Competing in an ever-faster, changing world NASSCOM, September 2014
Forward Looking Language
This document includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”).
Statements of the Company’s expectations for sales growth, comparable sales, earnings and performance, shareholder value, cap ital expenditures,
cash flows, the housing market, the home improvement industry, demand for services, share repurchases, the Company’s strategic initiatives and
any statement of an assumption underlying any of the foregoing, constitute “forward-looking statements” under the Act. Although we believe that the
expectations, opinions, projections, and comments reflected in these forward-looking statements are reasonable, we can give no assurance that
such statements will prove to be correct. A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve
the results either expressed or implied by our forward-looking statements including, but not limited to, changes in general economic conditions, such
as the rate of unemployment, interest rate and currency fluctuations, higher fuel and other energy costs, slower growth in personal income, changes
in consumer spending, changes in the rate of housing turnover, the availability and increasing regulation of consumer credit and of mortgage
financing, inflation or deflation of commodity prices, and other factors which can negatively affect our customers, as well as our ability to: (i) respond
to adverse trends in the housing industry, such as the psychological effects of lower home prices, and in the level of repairs, remodeling, and
additions to existing homes, as well as a general reduction in commercial building activity; (ii) secure, develop, and otherwise implement new
technologies and processes designed to enhance our efficiency and competitiveness; (iii) attract, train, and retain highly-qualified associates; (iv)
manage our business effectively as we adapt our traditional operating model to meet the changing expectations of our customers; (v) maintain,
improve, upgrade and protect our critical information systems; (vi) respond to fluctuations in the prices and availability of services, supplies, and
products; (vii) respond to the growth and impact of competition; (viii) address changes in existing or new laws or regulations that affect consumer
credit, employment/labor, trade, product safety, transportation/logistics, energy costs, health care, tax or environmental issues; and (ix) respond to
unanticipated weather conditions that could adversely affect sales. In addition, we could experience additional impairment losses if the actual results
of our operating stores are not consistent with the assumptions and judgments we have made in estimating future cash flows and determining asset
fair values. For more information about these and other risks and uncertainties that we are exposed to, you should read the “Risk Factors” and
“Critical Accounting Policies and Estimates” included in our Annual Report on Form 10-K to the United States Securities and Exchange Commission
(the “SEC”) and the description of material changes therein or updated version thereof, if any, included in our Quarterly Reports on Form 10-Q.
The forward-looking statements contained in this document are based upon data available as of the most recent quarterly release or other specified
date and speak only as of such date. All subsequent written and oral forward-looking statements attributable to us or any person acting on our
behalf about any of the matters covered in this release are qualified by these cautionary statements and the “Risk Factors” included in our Annual
Report on Form 10-K to the SEC and the description of material changes, if any, therein included in our Quarterly Reports on Form 10-Q. We
expressly disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, change in
circumstances, future events, or otherwise.
1
Strategy Overview
Competing in an ever-faster, changing world
Lowe’s – a quick introduction
Accelerating Seismic Shifts – Lowe’s Approach
Omni-Channel
Mobile
Virtual Reality
Internet of Things
Big Data
2
Agenda
Business Overview*
United States
• ~$640 Billion Home Improvement Market
Lowe’s Home Improvement
• 1,717 stores with online, contact center and
in-home / on-site capabilities
• Average 112,000 square feet of selling space
• Strategic Focus—Asset productivity through
improved capabilities within existing channels
Orchard Supply Hardware
• 72 stores with online capabilities
• Average 36,000 square feet of selling space,
offering a product selection focused on paint,
repair and backyard categories
• Strategic Focus—Operate under its own
brand accessing high-density neighborhoods
on the West coast
International
Canada
• ~US$40 Billion Home Improvement Market
• 35 stores with online capabilities
• Strategic Focus—Build scale while
continuing to evaluate expense structure
Mexico
• ~US$25 Billion Home Improvement Market
• 8 stores
• Strategic Focus—Build scale while
continuing to evaluate expense structure
Australia
• JV (1/3 ownership) with Woolworths
• 38 Masters stores with online capabilities
• Strategic Focus – Build scale while
continuing to evaluate expense structure
