Lowe’s to meet omnichannel demand with supply chain transformation

Lowe’s Cos. Inc. is launching a major construction program to support the need for fast fulfillment across channels.

Over the next 18 months, the company plans to open 50 cross-dock delivery terminals, seven bulk distribution centers, and four e-commerce fulfillment centers. This includes 20 cross-dock terminals and one West Coast e-commerce fulfillment center in the second half of fiscal 2020.

“It’s all about our customers,” Don Frieson, Lowe’s executive VP of supply chain, said in an interview with Chain Store Age. “We have an opportunity in the omnichannel environment to serve customers the way they want to be served.”

Lowe’s will open the West Coast e-commerce fulfillment center in Mira Loma, Calif., in October 2020, with the goal of offering faster direct-to-consumer shipping options. This direct fulfillment center is designed to improve two-day delivery options to reach nearly 100% of customers nationwide. This is the company's second direct fulfillment center; its first was opened in 2018 in Nashville, Tenn.

“We want to offer flexible delivery options, especially for bulky and highly deliverable items like washers, dryers, grills and patio furniture, whether in store or online,” said Frieson. “To deliver from stores, we want to take the capacity out of the store. This increases sales by allowing store associates to focus on the customer instead of whether they can deliver the product.”

Frieson said that by removing the need to deliver inventory to stores and instead delivering from the warehouse to a cross-dock facility to a fulfillment center, Lowe’s can remove two steps from the process and make delivery much more efficient.

“In many cases, if the customer comes in the store and makes a purchase by 4 p.m., we can make the delivery the next day,” he stated.

These efforts build on the steps taken over the past 18 months to expand the company's supply chain capacity, including the opening of more than 13 different facilities across the U.S. in markets such as Chicago, Orlando, Riverside, California, and Columbus, Ohio. 

Lowe’s has been working to re-energize its business, including enhancing its digital operations, under the direction of CEO Marvin Ellison. In a statement, Ellison said as Lowe’s pivoted to serve increased demand during the first quarter of 2020, its online sales increased 80%.