Atlanta, GA, Aug. 18--Lowe's Cos. and Home Depot want to bring their battle for home improvement supremacy into your house or condo according to the Austin American Statesman.
Call it "Install Wars," with big bucks at stake.
The newspaper reported that the archrivals are seeking to expand the amount of business they get from customers willing to pay someone to install wall-to-wall carpet, floors, roofing, kitchen cabinets and other home improvement products.
Home Depot, which began pushing its at-home services nearly two years ago, has a comfortable cushion in installation sales. It typically arranges installation for its customers by third-party professionals.
"We see at-home services and the service sector as a tremendous opportunity to continue to grow our penetration and our sales using the platform we have in place," said Bob Nardelli, chairman, chief executive and president of Home Depot.
But it's Lowe's that plans to make a splash as it rolls out a new installation sales model at locations across the country. The new system will enhance the services it offers and improve customer experiences, said Bob Tillman, chairman and chief executive of Lowe's.
Most important, he said, the new installation sales model will allow Lowe's to capitalize on the industry's "explosive growth."
Citing competitive reasons, Tillman would not divulge details about the new installation sales model or how it would appear to customers--whether it involves kiosks or displays in stores.
He did, however, say the model would use infrastructure and technology to provide customers with consistent support and communication throughout the installation process.
Lowe's aggressive play comes as Home Depot itself is counting on more revenue from installation services. Executives from both companies touted their installation services programs during recent meetings with Wall Street analysts.
The $32 billion installation services market is becoming more popular, even among the do-it-yourself set, according to Home Depot and Lowe's.
The industry has blossomed as more customers decide they'd rather pay someone to do installation work for them.
"This business is a perfect fit for the changing demographics in our country," said Carol Tome, Home Depot's chief financial officer. "We're going after the do-it-for-me, or the delegator, segment."
Home Depot does 2.2 million installations a year, or 10,000 each weekday, Tome said. In 2002, net service revenue was $2 billion.
Lowe's, which had $1.1 billion in installation sales in 2002, is counting on similar success, Tillman said.
"Our goal is to double this business by the end of 2005," he said.
Lowe's is counting on the new installation sales model, which is being tested in 128 stores, to produce.
The company hired high-paid consultants including McKinsey & Co. to create the new program. It took 18 months to come up with it, Tillman said.
"We're not tweaking a model," he said. "We started all over."
