Lowe's CEO says e-commerce remains a 'mystery' for the company, and it reveals a stark reality for the home-improvement chain
- Lowe's CEO Marvin Ellison said that the home improvement retailer has long "underestimated" e-commerce.
- On the company's quarterly earnings call on Wednesday, Ellison said that e-commerce sales grew around 3% for the company this past quarter, a "neutral" outcome.
- Ellison said that most other national retailers are reporting e-commerce growth figures around 20%.
- The CEO said that Lowe's is committed to building a solid online business "the right way."
- "We're not there yet but we know how to get there," Ellison said.
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Lowe's CEO Marvin Ellison told analysts that the home-improvement giant is lagging when it comes to e-commerce sales growth, but that he's confident that the company has the tools to build a successful online business in the future.In a quarterly earnings call on Wednesday, Ellison explained that in the past quarter, e-commerce growth had an "neutral impact" on the overall business. The CEO said that "dotcom" sales grew by 3% for the quarter, while overall US sales also grew by 3%.Advertisement
"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 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."
Ellison acknowledged that the company has, in the past, "underestimated the level of complexity" that goes into a successful e-commerce business. The CEO said that it became clear that the "e-commerce business is still a little bit of a mystery for us" during the holiday season last year. The retailer's website crashed last Black Friday, prompting criticism from frustrated customers on social media.Ellison said that the company has been "digging" into overhauling its e-commerce capabilities since then and added that he believes the company is "right on track."
"We've been very clear that this is a transformation," he said. "We didn't make any bones about the fact that this was a company that had great potential but that had underinvested in supply chain, IT, and also leadership development."That being said, Ellison noted that his team isn't looking to rush into the online business. The CEO said that Lowe's was hoping to install several e-commerce "fundamentals" by the second half of next year."It's not difficult to grow dotcom sales; it's difficult to do it correctly and make money," Ellison said. "Rather than having a bunch of unproductive promotions and couponing events, we shut that down and we basically asked, 'How do we structure this business in the right way?'"Advertisement
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