Lowe’s kicks off NFL deal in the biggest game of all
Home Depot may be the biggest name in home improvement, but Lowe’s is hoping to change that by partnering with the biggest name in professional sports. With Super Bowl LIII on the way, Lowe’s is looking to turn National Football League fans into customers.
Lowe’s has inked a new deal that sets up the home improvement chain to advertise in conjunction with the NFL during both the football season and the off-season, according to the Charlotte Observer. During this year’s Super Bowl, the chain is planning co-branded billboards in the Atlanta area — the city where the event is being held (and, coincidentally, where Lowe’s main rival, Home Depot, is headquartered).
The deal comes about a year after Lowe’s ended its long-time sponsorship relationship with NASCAR racer Jimmie Johnson. Lowe’s and the NFL are also looking ahead to next year’s event. The NFL has announced the chain as the presenting sponsor for its interactive park, the Super Bowl Experience, which will debut in Miami at the 2020 Super Bowl. Lowe’s hopes that the new relationship will get its name in front of more home improvement professionals, such as contractors, which are a more lucrative audience than DIYers.
Betting on a bigger sport than NASCAR could work in Lowe’s favor, but while football remains the most popular sport in the U.S., some like Forbes Contributor Jonathan Berr anticipate a further drop in viewership in the 2018-2019 season. Mr. Berr cites negative publicity regarding issues like concussions as well as a decline in overall traditional viewership (albeit relative to its massive popularity).
For Lowe’s part, this new promotional relationship is the latest in a series of changes introduced since former J.C. Penney CEO Marvin Ellison took on the same role of the home improvement retailer.
Lowe’s recently introduced a new tagline — “Do It Right For Less” — as part of a rebranding effort. Mr. Ellison closed Orchard Hardware Supply last year and also made some significant changes to Lowe’s organizational structure, including the elimination of some upper-management and c-suite roles.
Discussion Questions
DISCUSSION QUESTIONS: How will Lowe’s sponsorship of the NFL affect the public’s perception of its brand? Will Lowe’s promotional relationship with the NFL help it attract more home improvement professionals as customers?
Poll
BrainTrust
Bob Amster
Principal, Retail Technology Group
Anne Howe
Principal, Anne Howe Associates
I honestly can’t see this making much difference at all. Lowe’s does not have an awareness issue: all of our surveys indicate that it is a well known brand that reaches all the key demographics. The problem is that, across many measures, Home Depot is better and is, therefore, the destination of choice for those undertaking home improvement. Advertising and sponsorship won’t change that – only improvements to the proposition and creating clear points of differentiation from Home Depot will drive trade.
My thoughts exactly Neil – they don’t have an awareness issue, so I’m not sure this makes sense. I also suspect that this “Super Bowl Experience” interactive park isn’t going to be designed to awe contractors and, if it is, it will probably be a big miss for the actual NFL fans. I’m not saying that the NFL/Lowe’s alignment doesn’t make sense – it just doesn’t seem all that newsworthy at the moment.
I couldn’t agree more, Neil. And furthermore, Atlanta is Home Depot’s hometown and although many fans at this years Super Bowl will be traveling in from other cities, the spirit will be Atlanta and Atlanta loves HD! For my 2 cents.
I agree Neil. In some ways I see this as an almost desperate measure to catch up with Home Depot after the failed Orchard venture. Yes, Lowe’s is well known. But Home Depot is a better recognized name when it comes to the customers and their needs. I do find it unusual that the Super Bowl is being played in Atlanta; and that is the home of Home Depot. I would think they would have jumped all over this opportunity to showcase them and the city.
Advertise and they may come. Create a knock-your-socks-off experience in-store and they will come back for relevant solutions and services.
I just dropped into a Lowe’s to look at a refrigerator on a Saturday. There was one guy in the department and he was using a sign-in sheet, take a number style, for who was next. Wouldn’t even answer a quick question. Most of us left. That’s my 2 cents.
