How Lowe’s Is Reinventing Home Improvement with a Digital Marketplace with VP Michael McCluskey | 5IM
Lowe’s VP of Marketplace, Michael McCluskey, joins us to share why the retailer is diving headfirst into the world of third-party marketplaces. Learn how Lowe’s is creating an “endless aisle” experience, what this means for pro customers and sellers, and why the brand aims to become the go-to destination for everything home. Discover how Lowe’s is positioning itself in the trillion-dollar home market with a bold new e-commerce strategy.
- 0:09 – 0:31 | Introduction to Lowe’s marketplace push with VP Michael McCluskey
- 0:32 – 1:20 | Why Lowe’s prioritized a marketplace: meeting project-based customer needs
- 1:21 – 2:00 | Endless aisle strategy and rapid assortment expansion via third-party sellers
- 2:01 – 2:39 | Lowe’s dual-customer focus: serving buyers and sellers
- 2:40 – 3:52 | Extending the marketplace to serve Lowe’s growing Pro customer segment
- 3:53 – 4:42 | Key categories targeted for marketplace expansion: home décor, furniture, outdoor, tools
- 4:43 – 5:06 | Lowe’s differentiation as the “everything for home” store
- 5:07 – 5:46 | Early traction, seller interest, and long-term marketplace ambitions
Music by hooksounds.com
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Transcript
Foreigning us now for five insightful minutes to discuss his company's recent push into building a third party digital marketplace, is Lowe's company's Vice president of Marketplace, Michael McCluskey.
Speaker A:Michael, let's start with this.
Speaker A:We've been seeing a lot of momentum around marketplaces with top retail leaders.
Speaker A:Why was a marketplace prioritized at Lowe's and why now?
Speaker B:You know, for us, Marketplace, it really starts with creating an endless aisle for our customers.
Speaker C:Right.
Speaker B:You know, the unique thing about the Lowe's customer, and I think what is going to continue to differentiate us quite a bit as we expand, you know, our digital experience for customers with Marketplace is that our customers are coming to us not just to search for a product, but they're coming with a project in mind or a problem that they have to solve solve for their home.
Speaker C:Right.
Speaker B:And so we've been on a journey the past several years to really expand our digital experience at Lowe's.
Speaker B:And Marketplace just felt like the natural next step for us.
Speaker C:Right.
Speaker B:You know, we talk a lot here about the e commerce journey starts with having the right assortment for customers.
Speaker B:And we knew that really, in order to, you know, fulfill that need for customers and be there for customers, the best way to do that and to rapidly accelerate and expand the assortment that customers are looking for these days was to do so via a marketplace.
Speaker B:So we've just recently launched, and we're really excited about what we're seeing so far, the traction from customers as well as our sellers.
Speaker D:Well, Michael, you mentioned endless aisle, but what would you say are some of the other goals of the Lowe's Marketplace initiative?
Speaker B:You know, our goal at Lowe's is to be the most customer centric omnichannel retailer out there.
Speaker C:Right.
Speaker B:And so when you look into the home space, you're looking at total home total addressable market in the US Is roughly a trillion dollars, and it's highly fragmented.
Speaker B:So you think about all of the opportunity that's out there from an assort perspective.
Speaker C:Right.
Speaker B:You know, our goal starts with the customer, as I said.
Speaker C:Right.
Speaker B:And so it's really making sure that we continue to deliver on a frictionless customer experience.
Speaker B:You know, frankly, I think customers aren't thinking in the lens of marketplace.
Speaker C:Right.
Speaker B:That's for us to talk about.
Speaker D:Right.
Speaker B:But they're thinking, hey, was Lowe's able to solve my problem?
Speaker B:Did they have the item that I was looking for?
Speaker B:But we also have a new customer here.
Speaker B:As we expand this platform and this marketplace, we also are treating our sellers as a new customer into The Lowe's ecosystem.
Speaker B:Right.
Speaker B:So our ability to kind of connect the seller to.
Speaker B:To the lowest customer, a customer who's looking to solve a problem for their home, is really, you know, a big ambition of ours, and we think we're well positioned to deliver on that.
