Lowe's Goes DIY on Software Development

Date : 09/25/2019 @ 11:18PM
Source : Dow Jones News
Stock : Lowes Companies Inc (LOW)
Quote : 113.4  -1.62 (-1.41%) @ 12:59AM
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Lowe's Goes DIY on Software Development

Lowes Companies (NYSE:LOW)
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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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