Lowe’s Companies

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9 03, 2013

How Lowe’s Found A Way To Benefit From Home Depot

By |2017-03-03T12:07:02-05:00March 9th, 2013|Categories: Blog, Competitive Advantage|Tags: , , , , , , , |2 Comments

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Women like clean stores If you ask a business owner what they do better than their competitors, they’ll all tell you they deliver the best customer service. If you ask them to define customer service they will talk about pricing, products and all the usual things.

If you’re in the floor covering business,  having competitive pricing, a good selection,  competent installers and being nice to the customers is not customer service.

This is what’s expected in the industry; it’s the price you pay to be in business. Once you deliver the basics, you can begin to think about customer service.

In order to deliver customer service you must know your customers and your competitors. Without a clear understanding of these two, you can’t possibly begin to deliver your drop dead customer service. You can’t know too much about your competitors or your target customer.

Lowe’s Companies is a great example of the new guy on the block with a great  understanding of the competitor and their customers. With this knowledge, they’ve been able to  establish a prominent position in the market place.

Lowe’s Companies was originally opened as Lowe’s North Wilkesboro Hardware in North Wilkesboro, North Carolina in 1921 by Lucius Lowe.

Throughout the years, Lowe’s went through various formats, name changes and partners. In 1961 Robert Strickland and Leonard Herring took the company public. By 1962 Lowe’s operated 21 stores and reported annual revenues of $32 million.

In the 1980’s,  Lowe’s began to feel the pressure from the economy and the new competitor, The Home Depot. Lowe’s format was smaller stores and located in more rural settings and they were considering entry into a larger, unknown marketplace.  They probably knew if they didn’t change and become a big box store, they would be history.

Lowe’s took an interesting tact; they started opening across the street from their competitor– The Home Depot.

Many people were astounded by this move; why would you open across the street from your major competitor? Wouldn’t this be suicide?I thought so.

Despite being the new guy on the block, Lowe’s had developed a strategy that allowed them to penetrate the large markets and sit side by side with their largest competitor.

Opening across the street took a lot of moxie. Lowe’s looked like their competitor and carried most of the same products. How did they expect to thrive?

Here are things that Lowe’s understood about their competitor. The competitor had more money, had been established in these large marketplaces, and spent more on advertising. If Lowe’s could determine a competitive advantage, they would benefit from The Home Depot’s aggressive stance in the marketplace. They were bound to get customers by just being across the street.

Lowe’s also knew from the beginning,  the Depot’s primary customer was the construction trade. Early in the game, Lowe’s decided their customer was a female. This was before pink hard hats and red hammers were popular.

Did Lowe’s know they were ahead of the new female consumer trend or were they just trying to establish their presence?

The Lowe’s stores were squeaky clean. Their associates carried cell phones and the overhead paging system was gone. The stores carried household items that were not available in the Depot. They carried items such as small appliances, shower curtains and a huge quantity of window treatments and small lamps.

Customers would often complain about having to bend over to pick up something in the Home Depot and find their clothes filthy. In addition their kids were crawling under racks and coming out covered with dust bunnies.

The female customer noticed the difference between the two stores and the word was out. Lowe’s was for women and Home Depot was for men.

At one point while doing training at Lowe’s I was asked by a manager what did I think the associates should be doing when they didn’t have a customer.  I suggested they call their customers and follow-up on their installations. I was quickly told it would be better if they continued cleaning because women hate dirty stores! Wrong answer.

This is a great lesson for any business.  Can you both compete and benefit from your competitor? Most business worry about how to compete and don’t think about how to benefit from their competitor and what they’ve bought to the marketplace.

I was told by a large mall builder that if you have a new product, it’s often  better to let someone else blaze the trail. Trail blazing is expensive and doesn’t always work. If it works, it’s time for you to come and benefit from your competitor’s hard work. Just give it a new twist and the road to success will be less costly.

