes them from their competitors' offerings. In The Omnichannel Fulfillment Report, Business Insider Intelligence examines the current trajectory of BOPIS and BORIS and provides strategies retailers can use to implement them. We first examine the growth that each service is expected to see in the next few years, as well as the drivers of higher adoption among both consumers and retailers. We then look at some best practices that retailers can use to develop BOPIS and BORIS offerings that will help them stand above their competitors as the services grow in popularity. The companies mentioned in this report are: Amazon, Happy Returns, Optoro, Ryder Supply Chain Solutions, Walmart Here are some of the key takeaways from the report: BOPIS is expected to hit 90% retailer adoption by 2024, while adoption of BORIS is estimated to double from 40% in 2017 to 81% in 2024. This growth will be driven by the services' ability to reduce shipping costs and inspire impulse purchases from customers who are picking up or returning items in-store. Customer adoption will also grow, as those who use BOPIS can avoid shipping fees, have their orders fulfilled more quickly, and physically see their items before taking them home. Meanwhile, when consumers use BORIS, they don't have to deal with the hassles associated with shipping a return back, don't have to worry about their return getting lost in the mail, and can get their refund more quickly. Due to BOPIS' popularity, retailers will need to employ best practices to set their offerings apart from competitors. These include making orders available for same-day pickup, offering several ways to pick up orders, and streamlining the pickup process. BORIS is currently seeing low usage despite high consumer interest. However, we expect the service to take off in the next five years, which means that retailers need to assess their BORIS capabilities and implement a service that can stand out. Some key strategies for doing so include optimizing the process via mobile devices, deploying a turnkey solution from a third-party provider, and enabling employees to handle returns from anywhere in the store. In full, the report: Sizes BOPIS and BORIS adoption and provides a forecast for its growth through 2024. Looks at the factors driving adoption of the services among both retailers and customers. Outlines the best BOPIS and BORIS practices retailers can follow to set themselves apart from competitors and drive value with the services. Interested in getting the full report? Here are two ways to access it: Purchase & download the full report from our research store. >>Purchase & Download Now Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of BOPIS and BORIS services.Join the conversation about this story »