Lowe's is planning to invest between $500 million and $550 million in capital per year through 2021 to overhaul its technology, according to CIO Seemantini Godbole, during a conference call with analysts and investors.
After one month on the job, Lowe's CIO concluded the company's technology is "well behind leading retailers in terms of strategy, architecture, process maturity and capabilities." The back office system is the only one that "really measures up." Lowe's supply chain functions were made in the 1990s and its pricing and digital systems were developed in the early 2000s, according to Godbole.
Lowe's has "historically underinvested in talent and technology" and inefficiently tried to customize off-the-shelf software, she said. Godbole intends to focus on three things in 2019, including developing an architecture capable of supporting omnichannel goals, building an operating channel equipped for faster development, and establish a talented tech team.
Lowe's has not-so-quietly reconstructed its executive leadership. The one thing these newcomers have in common is their experience in retail and technology to help improve Lowe's omnichannel capabilities.
The home improvement company's mission "is not fancy or overly ambitious," CEO Marvin Ellison said on the call, but improving operational efficiency and omnichannel experiences are top priorities.
The company wants to move past the assumption that omnichannel simply means a nice website or app. It's about companies cultivating a single-view of everything from product inventory to customers.
Having architecture to support this kind of demand will also enhance scalability and speed, according to Godbole. The company will be able to repurpose components and use them "like LEGO blocks" to promote more employee and customer-facing capabilities.
The company's leadership did not shy away from its technological ambitions and the important role technology plays in Lowe's relevancy and longevity. "We are running Lowe's differently," said Ellison, who came on board as CEO in July.
To successfully implement a technology-first business strategy, the company is working to overhaul its leadership, focusing on candidates with a background in retail and tech. In July, the company announced the departures of its chief operating officer, chief customer officer, chief operating officer and chief financial officer.
Lowe's has seen five CIOs come and go in the last eight years, which has resulted in "inconsistent strategy and low accountability," said Godbole.
But Godbole is equipped with a combination CIOs wish for: a team with proven understanding of tech and a willingness to heavily invest in it.
"This new leadership team has what I call 'been there, done it' skill set," said Ellison.