While certain segments within retail are burning through cash, the landscape as a whole is not a wasteland. Leading home improvement retailers are among the best performers among legacy brick-and-mortar stores.
“They were in the right place at the right time,” said Sucharita Kodali, a retail analyst at Forrester.
Home Depot, Lowe’s and Ace Hardware all reported first-quarter sales growth, demonstrating that some companies continue to thrive during a difficult time for the industry.
Home improvement retailers benefitted from consumers investing more time and money in home improvement projects—a side effect of stay-at-home orders.
“We’re nesting and homes have become our sanctuary now,” said Gabriel Miller, president of the Americas at brand consultancy firm Landor.
Kodali agreed, saying, “They had the great fortune of selling products for people sheltering at home. And they enabled all the things they had invested in over the years like click-and-collect and research online, buy-in-store.”
And it shows in the numbers.
Home Depot reported a comparable sales increase of 6.4% during the first quarter as well as net sales growth of 7.1% to $28.3 billion, while Lowe’s revealed a rise in comparable sales of 11.2% and a boost in net sales of 10.9% to $19.7 billion. Ace Hardware, meanwhile, said comparable sales in the U.S. rose 4.2% and revenue grew 3.8% to about $1.4 billion.
To achieve those results, these home improvement retailers did two things right, according to Miller.
First, they made buying online and picking up in store so easy it was a better shopping experience than it was before the pandemic, Miller said. The proximity of home improvement retailers’ stores to their customers also made delivery within two to three days possible, Miller noted.
Home Depot, the largest of the three, unveiled a new tagline and ad campaign in December that showcased its efforts to make the shopping experience more seamless, highlighting its mobile app featuring image search and an inventory locator. It also noted at the time its offering of in-store pickup, same-day delivery and truck and tool rentals.
Lowe’s also invested heavily in technology, hiring close to 1,000 technologists in 2019 while rolling out new devices with apps for in-store associates to access to answer customer’s questions in real time, making for a smoother sales process.
Ace Hardware, meanwhile, teamed with Google, utilizing the technology giant’s tools to inject new life into its digital strategy due to the heightened expectations of consumers around online ordering and faster delivery. The retailer said its online business surged 580% in April primarily due to curbside pickup, in-store pickup and delivery from locally owned stores.
But the second and more important thing they did was to initially close stores to make certain they were clean and prepared for shoppers, Miller said.
During a recent pickup, Miller said, he observed store attendants in gloves and masks wiping down carts after each use, emphasizing safety.
Retailers such as Home Depot also kept the needs of employees top of mind, Miller noted, spending more money on paid time off during the pandemic.
“While it hurt the bottom line, it helped employees,” Miller said. “That doesn’t go unnoticed to the end users as consumers. We feel good about that stuff.”