Lowe’s, the popular home improvement retailer, has launched a new loyalty program called MyLowe’s Rewards. This program aims to enhance customer satisfaction and loyalty, even in a somewhat uncertain home-improvement market.
Benefits of MyLowe’s Rewards
Members of MyLowe’s Rewards will have the opportunity to earn points on eligible purchases, which can later be redeemed for other products. Additionally, members will enjoy free shipping on smaller purchases, gain access to workshops, and receive exclusive sales offers.
Three Tiers of Rewards
The rewards program is structured into three tiers, each offering unique benefits that increase as customers continue to shop at Lowe’s. At the Bronze Key status level, members will earn one point for every dollar spent and receive free shipping on orders totaling $35 or more. Silver Key and Gold Key members will enjoy free shipping with no purchase minimum. Moreover, Silver Key members will earn 1.25 points for every dollar spent, while Gold Key members will earn 1.5 points. It is worth noting that customers who hold Lowe’s credit cards will automatically receive Silver Key status.
Setting a New Standard in the Home Improvement Sector
While loyalty programs have become commonplace among retailers, the home improvement sector still lags behind in their adoption. Currently, both Lowe’s and Home Depot offer rewards programs exclusively for professional contractors, leaving DIY customers without such benefits.
Marvin Ellison, Lowe’s CEO, expressed his excitement about MyLowe’s Rewards, stating, “With this program, Lowe’s becomes the only national home improvement retailer to offer distinctive loyalty benefits for both Pro and DIY customers.”
The Success of MVP Pro Rewards
Lowe’s also launched the MVP Pro Rewards program for professional contractors in February 2022. Despite being in its early stages, the program has surpassed expectations and is encouraging increased shopping frequency among its members.
Successful Home-Improvement Loyalty Program: Tractor Supply’s Neighbor’s Club
Tractor Supply’s Neighbor’s Club has proven to be an exemplary benchmark for a successful home-improvement loyalty program. Though initially launched years ago, it underwent a revamp in 2021. Currently, Neighbor’s Club boasts an impressive membership of over 32 million individuals, accounting for more than 77% of the company’s third-quarter sales.
In an October earnings call with investors, Tractor Supply CEO Hal Lawton expressed his satisfaction with the program’s performance. He noted that retention rates have never been higher, with Neighbor’s Club members consistently outperforming overall sales figures. Moreover, the quarter saw a record number of high-value customers.
These achievements are noteworthy, considering the challenges faced by the home-improvement sector last year. Consumers were deterred by higher interest and mortgage rates, leading to reduced expenditure on costly renovation projects. Consequently, home-improvement companies experienced a decline in sales.
However, analysts predict a reversal of this trend in the coming year. Wedbush, for instance, upgraded Home Depot’s rating to “Outperform” from “Neutral” recently. They anticipate that home-improvement customers will increase their spending by at least a low single-digit percentage year-over-year by the second half of 2024.
As a result of this positive news, Tractor Supply’s stock saw a modest increase of 1% to $219.18 during early trading. Meanwhile, the S&P 500 index rose by 0.1%. Although the company’s shares are down 1.5% thus far in the year, Lowe’s is optimistic about their future and has listed them as a stock pick for 2023.