Lowe’s Marketing Strategy — Prioritizing Customer Needs During COVID-19

Welcome back to the Brand Marketing Spotlight, where we analyze the ad campaigns and techniques of the world’s most successful companies. Today, we’ll explore how Lowe’s marketing strategy pivoted in the wake of the COVID-19 pandemic.

Lowe’s is a fascinating case study for anyone studying brand marketing. While the company is world-renowned, in many ways, it lives in the shadow of its larger competitor, Home Depot. Despite consistent growth over the past two decades, Lowe’s periodically misses sales targets thanks to customers looking past it towards the home improvement giant.

This year, however, Lowe’s needed to make a hard-strategic pivot in response to the COVID-19 pandemic. In doing so, it seems to be growing where other retailers are floundering — and might gain the audience it needs to thrive once the pandemic ends.

Lowe’s marketing strategy in the 2010s

Lowe’s is the second-largest hardware and home improvement chain in the world, which means it’s frequently compared to Home Depot at number one. Both retailers offer similar products and target the same audiences, making it difficult for Lowe’s to compete. Home Depot is so large that it often surpasses Lowe’s by sheer inertia, handily outperforming the brand even during years where it takes a loss.

In the late 2010s, Lowe’s conducted a brand analysis to determine where it could improve and expand. Digital marketing was named one area of investment, but the company quickly realized that it had failed to reach an untapped audience — professional contractors. Homebuilders and renovators have regular work throughout the year and need the supplies and rental tools Lowe’s offers. “I think one of the strategic missteps over the last seven years here is not really understanding what the pro customer does to the overall productivity of the business,” Executive Vice President of Stores Joseph McFarland said at the time.

In response to these insights, Lowe’s developed new messaging strategies. Along with reaching out to professional contractors, the retailer greenlit a new website and allocated 45% of its marketing budget to digital initiatives. This process is ongoing since 2017 and drives significant online sales.

In 2018, Lowe’s brought on new CEO, Marvin Ellison, who continued to implement these strategies at an organizational level. Most recently, that included hiring Marisa Thalberg, a new Chief Brand and Marketing Officer who answers to Ellison directly. At the start of 2020, Lowe’s projected continued growth, despite renewed competition with Home Depot for the professional contractor audience.

Then last March, everything changed yet again.

Changes and insights from COVID-19

Thalberg joined Lowe’s team in February 2020, one month before COVID-19 threw everyone’s plans into disarray. She wasn’t even able to establish herself at Lowe’s North Carolina headquarters, opting instead to work remotely. Yet even amidst all the confusion, Thalberg noticed that Lowe’s value to customers had increased.

As the pandemic unfolded, customers descended upon the chain en masse for cleaning supplies, essential home repair tools, and many other do-it-yourself items. Lowe’s certainly expected Spring sales growth, but COVID-19 drove a surge across every home category. As an essential retailer that emphasizes non-discretionary purchases, Lowe’s suddenly filled a new role for customers in a challenging time.

“[Before this position,]I just thought of Lowe’s as this place that always felt a little aspirational, but a little accessible,” Thalberg told CNBC, “a place you’d go to explore and find stuff that you really need.” Many customers seemed to feel the same way – by leaning into that dynamic with the right messaging, Lowe’s had an opportunity to stand out from other brands struggling to find their footing.

Lowe’s marketing strategy in the time of coronavirus

In the face of a looming recession, most brands find ways to cut spending until the economy turns around. Lowe’s took the opposite approach and dove into new opportunities. Instead of furloughing staff, for example, Lowe’s moved forward with plans to hire 50,000 new employees — and then created an additional 30,000 positions.

On the marketing front, Lowe’s increased its advertising presence to fill gaps from stalled and canceled campaigns. In a particularly bold move, it claimed an opening for a presenting sponsor for the NFL draft season. Lowe’s produced three advertisements emphasizing support for both its employees and customers staying at home, each with the tagline “Home is What Unites Us.”

Increasing ad spend during a crisis can be risky. Not only are customers shopping less, but campaigns may also come off as tone-deaf or opportunistic. Lowe’s addressed this with messaging that emphasized support over shopping. The brand encouraged customers to stay home while simultaneously implementing in-store safety measures for anyone needing urgent home repairs. Lowe’s even acknowledged first responders and health care workers with policies that let them jump to the front of store entrance line-ups.

These principles of support and safety also extended to Lowe’s NFL draft campaign. Each advertisement was created by smaller film crews using minimal footage to reduce transmission vectors. For one ad, Lowe’s used archival photos of employees helping people after natural disasters — reflecting a core element of its COVID-19 messaging strategy.

Lowe’s confidence lies in brand agility

Whether in the 2010s or today, Lowe’s has proven remarkably resourceful when it comes to reaching its audience. Whether targeting professional contractors or pivoting to reach at-homes, the retailer reacts agilely to unexpected circumstances. This kind of brand agility is challenging for a company of Lowe’s size to cultivate, let alone when facing a global crisis.

Before COVID-19, Lowe’s saw modest growth that suggested its digital strategies were paying off. Today, it’s unclear how COVID-19 or the NFL draft campaign will impact the brand. What we do know is that Lowe’s messaging has a confidence that’s rare for any brand during a global crisis. If these campaigns resonate, customers will remember Lowe’s once the pandemic is over — which means the chain may thrive in the years ahead.