Lowe's Goes DIY on Software Development
September 25 2019 - 7:18PM
Dow Jones News
By Agam Shah
Lowe's Cos. is taking more of a do-it-yourself approach to
software development, retooling its e-commerce platform to boost
sales.
As part of the effort, the home-improvement retailer is
identifying key business processes that use off-the-shelf software,
such as inventory management, and coming up with a more tailored
concept for them.
The hope is to better personalize, through custom code, the
online shopping experience for a range of customers, from
professional contractors to weekend DIYers.
"To do something like this in a package software is almost
impossible, because you are dependent on a completely different
company to change their product roadmap and respond to your needs
at your speed," said Chief Information Officer Seemantini
Godbole.
The retrofit of its decade-old e-commerce platform is part of a
larger technology initiative. Lowe's last year said it would invest
$500 million annually in technology through 2021, hiring as many as
2,000 software engineers, infrastructure engineers and data
analysts to beef up its tech workforce of about 4,800. A
spokeswoman said Wednesday that "executives have shared that we
have historically underinvested in talent and technology," without
giving details.
Lowe's earlier this year bought a retail-analytics platform from
Boomerang Commerce in a move that will help automate price changes
of products across multiple sales platforms.
In August, Lowe's Chief Executive Marvin Ellison announced plans
to complete moving the Lowe's website to the cloud in the first
quarter of 2020.
"I don't think technology has had as much seat at the table as
it has now, which is really front and center," said Ms. Godbole,
who joined Lowe's from Target Corp. in November.
Lowe's expects 80% of its application portfolio to be built
internally by 2021. Applications for common tasks like payroll
processing will be purchased off the shelf.
More companies -- particularly in retail -- are hiring data
scientists, business analysts and domain experts to take advantage
of nuanced data integral to the business, said Mark Driver, a
research vice president at Gartner Inc.
"We're in an age where people have their clothes custom fit. The
same thing goes with software; it's about gaining that advantage,"
Mr. Driver said.
Much of Ms. Godbole's effort has been directed at Lowe's
e-commerce platform. Over the past nine months, the company has
deployed custom e-commerce features related to inventory, pricing
and reviews.
"If 100% of e-commerce is going to be brought in house, I would
say we are absolutely 40% of the way," Ms. Godbole said. She
expects the in-house version of key features such as online
checkout to be deployed by the middle of next year.
The company is now developing and evaluating personalization
features, where the online experience is geared around the type of
shopper. Professional customers typically know what they want, and
their product description page might include items they buy
regularly. A do-it-yourself buyer will get a different experience
with more details on features, functionality, and price comparisons
as well as videos. The company will use internally developed
machine-learning algorithms to personalize experiences, the Lowe's
spokeswoman said.
The nature of personalization for a home-improvement chain is
different than on a site like Amazon.com Inc. as there is a
connection between in-store and online shopping experiences, said
Jeriad Zoghby, global lead of digital marketplace services at
Accenture Interactive, the marketing unit of Accenture PLC.
A bathroom installation project could involve an in-store visit
plus value-added services like installation, which calls for a
different technology platform.
"My guess is that's where [Ms. Godbole is] headed, she's
realizing that they have to truly own the experience -- and to
really create a more cohesive experience, one that's fully
orchestrated," Mr. Zoghby said.
Lowe's effort to personalize online shopping comes as the
company tweaks its operations. In August, the company cut jobs as
it outsourced tasks such as assembling barbecue grills and
janitorial services.
In recent years, the retailer's sales growth has lagged behind
rival Home Depot Inc. In the latest quarter, Lowe's profit grew 10%
to $1.68 billion, helped by a 7.7% drop in expenses.
Write to Agam Shah at agam.shah@wsj.com
(END) Dow Jones Newswires
September 25, 2019 19:03 ET (23:03 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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