Marvin Ellison, President & CEO, Lowe's

Marvin Ellison, CEO of Lowe's, shares insights on leadership and retail strategy during an interview with Sarah Alter, CEO of the Network of Executive Women. Ellison emphasizes the importance of listening, understanding company culture, and serving diverse customer segments, including do-it-yourselfers, do-it-for-me customers, and professional contractors. He highlights the necessity of an omnichannel approach to meet customer needs and discusses creating a winning culture through clarity of mission and accountability. Ellison also stresses the value of authenticity, sharing his personal journey from being the only minority in a corporate setting to embracing his unique identity to stand out.

• Marvin Ellison emphasizes the importance of listening over speaking when joining a new organization.
• He prioritizes understanding the company culture and identifying the root causes of issues rather than just addressing symptoms.
• His approach includes engaging directly with employees and customers to gain insights and foster connections.

"God gave you two ears and one mouth for a reason: listen more than you talk."

• This quote underscores the importance of listening as a fundamental leadership strategy, emphasizing that understanding comes from hearing others' perspectives.

"My first day was July 2nd, and there were banners up at the corporate office and digital signs welcoming me to the company. The problem is on July 2nd, I didn't show up. I went to work in a store at the contractor's desk because I wanted to understand why we were not serving that customer segment better."

• Ellison's decision to work directly in stores rather than the corporate office highlights his hands-on approach to understanding operational challenges and customer needs.

"I was having lunch with hourly employees, I was having breakfast with contractors, I was talking to customers, and that's my natural routine."

• This illustrates Ellison's commitment to engaging with various stakeholders to gather diverse insights and build relationships.

• Lowe's targets three distinct customer segments within the home improvement sector: do-it-yourself (DIY) customers, do-it-for-me (DIFM) customers, and professional contractors.
• DIY customers prefer hands-on projects and seek guidance through workshops and product interactions.
• DIFM customers are time-constrained and prefer hiring services for home improvement tasks.

"Home improvement is a little different because typically you can ask a question, who's your core customer, and most retail businesses can be very specific. Home improvement you really have three customer segments you're trying to solve in the same store environment in the same digital platform."

• This quote highlights the complexity of catering to diverse customer needs within the home improvement industry, requiring a multifaceted approach.

"You have what we call do-it-yourself customers... they want to touch it, fill it, and do it themselves."

• This describes the DIY segment's preference for tactile experiences and learning opportunities, emphasizing the need for interactive store environments.

"The other segment is what we call it do it for me customers that are time-starved."

• This identifies the DIFM segment, focusing on convenience and service offerings to accommodate their busy lifestyles.

• Lowe's serves three distinct customer segments: do-it-yourself (DIY) customers, project-based customers who prefer hiring professionals, and professional contractors.
• Each segment has unique needs and expectations, requiring tailored approaches to service and product offerings.
• The DIY customers are typically looking for guidance on product selection, while professional contractors prioritize efficient fulfillment and competitive pricing.

"The do-it-yourself customer really makes it all the way down to the pro side with lumber or concrete and building material. The pro typically is not going to make its way down on the do-it-yourself side."

• DIY customers overlap with professional needs in certain categories like building materials, but professionals usually have distinct needs that do not overlap with DIY.

"The pro spends five times more annually than the typical do-it-yourself customer."

• Professional contractors represent a significant opportunity for growth due to their higher spending patterns compared to DIY customers.

• Lowe's employs different service teams and models to cater to the distinct needs of each customer segment.
• DIY customers require assistance in product selection, while professionals need efficient fulfillment and accurate pricing.

"Serving a pro customer from a customer service standpoint is uniquely different from serving a do-it-yourself customer."

• The service approach must be tailored to each customer type to meet their specific expectations and enhance satisfaction.

"If you try to serve both customers the same, then you're going to not deliver the level of service that they expect."

• Attempting a one-size-fits-all service model would fail to meet the distinct needs of each customer segment.

• Lowe's competes against large chain retailers, local hardware stores, and online platforms like Amazon.
• Despite the competition, Lowe's identifies a substantial market opportunity in the fragmented home improvement sector.

"We have a nine hundred billion dollar addressable market place, and so we're at 71 billion dollar company."

• The vast market potential indicates significant opportunities for growth and expansion within the sector.

• Lowe's embraces an omni-channel retail strategy, integrating online and in-store experiences to meet customer preferences.
• A significant portion of online transactions is fulfilled through physical stores, highlighting the synergy between digital and brick-and-mortar operations.

"We are an omni-channel company doing roughly four billion dollars in online sales, and 70% of those sales are either picked up or fulfilled from a store."

• The omni-channel approach allows Lowe's to leverage its physical presence while catering to the convenience of online shopping.

"The objective is to serve customers the way a customer desires because maybe the customer wants to buy it online and then pick it up within an hour."

• The flexibility in purchasing options caters to diverse customer needs, enhancing overall customer satisfaction and loyalty.

