Organizationally, we have been through a modernization of our operating model. Merchandising and marketing in totality are closely aligned. From our CMO rolling up to merchandising, it has created this culture of connectedness.
When we started this business at Lowe’s, we spent more time internally building relationships than externally. It is easy to talk about the impact that we have to make with brands, but from an overall standpoint of how we are ultimately advocating for our merchants’ assortments and their strategies, we have to start within: building a client service organization, bringing in really strong retail and retail media talent.
That focus internally over the first couple of years has created stronger relationships and given us a lot more confidence in the organization and our merchants, minimizing some of those media network growing pains.
People often talk about retail media ‘collapsing the marketing funnel.’ And while that’s a buzzy statement, it poses measurement challenges. How is Lowe’s approaching measurement and metrics to ensure that you have the right tools for advertisers?
I don’t know if the funnel ever really existed in the specialty realm. There is not a linear customer journey in home improvement. We just put a new outdoor fan on my porch and that was a six-month decision that my wife and I made. It didn’t start with us looking up something, going to Lowe’s, and making that purchase. We were on Pinterest, we went into the store, we liked what we saw but we didn’t know if we were ready to install it. We went back and ultimately bought it on Lowes.com. It was a very nonlinear journey.
When we talk about the funnel collapsing, we’re acknowledging that through customer insights, there is a nonlinear sequence to how we want to work with our brands, driving inspiration at that initial point to get them excited about a product, and then getting them to convert. Last year, we expanded to email, more app placements, paid search, and in-store audio. We’re starting to offer more metrics to demonstrate the benefit of each of those moments.
We haven’t perfected it—I don’t think anyone in the retail media space has truly perfected every channel. As we get our brands invested more, they’re seeing stronger returns holistically. We’re also starting to invest in more metrics that give us more insight into the impact. For example, lifetime value or project-time value. If we can say, that a brand investing in Pinterest for six months did yield conversions in-store, that’s important for us.
How is Lowe’s working to differentiate itself in an increasingly crowded RMN landscape? How does your RMN offer a unique experience to customers, endemic advertisers, and non-endemic advertisers?
We’re focusing, in the near term, on endemics.
In terms of how we stand out in the clutter, one is having the scale in the audience. That’s critical in how we reach a broad, dynamic customer base of homeowners and pros—whether that’s small, medium, or large pros.
When it comes to endemic opportunities, we are telling a lot of Lowe’s differentiated stories. We have initiatives like our DIY MyLowe’s Rewards. Our partnerships with the NFLand Lionel Messi are differentiated initiatives that are reaching new audiences. We’ve made a lot of advancements in our curated offering, giving customers the right tools versus just endless aisles of choices.