LOW Lowes Companies Inc

By Jennifer Smith 

Lowe's Cos. is beefing up its logistics network, with plans to add dozens of distribution and shipment-handling sites as part of a $1.7 billion overhaul aimed at speeding orders to customers of the home-improvement retail chain.

Lowe's said Wednesday that it would open four additional e-commerce fulfillment centers over the next 18 months, including a direct fulfillment site in Mira Loma, Calif., set to open in October to enable two-day delivery to nearly 100% of its customers.

The Mooresville, N.C.-based company also plans to open seven bulk distribution sites for large products such as appliances and barbecue grills, along with 50 cross-dock terminals where big items can be placed on delivery trucks bound for customers instead of sending them to retail stores.

Lowe's is in the midst of a five-year push to update its supply chain to meet growing digital demand and address weaknesses such as out-of-stock problems its executives have said weighed on growth. The company is retooling its hub-and-spoke distribution network as it transitions from a store-based delivery model, and it is upgrading its technology to streamline the flow of goods and improve inventory management.

"Opening these new facilities will allow our stores to operate more efficiently through improved flow management and inventory visibility and improve the customer experience with more predictable deliveries, better in-stock rates and faster fulfillment options," Don Frieson, Lowe's executive vice president of supply chain, said in a statement.

The effort, launched in 2018, comes as rival Home Depot Inc. is also revamping its distribution strategy to adapt to changes in how consumers shop.

Atlanta-based Home Depot plans to add more online fulfillment centers and local hubs for bulky items as well as dozens of direct-fulfillment distribution sites for next-day or same-day delivery of commonly ordered products.

The coronavirus pandemic is boosting e-commerce as homebound consumers order more products online and busy themselves with do-it-yourself projects during quarantine lockdowns.

Dave Sebastian contributed to this article.

Write to Jennifer Smith at jennifer.smith@wsj.com

(END) Dow Jones Newswires

August 12, 2020 17:16 ET (21:16 GMT)

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