Home Depot, Inc. (HD), Lowe’s Companies, Inc. (LOW): Crashing The Home Improvement Party

Meanwhile, Lowe’s Companies, Inc. (NYSE:LOW) is also focusing on its customer service metrics, with the goal of increasing its market share among its active customer segment. The company’s MyLowes online tool allows customers to create profiles of their home projects, to-do lists, and potential purchases. Lowe’s Companies, Inc. (NYSE:LOW) is also aggressively pushing its proprietary credit card product, which provides an option for a 5% discount off of a customer’s total purchases. While the discount has hurt the company’s overall profit margin, management hopes to instill loyalty among its customer base and provide opportunities for sales of higher margin products and services.

With a combined $125 billion in annual sales and national store bases, The Home Depot, Inc. (NYSE:HD) and Lowe’s Companies, Inc. (NYSE:LOW) have likely attained their steady state level of domestic market share. While international expansion possibilities are available, The Home Depot, Inc. (NYSE:HD)’s flameout in China shows that the warehouse-style store model in not a universally successful format. The companies need to take a page from Lumber Liquidators’ playbook and become high-touch information and service centers for their customer base, if they want to deliver on their profit goals.

While the rising tide in the housing sector is currently lifting stock prices for all competitors, rising interest rates will eventually put a crimp on stimulus-generated sales gains for the home improvement retailers. In the long run, the winners will be the companies that can form strong relationships with customers based on good advice and product value propositions. Using that measuring stick, Lumber Liquidators is the current winner.

The article Crashing the Home Improvement Party originally appeared on Fool.com and is written by Robert Hanley.

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