Retail showdown: Safe curbside pickup at Home Depot versus Lowe's (plus free worksheet)
Before COVID, just 17 retailers in the Digital Commerce 2020 Top 1000 Report offered curbside pickup services. Then the pandemic hit, and BOPAC (Buy Online Pick Up at the Curb) went from a "nice-to-have next year" to a "mission-critical next week" service. As The Home Depot’s Chief Information Officer (CIO), Matt Carey, described the situation, it was suddenly "Black Friday every day" at the curbside pickup of Home Depot.
In this five-round showdown, we evaluate how home improvement competitors Home Depot and Lowe's rolled out curbside pickup in a hurry at all their locations. We'll assess the winner of this showdown based on these five factors:
- Leadership response
- Technology stack
- Customer information
- Order logistics
- Pickup experience
After the final round, we declare the winner and extract learnings from the showdown for implementing your own curbside pickup Home Depot style.
Round 1: How did the leadership team respond?
For any organization, managing a crisis successfully starts with its leaders: do they assess the situation accurately? Can they formulate an effective strategy? How quickly can they implement their plan? And do they keep all stakeholders motivated?
Battleground: Speed of execution
Home Depot repurposed an entire fulfillment center in only three weeks and pivoted the organization's focus to provide Home Depot curbside pickup services at all stores within 90 days. Meanwhile, Lowe’s announced the availability of curbside pickup at all its locations at the end of April. Joe McFarland, their Executive Vice President of Stores, also set his sights on the 60% of online orders that get picked up in stores. He and his team are working to roll out self-service lockers to more than 1,700 locations by March 2021, a year ahead of the original schedule.
Lowe's also empowered local leaders further down in the organization to make their own decisions on how to respond to COVID. As Lowe's CEO Marvin Ellison explains, "if I had a store in Raleigh that had a local hospital that needed N-95 masks, we told them in Raleigh, they can take care of that. [..] We did not try to orchestrate it from here."
From the same interview, we learn that Ellison made their internal safety and preparedness handbook available to other, smaller retailers. With such materials, these organizations could learn from Lowe's experience of reopening and safely returning to business.
Verdict: Compassion wins the day for Lowe's
We call this first round for Lowe's. While speed was essential here, both contestants did the best they could in this area.
Lowe's leadership threw in another element that's essential during a crisis. By sharing and enabling compassion at the local leadership level, Lowe's addressed the real human suffering among employees, customers, and competitors caused by the pandemic. Effective leadership requires such empathy to keep everyone motivated, but it's easy to forget when you're in a hurry fighting a massive fire.
Round 2: Is the tech stack scalable and flexible?
Technology plays a critical role in implementing curbside pickup safely and quickly. Nearly all other aspects of our showdown hinge on the scalability and flexibility of the organization’s tech stack.
Battleground: Talent and the cloud
Compared with the year before, online orders designated for store pickup increased over 300% since the first COVID wave back in April. Both Home Depot and Lowe's could facilitate such a spike because they had earlier made billion-dollar investments in technology and started moving their IT infrastructure to the cloud.
Fahim Siddiqui, Home Depot’s Senior Vice President of Information Technology, shared details on their approach to implementing curbside pickup at Home Depot in a recent interview. “All of Home Depot's home-grown apps are built on open source” and connected through a common API. Only when third party vendors offer superior software solutions does Home Depot buy external, such as Workday, SAP, and Salesforce. In most other cases, they build in-house for their unique challenges and business model.
At the start of 2020, Lowe's was still improving "the foundation of Lowes.com by re-platforming the entire site to Google Cloud from a decade-old platform," according to Lowe's CEO Marvin Ellision. Home Depot had this move completed at the start of the pandemic and uses a "hybrid cloud" consisting of Google Cloud, Azure, and a private cloud in their data centers.
Having the right tech stack is not just about machines and software, though. Without talent, there will be no innovation. While Home Depot recently hired 2,000 new engineers, Lowe's sets itself up for future success by building a new global technology center in Charlotte. This location will house 2,000 technology professionals and is due to open in late 2021.
