New NYC Lowe’s locations are small-format, high-tech

The costs and limitations of urban retail space make names like Lowe’s and Home Depot a rare sight within the confines of densely-populated big cities. But Lowe’s is trying to meet the hardware needs of New Yorkers by introducing two new stripped-down, small-format locations in Manhattan.

The two locations, one in Chelsea, which opened on Aug. 31, and one on the Upper West Side, which is slated to have its grand opening on Sept. 10, are about one third the size of an average Lowe’s suburban outlet, according to an article in Fortune. However, their list of purported features indicates that the stores will not have the feel of a cluttered, labyrinthine urban mom-and-pop hardware store either. Lowe’s is doing a distinctly high-tech take on both hardware sales and promotion.

The Charlotte Business Journal reports that Charlotte-based company T1V has installed large interactive touchscreen walls and touchscreen tables in the two Manhattan stores. T1V CEO Mark Feldman told the Journal that the touchscreens provide 3-D views of appliances.

The advertising campaign for the Manhattan Lowe’s outlets has been similarly tech-forward. Last year, Ad Week lauded Lowe’s for using Vine, the popular Twitter-owned short video service, for a series of promotions called "Five in Six." The Vine spots consist of six-second long stop-motion animated home repair tips and "lifehacks." With the opening of the new Manhattan stores, Lowe’s has extended the "Five in Six" campaign from the online world to the physical, with mechanically-driven dioramas in the display windows created to mimic the stop-motion style of the Vine videos.

[Image: Lowe's Vine]

Both Lowe’s in-store technology and its marketing are in keeping with its other recent moves towards rethinking home improvement sales. Last year, the Lowe’s Innovation Lab rolled out OShbot, an in-store robotic sales assistant, and a 3-D home improvement simulator dubbed a "Holoroom."

The Manhattan stores will necessarily carry less merchandise than traditional Lowe’s outlets and focus on a product selection that caters to smaller urban living spaces. During a walking tour, however, Lowe’s representatives reportedly told Fortune that the company’s omnichannel strategies would allow for merchandise not immediately available at the smaller locations to be shipped to customers.

Lowe’s is also working with new vendors who cater to more urban living situations, such as Space Pro, according to Fortune.

BrainTrust

"The reinvention of the "mom-and-pop" requires that kind of talent, with the people skills who will make the time to personally know customers and help them buy what they need."

Chris Petersen, PhD.

President, Integrated Marketing Solutions


"My favorite retail activation strategy is "test and learn" and I applaud Lowe’s for giving these multiple technology-based explanation and assistance programs a place to grow and potentially thrive in stores."

Anne Howe

Principal, Anne Howe Associates


"This isn’t just a strategy for cities, nor just a strategy for big box stores. This is a strategy for the future of retail."

Gene Detroyer

Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.


Discussion Questions

Is rolling out small-format, high-tech urban stores a good expansion strategy for Lowe’s? How may Lowe’s be able to reinvent the mom & pop hardware store?

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Chris Petersen, PhD
Chris Petersen, PhD
8 years ago

Small-format, high-tech stores are not only a good strategy for urban markets, they are also a sign of the times and the future of retail.

There is a general “shrinking” of the store across many retailers. Best Buy is opening much smaller stores and mobile specialty stores. Even Walmart is dramatically shrinking stores to fit new environments and markets.

There are three keys to success: 1. Stores have to have the talent and people to provide an experience not found on the web, 2. The assortments need to be curated and customized for the local market and, 3. Omnichannel plays a key role in attracting customers and fulfilling a wider selection of items from the “virtual shelf” not available in-store.

The reinvention of the “mom-and-pop” requires that kind of talent, with the people skills who will make the time to personally know customers and help them buy what they need.

Anne Howe
Anne Howe
8 years ago

My favorite retail activation strategy is “test and learn” and I applaud Lowe’s for giving these multiple technology-based explanation and assistance programs a place to grow and potentially thrive in stores. Urban stores are great places for this innovation to come forward. I especially love the Vine videos coming to life in window displays!

I’d like to see the Oshbot in action. Robotic sales assistance may not resonate with shoppers the way human sales assistance does, given that empathy and the principle of common ground will be near-impossible to replicate.

Gene Detroyer
Gene Detroyer
8 years ago

This isn’t just a strategy for cities, nor just a strategy for big box stores. This is a strategy for the future of retail.

Lee Peterson
Lee Peterson
8 years ago

It’s a brand strategy, not an expansion strategy. I think the idea of smaller, more showroom-like stores is essential to the future of all bigger box stores, but in NYC you’re probably not going to make money. Logistics, labor, shipping = forgetaboutit!

At the end of the day though, you have to laud them for pushing it. As long as they don’t expect it to actually be profitable.

richard freund
richard freund
8 years ago

There is nothing like a low-tech, cluttered, mom-and-pop hardware store. The service is always the best. It’s a shame NYC doesn’t appreciate this.

Lee Kent
Lee Kent
8 years ago

This is very cool and makes no attempt to reinvent the mom-and-pop hardware store. And that is a good thing.

This format seems like a place where someone looking at a DIY project can get all the info they need and order the supplies to be delivered. I love, love, love the use of technology here.

Lowe’s is smart to take this approach. Appealing to the larger DIY project is a much bigger buy than simply being a hardware store. They are selling service here. Way smart!

Kudos and my 2 cents go to Lowe’s (even though I do bleed orange). 😉

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
8 years ago

Redecorating and fixing problems in a living space are also problems in urban areas. Creating smaller formats to bring relevant products to the consumers makes sense, so these tests have a good chance of being successful. It is important for retailers to experiment with how to offer products and services where the consumers are.

Matt Talbot
Matt Talbot
8 years ago

It’s great to see Lowe’s pushing the boundaries on their retail efforts! As is evidenced by their Innovation Lab and other data/tech centric efforts they’ve deployed, I’m sure they certainly did their due diligence on the target markets in crafting this plan. It will be interesting to see how these stores adapt and optimize, as they have increasingly collected more performance data after their openings.

Ryan Mathews
Ryan Mathews
8 years ago

I’d say it is, especially given the real estate availability/cost limitations of areas like New York City and other large metro areas.

As to reinventing the mom & pop hardware store, not sure they can do that, BUT they can make small store retailing far more attractive to customers given the breadth of inventory they have available.

Michael Greenberg
Michael Greenberg
8 years ago

They’re getting out in front of the decline in car ownership in urban areas. NYC has the lowest ownership per governing.com, but other metros are likely following suit due to Uber/Lyft and car share services.

A smaller footprint can break even on a smaller trade area, allowing for more store density. And urban areas tend to draw from much smaller geographies—drive time gravity models don’t make much sense when 30-50% of your customers don’t own cars.

If they can figure out how to get the experience right, they’ll open up a large new addressable market.