Fascinating story in The New York Times detailing the pitched battle taking place between Home Depot and Lowes, a competition that illustrates both the advantages and pitfalls of being a category killer.
The paper notes that while Home Depot has spent much of its quarter-century in business at the forefront of warehouse retailing, helping to define the very nature of what a "category killer" is, its stock price has been falling, and its stores have become stagnant and unexciting.
At Lowes, on the other hand, the focus has been on cleaner, brighter stores with wider aisles and a greater appeal to women -- which it defined as being a key and under-appreciated customer base in the home improvement field.
And now, facing competition that threatens its dominance, Home Depot is fighting back -- with its own cleaner, brighter stores, an advertising campaign that focuses on women, and new products and services that it believes will help it regain its lost appeal.
Also interesting is the fact that executives at both chains say they are competing on quality and service -- not price.
The paper notes that while Home Depot has spent much of its quarter-century in business at the forefront of warehouse retailing, helping to define the very nature of what a "category killer" is, its stock price has been falling, and its stores have become stagnant and unexciting.
At Lowes, on the other hand, the focus has been on cleaner, brighter stores with wider aisles and a greater appeal to women -- which it defined as being a key and under-appreciated customer base in the home improvement field.
And now, facing competition that threatens its dominance, Home Depot is fighting back -- with its own cleaner, brighter stores, an advertising campaign that focuses on women, and new products and services that it believes will help it regain its lost appeal.
Also interesting is the fact that executives at both chains say they are competing on quality and service -- not price.
- KC's View:
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It seems to us that part of the problem that Home Depot is dealing with is the fact that it has had three basic constituencies -- professionals, expert amateurs, and barely functional dolts. (We would fit into the latter category if we were just a bit smarter about tools and stuff.) It is very difficult to cater to all three…and in Home Depot's case, we think that folks like us got disenfranchised.
Can they fix that? Sure. Will people like us give them another chance? Probably. Could Lowes win us away if they came to town? In a heartbeat.
Lowes is just going to have to make sure that it doesn't get so big and out of touch that it makes the same mistakes as Home Depot.
These are lessons that need to be learned by all retailers -- the importance of constant evolution, the critical nature of really defining key customer needs, and the huge challenge of choosing which customers and which services fit into the overall strategy.