Verdict: curbside pickup Home Depot wins with early cloud migration
With an early move to the cloud, Home Depot easily wins this round. Their technology stack was ready for scale and flexibility before the pandemic hit, while Lowe's was still in the process of moving their platform to the cloud. Your tech stack is only as strong as your talent, though, and Lowe's investment in a dedicated technology center is an excellent move for their prospects in this area.
Round 3: Does the customer get accurate information?
The customer needs to receive accurate information and instructions at every stage of the buying journey to ensure a safe curbside pickup process.
It starts with basics, like indicating online which stores offer curbside pickup and providing clear directions onsite as to where the curbside pickup area is. But customers also need real-time data on the availability of pickup time slots and notifications when goods are ready at the store.
Battleground: Online and offline user experience (UX)
Home Depot took a guerrilla approach to the on-premise "user experience." While there was no curbside pickup at Home Depot before the pandemic at all, they were able to have a first solution ready in a matter of hours.
According to CIO Carrey, they started with a "manual process where a customer would arrive at the store after ordering online, inform an associate of their order number, and then the associate would get the order and bring it out." They even had handmade signs to direct people to the pickup location.
In Home Depot’s next iteration, customers had to text or call when they arrived at the store. Eventually, they transitioned to a process fully embedded in their app using geofencing so that most of the communication and data exchange happened automatically. Home Depot was able to do this quickly by leveraging solutions like DataStax built on Apache Cassandra.
Lowe's initially had hiccups in this area, as it wasn't clear to customers which locations offered curbside pickup. Lowe's did already have special arrangements for the pro segment in place at the start of the year, as they integrated LowesForPros.com with software platforms for specific verticals, like the real estate sector. This integration allows property managers to make a digital purchase at Lowe's directly from their company's procurement system and schedule it for pickup at one of Lowe's 1,700 stores. This example shows you can also make improvements outside of your own platform to serve people where they already are.
For most customers, the regular website and app experience is still crucial. Here we turn to the Danish Baymard Institute, an independent UX research organization active since 2008. Based on website and app audits on 705 design elements done earlier this year, they rank the Home Depot (61.6 points), which is well ahead of Lowe's (41.6 points). Moreover, the detailed charts show Home Depot's UX performance improving, while Lowe's is sliding backward compared to previous years.
Verdict: Home Depot's digital experience wins
Both retailers started scrappy and experienced hiccups early on in the pandemic. Still, they managed to improve their curbside pickup services quickly in the months that followed. Lowe's approach to integrating with other platforms for their pro customers also deserves a special mention.
Ultimately, the UX of a consumer-facing e-commerce platform carries the day, and here, Home Depot is ahead and building out that lead.
Round 4: Do the order logistics work?
The logistical challenge starts even before a customer confirms their order online. The retailers need to ensure the availability of inventory in their warehouses. After order confirmation, those materials have to go to the right stores as soon as possible. Staff members then need to pick and prepare the goods and stage them for loading for curbside pickup.
The battleground: Supply chain technology
As we've already seen in the tech stack round we discussed above, Home Depot's curbside pickup has a clear head start here. Order logistics heavily depend on technology to automate planning, route optimization, and inventory management.
Home Depot has been building such capabilities for many years. First, with its Project Sync, then with the One Home Depot architecture that "connects logistics, delivery, supply chain, customers, digital channels, and associates." Lowe's increased its investment in these areas only in 2018 when then incoming-CEO Marvin Ellison admitted being "significantly behind in our supply chain strategy."
Lowe's is making impressive progress as part of its five-year push to address weaknesses like out-of-stock problems. The chain is aggressively expanding its number of distribution centers. They're also moving away from an inefficient store-based delivery model to serving delivery orders directly from warehouses. This change "takes the complexity out of the store," according to Don Frieson, EVP of Supply Chain at Lowe's.
These initiatives seem to be paying off. Frieson recently said if the pandemic happened last year, he's "not sure Lowe's could have withstood the increase in demand and service requirements." But they've been able to meet the spike in demand because of their recent investments in their supply chain technology, for example, with improvements in their replenishment algorithms.
Still, David Denton, CFO at Lowe's, admitted in August 2020 that they "have a 24 to 36 month roadmap to get our supply chain where we want it to be."