Looking for more on competition? Check out my blog on The Times Union, http://blog.timesunion.com/success/you-cant-deliver-great-customer-service-unless-you-talk-to-your-cusotmers/2480/

Lisbeth helps businesses build loyal relationships with their customers through customer service training and social media marketing. Her book, Red Hot Customer Service can be purchased at her web site, www.lisbethcalandrino.com.



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21 02, 2012

Could Competition be the Best Thing for Your Business?

By |2017-03-03T12:07:06-05:00February 21st, 2012|Categories: Blog|Tags: , , , , , , , , , , , , , , , |1 Comment

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How much time do you spend paying  attention to your competitors?  My experience with businesses is they only pay attention when the competitor hits them between the eyes. Then it’s about reacting rather than being proactive. Sometimes it’s easier to be a follower than a leader.

Walmart was considered the worst thing to ever invade the retail market. But Walmart, whether you like them or not, opened our eyes to pricing and what was possible. Soon we were on  our way to a new phase of retailers. Sure small local businesses closed, others found their niche and  became very successful. The Home Depot and Lowe’s Companies have had the same effect on other industries. But many smaller companies have profited from the advertising done by these two.

 If you study your competition you will develop your own niche or pout and pull up your tents and move. Success is what often kills business. Rather than realize that both success and failure are temporary they miss the winds of change. The winds are often fueled by their customer who they’ve taken for granted.

The key is to always be thinking, watching and asking questions and realize there will always be someone looking to dethrone you.

I think that Albany, New York  is about to go through a supermarket renaissance.  Soon we will have our own “Supermarket Square” around Everett Road and Central Avenue. It will be comprised of The Honest Weight Food Co-op, Hannaford Brothers, Price Chopper  and the new kid in town starting the rumble, ShopRite.  ( For those of you who are fans of Trader Joe’s and Fresh Market I don’t mean to slight you but they’re far away from  “Supermarket Square.”) Besides, without “Two Buck Chuck” Trader Joe’s is missing one of its finer elements. As Gary Vaynerchuk, who reviews wines on this popular video blog said, “There’s not a doubt in my mind that the two biggest things that have happened to the wine industry in the last 10 years are the movie Sideways and Two Buck Chuck”. Maybe Trader Joe’s will open a wine store next to their market.  

Hannaford and PriceChopper have had a lock on the area for years, competing across from each other on Central Avenue. The Honest Weight Food Coop is about to move closer to “Supermarket Square.” What will happen to them remains to be seen. They have their groopies and Gustoff,  the “cheese head” has amased himself quite a following. My next door neighbor told me she couldn’t have her dinner party until she consulted with Gusfoff about the cheese and the wine.

I believe  Price Chopper with its “gas card” and  community commitment as well as their wonderful new store left Hannaford in the dust. Funny because  Hannaford started their Nature’s Place several years ago which really catered to the “natural and organic foodies” who for the first time had lots to choose from at reasonable prices. Then all of a sudden Price Chopper expanded and blew Hannaford out of the water. At this point Hannaford looks small and uninviting by comparison. Hannaford is definitely strapped by its small store and maybe by the Delhaize Group out of Belgium who isn’t familiar with the Albany market.

One trip through Price Chopper and it’s hard to go back to Hannaford–which was my favorite because of the “Nature’s Place.” One thing about Hannaford, it’s smaller and quicker to get in and out but is this enough to keep it alive? I wonder how much business they’ve lost because of the store size and shelves that often look empty. The store needs a “make over” but the employees are still friendly, look great and always have time for a conversation.

But now the fun begins. I’ve known ShopRite  for years having had a furniture store directly in front of them  in Hudson, New York. (At the  insistence of ShopRite, it was either them or us  because they needed a parking lot where our business stood.) We closed our business and watched   as  the wrecking ball sent us into history.  After 16 years it was a big change for us, but not all change is bad. ShopRite then demolished their old building and rebuilt a magnificent store. This started in 1990–ShopRite knew that Hudson was thriving and changing.