• The primary focus is on understanding customer needs and leveraging various platforms (brick-and-mortar, distribution centers, and e-commerce) to serve customers seamlessly.
• Retailers that fail to deliver a seamless experience may struggle to find sustainable growth.
• There is a significant opportunity for upselling when customers come to pick up their online orders in-store.

"Almost 30 percent of the time a customer comes in to pick up an order, they buy something else."

• This quote highlights the potential for additional sales when customers visit physical stores to pick up online purchases.

"The key is how do you seamlessly connect those things so you take the friction away from the customer and you can serve them in a way that drives little effort by them and fulfills their expectations."

• Emphasizes the importance of creating a frictionless experience for customers to enhance satisfaction and meet their expectations.

• A balance between digital and physical footprints is crucial for retail success.
• The integration of digital transactions with physical store pickups is a significant opportunity for improvement.

"Even in our current state, 70% of those digital transactions are fulfilled to pick up in a store. That tells you there's enormous opportunity to get a lot better."

• Indicates that a large portion of digital transactions are completed in-store, suggesting room for enhanced integration and efficiency.

• Success is driven by strategic operations and a strong commitment to organizational culture.
• Leaders must create an environment where the team believes they can win and have clarity of purpose.

"You want to create an environment where the team believes they can win."

• Highlights the necessity of fostering a winning mindset within the organization to drive success.

"Without a common purpose and clarity of mission... you have a lot of people working very hard and I call us equivalent of running on a treadmill."

• Stresses the importance of alignment and clarity in mission and goals to ensure that efforts are directed effectively.

• Clear understanding of the mission, how to achieve it, and what is being measured is essential for resetting culture.
• Rewarding great work and maintaining accountability are key to fostering a productive work environment.

"You need to make sure there's a clear understanding of how to achieve the mission and what is being measured."

• Underlines the need for clear communication of objectives and metrics to align the team's efforts.

"There's nothing worse for a hard-working employee than to see someone sitting next to them not working hard but getting equal consideration."

• Points to the importance of accountability and fair recognition in maintaining employee morale and motivation.

• Establishing an emotional connection between leaders and frontline employees is crucial.
• Open communication channels, such as publishing the leader's email, foster direct interaction and engagement.

"One of the first things I did was published my email address to the company and I answer every employee email that comes in personally."

• Demonstrates a commitment to open communication and personal engagement with employees, enhancing organizational culture.

• The speaker emphasizes the importance of communication and culture in an organization.
• Weekly video podcasts are used to connect with employees globally, sharing updates and reinforcing key company messages.
• Clarity in mission and strategic pillars is crucial for alignment and emotional connection within the team.

"Every Friday I do a video podcast to the whole organization even to our boys in India and around the world and I just take about five minutes and I just kind of talk about my week, talk about what's in the news, I talk about what's happening around the company, and I reinforce some key messages that we want to reinforce as a company but I want them to hear it directly from me."

• The speaker uses weekly video podcasts to maintain communication and reinforce company culture and key messages directly from leadership.

"You can't underestimate your point about the clarity of mission."

• Clarity of mission is vital for organizational alignment and ensuring everyone is working towards the same goals.

• The speaker shares personal experiences of being the only one of their kind in a professional setting.
• Initially attempted to blend in with colleagues but found it ineffective.
• Realized the importance of authenticity and leveraging uniqueness as strengths.

"I was struck by is I was really different but it was not only a difference in my ethnicity but just style and in just how I dressed and the things that I did in my spare time."

• The speaker felt different in various aspects, including ethnicity and personal style, highlighting the challenges of being the only one in a workplace.

"My first thought was well I need to convert because I need to fit in because obviously the way that I'm gonna be successful is I need to fit in."

• Initially believed that blending in was necessary for success, reflecting a common misconception in diverse workplaces.

"Why don't you just relax and be yourself?"

• A reminder from family to embrace authenticity, which became a turning point in the speaker's approach to professional identity.

"The real answer was standing out."

• Emphasizes that being authentic and standing out is more valuable than blending in and becoming a commodity.

• Authenticity leads to greater interest and engagement from others.
• Being unique is a strength that can be leveraged for success.
• Encourages others in similar positions to embrace their authentic selves.

"I came to the conclusion look I'm different and I'm going to leverage that in other words I'm gonna be my most authentic self."

• Decided to embrace individuality and authenticity, leading to greater personal and professional fulfillment.

"People were more interested in what I had to say because I was less of a commodity when I blending in."

• Authenticity led to increased interest and engagement from colleagues, proving the value of standing out.

"I'll say that lesson to every female executive, every executive that feels like you're the only one that is a powerful place to be just be the best you be your most authentic self and embrace it."

• Encourages others who feel like the only one in their environment to embrace their uniqueness as a strength.

• The speaker's journey from a security guard to a Fortune 40 CEO is highlighted.
• Demonstrates the potential for growth and success regardless of starting position.

"He started his career as a security guard and now he's a fortune 40 CEO."

• Highlights the speaker's impressive career progression, serving as an inspiration for others.