In this article:
- Lowe’s is rolling out what it calls “market delivery” to expand sales and increase profitability with an improved home delivery process
- The plan is to roll it out over the next 18 months and delight customers with greater efficiency
In a “Mad Money” interview, Lowe’s CEO Marvin Ellison explained why his company was going to adopt a new approach to home delivery. The new approach would replace what he described as “ a very inefficient and a very prehistoric process.”
What Lowe’s had been doing to fulfill an order for a large item to be delivered to the customer’s home involved manual steps. First, the employee taking the order would have to make sure that the item was in stock. Later, a different employee would be responsible for calling the customer to arrange the delivery time. That’s not scalable.
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In contrast, the “market delivery” system would establish “a centralized distribution center” that would enable employees to check online for available inventory that can get delivered directly to the customer without having to first go to the store. This system could even get things delivered fast, as soon as the next day.
Ellson explained that this eases the burden of having to keep major appliances in stock in all store locations. Not having to move them twice for each order also reduces the risk of breakage and scuffs that can happen in transport. But what he considers the greatest savings is that of labor in not having to have two different people involved in fulfilling an order shipment.
The new home delivery process has already been tested in a pilot program in Florida. Ellison reported that both sales and profitability went up for those stores.
But the most important thing from the perspective of retention is the improved customer experience: “We have better delivery times, and most importantly, we have customers who are much happier with our process,” Ellison said in the interview.
Given the positive results, the company intends to roll out this delivery process throughout its locations nationwide. That could take upwards of a year-and-a-half. But, as long as they keep being proactive in their customer-centric initiatives, listening to customers’ needs and preferences – and communicating it clearly – they’ll stay on the right track when it comes to nurturing meaningful customer relationships.