Verdict: curbside pickup Home Depot ahead, but Lowe's catching up
While the actual order logistics are mostly invisible to the customer, they affect many areas of the customer experience, from the availability of items on the website to timely delivery at the curbside.
At the onset of the pandemic, Home Depot was better positioned than Lowe's to handle the quick changes needed in order logistics because of its early investments in technology. But while Home Depot is still ahead, Lowe's is learning and catching up. We wouldn't be surprised if Lowe's can deliver (and perhaps surpass!) Home Depot's curbside pickup in the coming years.
Round 5: Is the pickup experience smooth and safe?
All previous efforts culminate in the final round: a smooth and safe curbside pickup experience based on contactless-execution between the customer and the team on the ground. This challenge is part management — procedures, staffing, training — and part technology, enabling employees to forecast the flow of arriving, loading, and departing customers.
The battleground: Local, in-store performance
At the actual curbside, stakes are high: One order arriving late causes a jam in the pickup area, creating a negative experience not just for that customer but for everyone else in line. Congestion also creates social distancing safety risks, increasing the chances people leave their cars, wander around, and enter the store.
Home Depot has a unique approach to alleviate congestion. The chain is creating so-called flatbed delivery centers, where pro customers can pull up with their trucks. This professional segment makes up 4% of their customers, but they account for 45% of total sales. With these flatbed locations, professionals have a great pickup experience, while the new centers also reduce congestion at the stores. As such, they also improve the Home Depot’s curbside experience for the casual customer.
Ultimately, what matters most is the actual experience at the curbside during pickup. From studying a wide variety of online reviews, combined with our own experiences, three things are apparent and apply to both chains:
- They scrambled to put curbside pickup in place as the pandemic hit, relying on measures such as handmade signs and in-person, unsafe communication between staff and customers
- They had a somewhat rocky start (not strange considering the previous point) but have been improving throughout 2020
- The curbside pickup experience varies widely per store.
This last point is crucial and highlights a fundamental weakness for curbside pickup at Home Depot and Lowe's. No matter how good your strategy and technical infrastructure, an individual customer's ultimate experience comes down to how well your team on the ground executes the plan and follows safety precautions.
Verdict: A tie based on mixed location performance
As we read through the various online reviews from both customers and employees, it's apparent that the implementation of curbside pickup and the subsequent customer experience is all over the map. For example, some stores have no team members dedicated to curbside pickup, while others do. While there seem to be slightly fewer negative reviews of curbside pickup at Home Depot recently, it's too close to call, and we declare this round a tie.
Winning the curbside pickup retail showdown: Tech scalability and local execution
As retail consultant Shelley Kohan said in a recent interview about getting the curbside pickup experience right: "There needs to be inventory visibility. There needs to be a space set aside for curbside pickup. There's Logistics. There's training. There's coordination of picking and getting the product ready. So, there's a lot that goes on behind the scenes to make that curbside pickup very seamless."
The agility, scalability, and maturity of Home Depot's tech platform put it ahead of Lowe's in most of these areas, and curbside pickup at Home Depot wins this showdown with its superior tech stack.
As we've seen, though, Lowe's is catching up by investing heavily in its technology. Both organizations also need to keep a close eye on the quality of local, store-level implementation.
Five lessons from this curbside pickup showdown
Here are five essential lessons from the showdown to help you implement curbside pickup in your own business:
- Make sure your technical architecture is agile and can scale fast. Consider open source solutions, a full cloud migration, and a common API to achieve this.
- Determine which elements of your tech platform are essential to do in-house and which can be outsourced (=speed).
- Pay special attention to real-time visibility on order status and arrival times, a crucial bottleneck.
- Stress-test on exponential volume increase: where in the process would things break down?
- Make sure you have training, dedicated team members, and clear procedures in place for curbside pickup.
To make it easier to carry these lessons forward into your own curbside experience design, we’ve condensed all the best information from this showdown into a free essential curbside pickup tech checklist here.
If you're a technology or business leader investing in frictionless digital experiences tied to physical locations, contact our sales team. We’d love to hear from you.