Is Orange the New Blue
Will orange be the new blue? In a recent New York Post article, Lisa Fickenscher asserts that Lowe’s CEO, Marvin Ellison will be looking to “replicate Home Depot playbook” to gain back lost market share in the coming months. Ellison has already started to make some of the same dramatic personnel changes in key positions and started major reorganizations at the corporate offices. Out with the “blue guard” and in with the orange. Key roles such has EVP Merchandising with industry leader, Bill Boltz and recently Joe McFarland as EVP Stores, are just two strategic roles that have gone to former Home Depot executives not long after Ellison’s arrival.
When Home Depot was struggling in the past, they made some of the same major leadership changes, and Lowe’s is now following that strategy. These are tough decisions and good people are being impacted in Mooresville, NC. Lowe’s was arguably “top heavy”, given their store count compared to other major retailers. But these changes are being demanded by Wall Street as sales are up, but profits are still lagging in comparison with their Orange competitor.
In a recent closed-door analyst meeting, Ellison was quoted to say that Lowe’s has suffered from some “self-inflicted mistakes” pointing to merchandise being out of stock for customers and no one to be found in store aisles to help a customer locate supplies needed to complete their projects.
I have personally experienced this “self-inflicted wound” at my local Lowe’s in the Charlotte area. Lowe’s is the most convenient location and I prefer to shop Lowe’s over Home Depot, but their out of stock position on many “project critical” items forced me to drive further to Home Depot to get what I needed. I believe Ellison has rightly identified the problem, but some of his proposed solutions could still leave them short.
I can assume that my recent experience is not isolated, and the analysts on Wall Street seem to agree. Change must come to Lowe’s but making it like Home Depot is not necessarily the answer. Retail basics apply, customer service and better inventory management is a key part of Ellison’s re-engineering process for Lowe’s. In a recent analyst report, Ellison stated that he will cut hours for store associates while expanding the use of in-store technology. Cutting store associates and having more self-checkout lanes is not the answer to long-term sustainable growth and improved customer service. I am sure Ellison has a more robust plan for turn around of this 2,000+ store blue giant but reducing the head count in an already “scarce for help” store environment may leave the “big blue box” looking for further answers to take market share from Home Depot in the coming months.
This is a Do It Yourself (DIY) store, yes, we get it. However, when it comes to customer service and satisfaction, customers don’t want “DIY customer service” with more self-check outs. When it comes to real customers service, we want DIFM “Do It For Me” service to get that customers to return, time after time.