Lowe's: Increasing Preprint Ad Effectiveness

Background

Lowe’s Companies, Inc. is the second largest chain of retail home improvement and appliance stores in the world. Founded in 1946, Lowe’s now employs over 160,000 individuals in over 1,700 stores across North America.

Lowe’s wanted to increase in-store sales by reconfiguring printed advertisements and reducing the associated costs where possible. Nearly every retailer employs some form of printed advertising to increase brand awareness and sales. However, most do not have data to evaluate its effectiveness. Lowe’s partnered with QualPro to test and identify the most effective approach to developing preprint advertising.

Approach

After analyzing Lowe’s process for print advertising, QualPro consultants helped assemble a team consisting of Lowe’s top management, local workforce personnel, and ad agencies. Together, the team brainstormed a large list of potential improvement ideas to test using the MVT® Process. Our consultants helped the team narrow the list to 21 ideas that were practical, fast, and cost-free. Some of these ideas included color schemes, celebrity endorsements, and paper type.

QualPro’s consultants designed experiments for the team to test the ideas. A screening experiment revealed that four of the ideas had a significant impact and were worthy of further exploration. These ideas were related to product mix, sports sponsorship logos, refund policy promotion, and direct mail. Surprisingly, ideas such as paper type and celebrity endorsements had no significant impact. A refining experiment confirmed the effects of the four ideas and revealed the precise strength of their influence.

In accordance with our commitment to driving continuous improvement, our consultants worked closely with Lowe’s personnel to guide the changes and motivate project team members to exceed goals.

Results

After identifying the most impactful combinations of marketing strategies, QualPro consultants recommended actions to optimize Lowe’s print advertising and increase sales. These actions reduced advertising costs while simultaneously increasing the effectiveness of the print ads. After implementing QualPro’s recommendations, Lowe’s reduced its advertising expenses by $50 million.