The sponsorship is excellent to have, and the exposure with the NFL can’t hurt, but it will always come down to the customer experience. Just advertising and attempting to connect a brand in this case with NFL is a small step to the overall success of a company which will depend on how the customer feels about doing business with them. It’s vital to make sure that Lowe’s meets every customer’s expectations from service, merchandise, and price. The best advertising is word of mouth and when you “wow” your customers, you’ll always have more than enough business because they become your best advocates. It’s one thing to say who you are and what you’re offering, but it’s always more important to deliver.
The audience that Lowe’s will reach through the Super Bowl is almost exactly the audience it wants to reach and with which it wants to resonate. It’s a win/win at a cost of $5 million for 30 seconds.
Lowe’s is undergoing a significant transition and it needs a way to communicate this to existing and prospective shoppers. Taking a key sponsorship position at the Super Bowl, and with the NFL in general, certainly provides Lowe’s with a bullhorn from which it can speak to the market. However, ultimately, brand perception is built on the quality of experiences shoppers have in the stores and online. Aligning Lowe’s to the NFL is a bold move by Lowe’s, but neither the Super Bowl nor the NFL will make Lowe’s better if they don’t deliver in their stores and live up to the brand promise.
This is where I differentiate between awareness and loyalty. This deal with the NFL may indeed build awareness. But for me it will do zero to build loyalty. That takes execution — performance. The right product at the right time with the right expertise to then help me get the job done. That’s not going to happen just because I watch a TV commercial. Ditto for contractors.
This is a great tactic to build brand awareness and signal that Lowe’s has not succumbed to Home Depot. However, brand awareness and sales are very different entities. An NFL affiliation may get more consumers to give them a look, but if they don’t execute superbly, delivering on consumer wants and needs, it will result in nothing more than a very expensive shot in the dark.
I’ve tried to research/buy items on lowes.com and each time I’ve hit a dead end. Bad search and unsatisfactory product selection have given me no reason not to shop their biggest competitor. If I had Marvin Ellison’s job, I’d take the sponsorship money, add to it, and focus that budget on improving customer experience until it clearly exceeds the competition, then I’d think about brand affiliations.
Poor, misguided Lowe’s is marketing a new consumer positioning line “Do It Right For Less” via an OOH campaign in Atlanta to fat cat, corporate Super Bowl attendees paying $3,500 a seat to start. And they report that they are looking to market to B2B contractors to boot. Lots of disconnects in this scenario. From the broadcast side, the Super Bowl offers up great branding opportunities for newcomer disruptors and behemoths looking to make a big impact with mass market consumers. Lowe’s needs to introduce its left hand to its right!
Wait, we’re going to “focus on basics” (Ellison quote) by spending a zillion dollars on Super Bowl ads? Meanwhile, The Home Depot has already focused on basics like ship-to-site, BOPIS, store design improvements, better associate training, better e-commerce and on and on. Money well spent.
They’re better off taking this ad cash and hiring improved staff in my opinion.
If you look at the Wharton study that was done a few years ago, these types of sponsorship deals have a negative ROI. When the USPS sponsored Lance Armstrong, an internal analysis could only show an incremental return of around $600,000 while spending $39 million to get it.
Lowe’s does not have much of a brand awareness issue. What they are trying to show is that they are different, better, and higher quality than Home Depot. I am not sure how this sponsorship is going to do that.
I am sure they will measure it and see the end result. I am not bullish on it. As a consumer, I do see a lot of changes for the better at Lowe’s in a very short period of time.
It matters far more whether Lowe’s uses the advertising opportunities to say something that matters than that they are merely present. Unfortunately, their new tagline doesn’t give me much reason to believe they will – it’s far too close to a “Home Depot 2” tagline.
Neil Saunders is correct – the challenge for Lowe’s isn’t one of awareness. They need to provide reasons for shoppers to go to Lowe’s instead of Home Depot or an Ace, True Value or Do It Best.
And let’s remember that Home Depot’s better numbers right now are because of contractor purchases — there are areas Lowe’s could leverage to do what they need. But I’m not seeing anything yet that suggests they understand what those things are.