Interestingly enough, I was given an assignment by DeLonghi to be part of ShopRite’s grand opening a couple of months ago. There I was, in the middle of hundreds of people and cooking roasted pepper panini. I can’t  remember the last time there was such excitement in town; for sure not because of a supermarket opening.

The foodies were all there, this time they were  the employees of ShopRite. The cheese boys from Jersey didn’t miss a beat, giving out big slabs of cheese along with “the cheese story. ”  The employees were definitely knowledgeable. Since that time I’ve been told that part of their training is knowing everything about the various cheeses. I loved it, felt right at home, since I come from the restaurant business. You really have to have a restaurant or cooking background if you’re Italian. Up until last year, we had a Thanksgiving cook off and everyone showed off their culinary skills. It was quite intimidating but thank goodness my 85 year old cousin decided not to compete last year with her stuffed artichokes leaving the prize money back on the table. The point is that many people take their  food seriously as does everyone in ShopRite including the cooks, and those lovingly shining up the oranges.  When the broccoli rabe was on sale people were scrambling over one another to stock up.

You know you never know what you’re missing until you get a new love in your life. Once who brings you something that you never thought possible. So it is with ShopRite. Customer service people standing at the end of the checkout counters asking if you have everything. 

This is so smart, great customer service–“I’m here to help and make sure you haven’t forgotten anything.” How many times have you been in the check out line, forgot something but didn’t want to lose your place in line? I wonder if they’re keeping track of how much is added to the customer’s bills at the end of the day because the customer service person has gone back to “pick up a few things” you might have missed.  “I brought an extra dozen eggs in case you need one more.” Customer service for sure can make you money.

Everyone in customer service seems to take their jobs seriously, I didn’t see anyone rolling their eyes when the old lady dropped her groceries out of her cart. You and I have both seen that in our supermarket travels.

Having culinary trained chefs in the kitchen is a nice touch; a better touch is one walking around and talking with customers. Now that’s customer service. I made it a point to talk with chef, compliment him on his tofu dishes which were very good. Cooking classes, recipes, small cafe to have lunch and the Health and Wellness Center, which includes an on site registered dietitian. My friend actually had a consult at the Wellness Center and said it was amazing; no lectures,  just a conversation–“tell me what your day is like and we’ll figure out how to work in the foods that will keep your  blood sugar from spiking.”

The amount of prepared food made me realize that ShopRite had done their homework. Yes you can get baked chicken anywhere but won ton soup? (Which was quite good by the way. Besides, what single person needs a whole chicken?) Small meals packaged,  a varied menu, lots of steamed fish and vegetables and cooking going on all day.

So what to do if you’re not the new kid on the block for some new ideas? I think it’s unwise to take your customers for granted. Some of us get out of town occasionally, have been to Whole Foods and Trader Joe’s.  We know there’s better things out there and we’ve been salivating and waiting.

How will ShopRite fit into the community? “ShopRite Partners In Caring” supports emergency food pantries, soup kitchens, homeless shelters and much more. Sounds like they have their niche.

Ask your customers how you could kick it up a notch and listen. Don’t laugh in the back room because the customer wants you to put in a day care center. Of course ShopRite has a day care center or two around the country.

Have a consumer advocate group for your business, ask them, what  do they see in  the future for your business? Maybe you won’t be making Sweedish meatballs like IKEA but that probably seemed pretty wild in the day.

It’s hard to remain a leader but customer retention is the key to a successful business. Talking with them regularly will  give you new ideas about how to turn them into advocates for your business. The  key is not to be on the end of the curve but to set the curve. This means always looking for the next good idea.

The worst thing you can do is behave as if your customers don’t  matter. Businesses do this by thinking  customers will remain loyal no matter how they’re treated.

Not so honey bunch, there are too many other choices to stay around and be ignored.

Lisbeth Calandrino has been a business coach for over 20 years and develops customer service and sales training programs for businesses of all sizes. Lisbeth still has her grandmother Christine’s recipes and can cook up a pretty mean anchovy and tuna sauce.

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