The world’s second largest home improvement retailer, Lowe’s Companies Inc. (LOW), replaced its old tag line “Let’s Build Something Together” with a new one “Never Stop Improving”, thereby reflecting the company’s new brand strategy.
The company commenced a new advertising campaign on September 19, 2011, as a part of its new brand positioning.
We believe that the new tag line “Never Stop Improving” would help the company to build a sense a confidence among its consumers. The new tag line mirrors the company’s endeavor of improving and developing innovative ideas to cater to the constantly changing demands and preferences of consumers.
The new tag line promises intriguing ideas and striking innovations that will capture the market in the coming years. Lowe’s will also shortly launch an online tool, “MyLowes”, to aid consumers better manage their homes and other home remodeling projects.
However, with the global economy still struggling, we believe that spending on big home improvement projects will likely remain under pressure until the housing market stabilizes, inventory levels normalize and consumer-spending rebounds. However, “Never Stop Improving” campaign and “MyLowes” may help Lowe’s in gaining a competitive advantage.
Lowe’s, which faces stiff competition from The Home Depot Inc. (HD), boasts a proven strategy of investing in stores to enhance customer-shopping experience by improving point-of-sale and directional signage, and adding a wider range of products. The company’s sustained focus on Everyday Low Prices, New Lower Price, Go Local and Specialty Sales initiatives, have helped it to grow its market share.
Earlier, Lowe’s had announced the reformation of its store and merchandising operations to promote competence, augment operational efficiencies and enrich the shopping experience for customers. Lowe’s will now operate under three divisions in the U.S. – North, South and West. Moreover, the company also reorganized its divisional structure to 14 regions from 21 regions.
Currently, we have a long-term Neutral rating on the stock.
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