How Lowe’s Pitches Brands Online Ads That Drive In-Store Sales

With over two decades of experience at Target, John Storms brought a wealth of knowledge to Lowe’s when he joined as senior director and head of client services in 2022.

That experience spans both retailers and advertisers. At Target, Storms started in inventory planning and climbed up through the ranks through a traditional merchandising path before shifting to ecommerce.

Storms formally started leading Lowe’s ad business, called Lowe’s Media Network, in April. This month, Lowe’s rebranded its ad business, previously called Lowe’s One Roof Media Network, to reflect how it is selling new ad formats like email, in-store audio, paid search, and direct mail to advertisers.

Lowe’s claims that its ad business reaches more than 120 million unique customers and works with more than 300 advertisers.

Roughly 11% of Lowe’s sales are made online, showing how much of the retailer’s ad business is focused on helping brands drive in-store sales after people first look at online ads.

ADWEEK caught up with Storms to talk through his vision for the rebranded ad business, how Lowe’s is differentiating itself from competitors, and why it’s challenging to stand up an ad business.

Lowe’s did not share revenue numbers for its ad business.

This conversation has been edited for clarity and brevity.

How is retail media driving revenue for Lowe’s?

We’re three-and-a-half years into this, so we’re a newer entry, but we’re seeing ad revenue growth make an impact at Lowe’s. We’ve all heard about where the business can be by 2027 — $100 billion.

One piece that is critical as we continue to be more connected to our merchandising and marketing strategies, is the real impact that the media network is going to have on driving sales and our bigger marketing initiatives. The media network is going to continue to play a role in amplifying innovation, promotions, and loyalty, which are critical to getting our customer base onto our site and into our stores.

We’ve heard a lot about the internal challenges that retailers face when building out a retail media business because the goals of the RMN can sometimes conflict with—and overlap with—the merchandising and sales teams. How is Lowe’s navigating those organizational challenges?

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.

We’re getting a lot of credit from brands for having experts who know how to talk media, but also talk about retail and assortments. That, coupled with our results, is where we’re going to work.

How is Lowe’s investing in in-store ad placements?

We have customers coming in with pretty big projects, and so there is always this focus on what is disruptive versus what’s truly going to be additive in the customer experience.

We started with overhead audio earlier this spring through our partnership with Vibenomics, and we’ve been pleased with some of the early results. It allows our brands to reach our customers in-store at that point of conversion, but it’s also helping our associates think about newness, innovation, and promotions to help serve our customers in a bigger way.

As we think about our overall store experience, video will ultimately play a role. We want to understand the sentiment on audio and see how the rest of the marketplace continues to respond to video so that it truly is deliberate and doesn’t feel like it’s disruptive to the customer experience.