Speaker B:So our goal and really is just to continue to deliver that frictionless experience for both customers as well as our seller partners now.
Speaker A:Interesting, interesting.
Speaker A:So this experience is pretty unique.
Speaker A:And there's one aspect of it that I want to learn more about too, Michael, and that is that the initiative extends into Lowe's pro business.
Speaker A:Can you tell us more about that and how that works?
Speaker B:You know, the pro customer at Lowe's, this has been a growing segment of our business.
Speaker B:You know, roughly Today, we're around 30% of total Lowe's business.
Speaker B:Is the pro customer.
Speaker B:You know, who is that customer?
Speaker C:Right.
Speaker B:They are the small to medium size and even large size businesses that are working on projects out there.
Speaker B:And what's exciting for us is again, it's about assortment.
Speaker C:Right.
Speaker B:So it's not just the homeowner, the do it for me or do it yourself customer that's at home working on projects, but it's also this business owner that is looking for assortment.
Speaker B:And we want to be able to sat satisfy that customer as well.
Speaker C:Right.
Speaker B:And the other thing I think that's really exciting for us is when you think about, you know, the seller experience and how we can continue to differentiate ourselves is we have this customers for our sellers.
Speaker B:So they're going to shop a little bit differently.
Speaker B:They're shopping in different quantities.
Speaker C:Right.
Speaker B:If they're redoing, you know, a building and doing bathrooms within that building, they're going to look for a vanity or mirrors.
Speaker B:They're not just buying one, they're going to be buying in bulk.
Speaker B:And I think that's a pretty compelling value proposition for the seller when they start to think about new channels that they.
Speaker B:That they can launch on and grow.
Speaker B:Grow their businesses with.
Speaker D:I love this.
Speaker D:Michael, what, what other categories do you think that you'll be expanding into as this marketplace grows?
Speaker B:We think about the marketplace really as fulfilling that, that kind of torso and the long tail.
Speaker C:Right.
Speaker B:Where there's just a lot of breadth and depth within the category of assortment and taste and style.
Speaker B:Right.
Speaker B:I recently just moved here into the Charlotte area.
Speaker B:And as we think about, you know, our home and all the things that we want to bring into it, you know, we're finding that we're spending a lot of time browsing online.
Speaker C:Right.
Speaker B:So you Think about home decor, furniture accents, outdoor.
Speaker B:Right.
Speaker B:Seasonal and outdoor living.
Speaker B:But even getting into some of our core areas, like tools.
Speaker B:For example, the opportunity, even with brands that we already work with today, to extend their range in the endless aisle, fashion right into bringing all of what they offer in their full catalog onto lowe's.com will really help our customers.
Speaker B:So, you know, the way I think about it, Chris and Ann, is this is.
Speaker B:We're not trying here to be the everything store, but we do think we're well positioned to be the everything for home store, and Marketplace is going to really help us, you know, make some progress on that front.
Speaker A:You are speaking my home furnishings digital language, my friend.
Speaker A:Wow, that.
Speaker A:This is so great.
Speaker A:All right, well, let's get you out of here on this.
Speaker A:So is there anything we didn't ask you about that you're excited to tell us?
Speaker B:What I would just leave you with is this, you know, a couple of points.
Speaker B:You know, we're super early on in this journey, right?
Speaker B:This is very early innings for us with Marketplace and Lowe's.
Speaker B:But what I can.
Speaker B:But what I can tell you is, you know, the opportunity is massive.
Speaker C:Right?
Speaker B:So again, I mentioned that total home in the US Total addressable market, we're looking at a trillion dollars.
Speaker B:You know, just the sheer breadth of items that we're able to sell online.
Speaker B:We're super motivated and encouraged also by the early traction that we've seen since we've launched this business, both from customers as well as interest from the seller community to partner with us and be able to expand their business on Lowe's.
Speaker B:So I would just say, you know, expect to see a lot more from us.
Speaker B:We're really excited about this and encouraged by what.
Speaker B:What we've seen and delivered so far.
Speaker A:Great stuff, Michael.
Speaker B:Thank you.
Speaker D:Thanks, Michael.