Lowe’s needs to pull out all the stops and deliver a full-on immersive integrated experiential campaign, not signs, billboards and TV ads. It’s going to need a huge in-store component to be relevant. This feels like a big stretch for them. Given that I live two miles from HQ, I’d like to see them succeed!
I agree with so many of the other posters that Lowe’s doesn’t have an awareness problem, but a “reason to shop there” problem. Large sponsorships are rarely a game changer for retailers and brands (I’ve managed quite a few and have also exited some as well). It’s great to put your name out there, but the most important thing is how they activate it. I’m not sure that slapping their name on an interactive Super Bowl experience (which is primarily attended by corporate partners) will really do anything.
Co-branded billboards in Atlanta and the interactive “Super Bowl Experience” park are perhaps great visibility for those who are at the game. That seems like a narrow reach to me. That does nothing for me in Chicago or anyone anywhere else. Lowe’s needs to open their eyes and focus on the customer experience and their position in markets — then create a campaign of excellence and emotion that is translated and implemented in all stores and headquarters and to all associates. Then maybe some of their target market will be reached, influenced and won.
During an engagement with Lowe’s during Jimmie Johnson”s reign as NASCAR champion, I inquired about the financial commitments associated with a NASCAR sponsorship. The straight-faced response was, “he better keep winning”. Lowe’s promotional relationship with the NFL will probably cost more but will reach and resonate with their broader target market/audience.
This deal is about reaching a new audience, not about awareness. The NASCAR efforts had been spent. This deal is multi-year with a focus on attracting professionals and contractors.
As a marketing strategy it will revitalize a community in a new way and that always brings more attention. The question is whether it also dilutes the dollars spent, which we won’t know until post 2020.
The NFL ratings will continue to over index any other sport out there, but finding the right customers really does depend on their ad copy more than the medium. Lowe’s is looking for exposure and there’s nothing better than the Super Bowl.
Publicity and awareness could potentially attract new customers to your brand. However, Lowe’s investments and partnership with the NFL will not dramatically change their competitive positioning with Home Depot overnight. The Lowe’s brand name is well recognized, yet they are struggling to keep up with the omnipotence of Home Depot.
Lowe’s differentiation strategy with Home Depot has not been clearly articulated. As we know, when you blatantly or subtly call out your competition, it could lead to short term gains, but also remind consumers about Home Depot.
Lowe’s would be wise to continue to invest in additional in-store and online innovations, that will drive improved customer experience. Listen, learn and adapt to what the customers are telling you.
Even though I direct the comment to Lowe’s, this is more a general comment about anyone spending money on this type of advertising. The goal is awareness. Something in the commercial should compel the consumer to go to the store (either the first time or to return). It is from that point on that the promise, in this case “Do It Right For Less,” is fulfilled. And, the experience must be so good that the customer wants to come back. Without the success of return visits, the promotion cannot be deemed a success. So, the in-store experience must match, if not exceed the hype of the multi-million dollar advertising spend.
It depends on what they say. My reality is that I’ve done one contracting job with Home Depot and one with Lowe’s. The Lowe’s install was done perfectly and I’ve never had an issue with the installation. Home Depot incorrectly billed me, the guy showed up to install my pricey new front door with incorrect tools, and less than two years later, we likely need to purchase another door, because the installation is causing the equipment to fail. Based on my personal experience, the quality of service is higher with Lowe’s. If that’s the core of the message they’re going to build and promote through this sponsorship, then yes, they may drive an awareness shift for installation professionals.
Lowe’s and Home Depot are two very well known retailers. A marketing effort at this scale won’t do much to increase Lowe’s awareness among consumers, and the cost of entry to the Super Bowl for fans is so high I’m not sure many of Lowe’s desired contractors will be in attendance for the Super Bowl Experience. Lowe’s needs to focus on what Home Depot does well, with better customer service, competitive prices, a quality assortment and an in-store experience that gets people coming back. This isn’t it.