What Are Lowe's Competitive Advantages?

Lowe's competitive advantage refers to the factors that place the company ahead of its competition in the eyes of the marketplace. Competitive advantages can range from greater value for customers to great service and higher prices. Lowe's primary strategy for gaining advantages on its rival focuses on making stores more attractive to nontraditional shoppers who typically avoid home improvement centers. The company also has a retail strategy designed to attract women.

On average, Lowe's has larger stores and garden centers (113,000 and 32,000 square feet) compared to its main chain store rival Home Depot (105,000 and 32,000 square feet), according to each company's annual report. Lowe's experiments with a layout in one part of the country, and if it proves successful, implements the configuration in other stores. Most stores have the same layout, which makes it comfortable shopping at Lowe's regardless of the location.

Lowe's wider aisles allow easier maneuvering of shopping carts and help staff when it comes to storage and material handling. The store utilizes more signs and has better lighting than it competitors, which according to the annual report, includes other home improvement warehouse stores, lumberyards, and traditional hardware, plumbing, electrical and home supply retailers.

Compared to its rivals, the typical Lowe's store stocks a larger (40,000 items) and a more diverse selection of home decorating products, including lamps, designer towel racks, window treatments and designer towels, than found in Home Depot stores (30,000 to 40,000 products). Lowe's states in its 2011 annual filing statement that the company's focus on private brands, exclusive to the company, helps it stand out from the competition.

Lowe's also makes product data available to vendors, which enable suppliers to determine what items sell and restock the items quickly. This approach gives Lowe's an advantage over smaller competitors.

The store avoids the pallet drop and dump bin strategy common with many of its competitors. This approach places bins and pallets stock with products that management hopes to move quickly in the middle or at the end of aisles. Lowe's uses a process called “planograms” to determine where to position items and the appropriate level for all products in its inventory. Lowe's strategy calls for the placement of the most important product for a project at eye level. In another effort to attract to female customers, Lowe's sets up products in realistic displays to make items more appealing.

Customer service at Lowe's stores starts with the hiring of a higher percentage of full-time employees -- 69 percent to 80 percent compared to Home Depot's 59 percent. Full-time personnel tend to demonstrate more knowledge and understanding of the products they sell. The company has a policy that states it will open another register when a line has more than three customers at any one time. Red buttons placed in every aisle summon customer service assistance. Tracking merchandising and promotion campaigns and accumulating data on customer purchases help Lowe's target customers.