Dive Brief:

• Lowe's is looking to better tap professional customer demand through new fulfillment and delivery pilots, CEO Marvin Ellison said on the company's Aug. 17 earnings call.
• The home improvement retailer launched its Pro Fulfillment Center in Charlotte, North Carolina in Q2, offering customers same and next-day deliveries directly from the facility.
• The company also expanded its fulfillment capabilities direct from Charlotte stores in April, with the rollout of a gig delivery network offering professional customers same- and next-day delivery, a spokesperson said in an email.

Dive Insight:

Lowe's and competitor The Home Depot have both invested in enhanced professional fulfillment capacity in recent months, building out operations to cater to the niche consumer segment.

The Home Depot, which has dominated the segment in the past, began a plan in 2020 to build three Georgia-based distribution centers over the following 18 months, with a key focus on fulfilling large orders for the segment with same and next-day delivery.

At Lowe's, the company hopes to make fulfillment faster and easier in a bid to be more competitive in the segment.

The Charlotte facility is one way the company is looking to speed fulfillment: As part of the pilot's launch, Lowe's expanded the facility's ability to handle large orders on multiple flatbeds, a spokesperson said. Large product quantities can now be sent to job sites with same or next-day delivery.

In designing the pilot, the company increased inventory levels for pro-specific SKUs, Ellison said during a virtual fireside chat in June. The fulfillment center is stocked with more than 1,000 professional-grade products, such as lumber, building materials, roofing, sheetrock and insulation, according to a spokesperson.

"This new Pro fulfillment center combines all these functionalities under one roof," Ellison said during the chat. "So we're excited about what we're seeing in the short run, and we have a long-term plan to take these facilities and build out a network."

Retooling its delivery operations has been a focus for Lowe’s since the early days of the pandemic, with a goal to simplify the process of getting products to customers. In doing so, the retailer aimed to free up space at stores and grow other supply chain activities, such as same-day and next-day fulfillment to job sites.

Lowe's expanded its delivery network to select Florida markets earlier this month as it continues to grow the segment.

"Because time is money for Pros, one of the most valuable ways that we can serve them is by saving them time with enhanced fulfillment," Ellison said during the Q2 call.