Abstract
Lowe's and Home depot are two of the largest American home improvement retailer. Home depot is the most important home improvement retailer for the 2009 fiscal year in the United States and Lowe's is his main competitor. At a global level Home Depot and Lowe's are the two most important home improvement retailers right before the German corporation OBI
Home depot is a Delaware corporation that was incorporated in 1978, and is currently headquartered in Atlanta, Georgia. Home Depot sales a wide range of building materials, home improvement and lawn and garden products. Home depot retail shops are on average 105,000 square feet with an additional outdoor area of 24,000 square feet. Most of the stores are located in the United States of America but Home Depot is also a global corporation with shops in Puerto Rico, Guam, Canada, China and Mexico.
Lowe's is an American chain of retail shops for home improvement and appliances founded in 1946. The Lowe's company is now serving more than 14 million of customers thanks to more than 1,616 stores throughout the United States and Canada. Lowe's is now ranked as the second largest hardware chain just behind Home Depot.
These two corporations are selling products such as Plumbing, electrical and kitchen appliances, hardware and seasonal materials, paint and flooring furniture, and building materials such as lumber and millwork.
Nowadays these two companies have three different types of customers willing to purchase in their stores:
- DO IT YOURSELF (DIY) customers: these customers usually purchase products for their own home and who will take care of the installation by their self ;
- DO IT FOR ME (DIFM) customers: these customers are home owners who will purchase products to be installed by third parties.
Professional Customers: These customers are professional installers or repairmen that will contract with home owners for a specific project or installation and will look for supply in home improvement shops. These customers due to their frequency of purchasing are very important for companies such as Lowe's and Home Depot who will design special marketing actions to attract them and to develop loyalty (ex: credit programs, dedicated staff…)
A few time ago, home improvement was a growing market, and the importance of the DO IT YOURSELF trend was a real benefit for Home Depot and Lowe's who were recording large sales totals and a good level of profitability (ex: Home Depot net profit margin in 2007 was 7.29%). But nowadays external factors have decreased these performances and Home Depot and Lowe's are suffering from the economic turndown.