India – Announced May, 2014
• Bangalore Customer Support Center
• Strategic Focus – Leverage in-country
technology and analytic ecosystem
developing and managing proprietary
capabilities
3
Strategy Overview
*as of January 31, 2014
Current Multi-Channel
4
Strategy Overview—U.S. Home Improvement
STORES
ONLINE/
MOBILE
PROJECT
SPECIALISTS
IN-HOME
CONTACT
CENTER
Plan
Purchase
Fulfill
Plan
Purchase
Fulfill
Future Omni-Channel
MyLowe’s
Enhanced Mobile Technology:
iPhones & Product Locator
Flexible Fulfillment:
• Buy online pick up in store
• Buy online parcel ship from
distribution network
• Buy online deliver from store
New Project Management Tools
Expanded Fulfillment Capabilities
Making home improvement easier on the front end while managing the integration and complexity behind the scenes
5
Omni-Channel enabling home improvement
CUSTOMER EXPERIENCE OMNI-CHANNEL INTEGRATION
MAKE PROGRESS
ENJOYMENT
GET SUPPLIES
START
SIMPLEINTRICATE
CONTACT
CENTER
MYLOWES
TRUST
Optimal Source: Distribution
Accessibility:
Flexible Fulfillment
Integrated
View of the Truth
Global
Supply
MOBILE
Capabilities:
Innovative Technology
Localized
Store
PERSONAL
Support and
Knowledge: CSC
PLANNING
FINISH
C
INSPIRATION
6
Mobile at Lowe’s
Product Locator/Shopping List
Weekly Ad myLowes
Four Mobile Platforms Efficient transacting, yes, but focusing to help customers and associates
Associate Platform: Helping customers Easier tasks in the aisles
Mobile at Lowe’s
Line Busting Inventory
Maintenance
For More Information:
NASSCOM in October
Sean Bartlett
Director, Digital Experience,
Product, Omni-Channel
Associate Consumer
Virtual Reality /Visualization – Lowe’s Holoroom
Customer’s can have a hard time seeing the possibilities Lowe’s is working to make virtual reality a reality in home improvement
Virtual Reality /Visualization – Lowe’s Holoroom
visit: www.LowesInnovationLabs.com
The Internet of Things - IRIS
Lowe’s already sells every-’thing’ for the home…..and we can shape the integration
Energy Management
•Analytics
•Thermostat
•Smart Plug
•Optical Meter Reader
•Clamp
•Integrated Metering
•Water Monitoring
•Gas Monitoring
•Oil Monitoring
•Ceiling Fans
•Water Heaters
•Water Filters/Purifiers
•Temperature Sensors
•Humidity Sensors
Home Monitoring
•Motion Detectors
•Door/Cabinet/Window Sensor
•Key Fob
•Keypad
•Panic/Help Button
•IP Video
•Motion Detector(pet tolerant)
•Water Sensor
•Fire Detector
•Carbon Monoxide
•Directional Detectors
•Device Tagging
•Safety
Home Automation
•Door locks
•Wall Switches (Int/External)
•Wall Plug Sockets (Int/External)
•Controllable Light bulbs
•Window Blinds
•Water Shut Off Valves
•Window Shading
•Garage Doors
•Humidifiers/Dehumidifiers
Vehicles
•Car Integration
•EV Charging
•Prox sensing
•Maint Data
Renewables
•Solar Panels
•Wind Generators
•Storage
Senior Care
•Help Pendants
•Activity monitoring
•Bed Sensors
•Location Based Sensors
•Medical dispensers
•Automated doors
•2 Way Voice
•Stair Lifts
•Mobility Vehicles
Pets
•Door Flaps
•Location monitor
•Feeders
Garden
•Irrigation Control
•Pool Pumps
•Pool Heaters
•Machinery (Mowers etc)
Support Services
•My Lowe's
•installation
•Utility Rates
•Appliance Repair
•Pro Monitoring
•Insurance
•Nurse Call
•Location-based services
Appliances
•Fridges/Freezers
•Washers/Dryers
•Cooking
•Misc devices
•HVAC
Other Property
•2nd Home
•Parents
•RVs, Boats
The Internet of Things - IRIS
Iris comes in three different starter kit packages, each with a set of devices
specific to the following customer needs:
Home automation
Safety and security
Energy and environmentally focused
Offer Smart Home product starter kits
with á la carte options
Overlay simple, tiered services with low
priced entry levels
A simple, single UI for mobile and the
web.
The Services Allow consumers to move easily
between the service options
Free – Basic
$9.99– Premium
Then just keep adding new devices
and services
Big Data – Lowe’s Approach
Measure & Evaluate Integrate new data Create insights Most importantly, Impact decision-making frameworks Test and Learn for Insights Business Reporting and Analyses
Opportunity Identified
Set Metrics & Measurement
Plan
Perform and Monitor
Identify Variances and
Root Cause
Hypothesis
Data
Analysis Insights
Decision Impact
Applied to both
new market opportunities
operational optimization
Big Data – Lowe’s Approach
Improved mapping of customer’s home improvement journey, identifying gaps and stall-points for strategic and operational actions
Plan Purchase Fulfillment
Research, Planning, Inspiration Buying product and projects Project Completion, Enjoyment
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S t a r t O v e r
In-Home Quote
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Completion
Installation
Accelerating Seismic Shifts – Lowe’s Approach
Omni-Channel – Customer Experience Driven
Mobile – Customer/Associate Experience, Seamless Integration
Virtual Reality – Lowe’s Holoroom
Internet of Things - IRIS
Big Data – Insights creation for decision improvement
14
Summary
How Lowe’s is managing accelerating technological changes
Participate and learn
Focused, in the context of mission and strategy; for Lowe’s, that’s
improving the customer’s experience