Lowe’s rides ecommerce wave by expanding its distribution and delivery capacities

In the three months ended July 31, the home-improvement retailer Lowe’s reported a 135% increase in its ecommerce sales compared to the same period a year earlier. And it’s not like ecommerce was stealing business from its nearly 2,000 stores, which reported a 30% quarterly sales gain.

Some of this is COVID-enabled, of course, as homeowners stuck in their houses because of the pandemic are repairing and remodeling with fervor. But since joining the company two years ago, Lowe’s CEO Marvin Ellison has been modernizing and expanding the retailer’s ecommerce business. That effort has included the expansion of Lowe’s warehousing and delivery infrastructure.

The year Ellison came on board, Lowe’s announced a $1.7 billion investment through 2023 to expand its supply-chain network. In the proceeding 18 months, it opened more than 13 different facilities in markets such as Chicago, Orlando, Riverside, Calif., and Columbus, Ohio.

That plan continued last month, when Lowe’s opened a West Coast ecommerce fulfillment center in Mira Loma, Calif., the first of four such centers that the retailer intends to open by the end of next year. Mira Loma—a four-building campus with 2.2 million sf—improves two-day delivery options for 100% of the retailer’s customers across the country. (Lowe’s opened its first ecommerce fulfillment center in Nashville in 2018.) 

Lowe’s has also leased space in an industrial park in Gilbert, Ariz., and 1.2 million sf at the Benaroya Pacific Northwest Regional Logistics Center in Winlock, Wash. The Gilbert lease is for a 101,000-sf crossdock terminal run by a third party that's expected to start shipping early next year. The Winlock will serve as a bulk distribution center that is scheduled to become operable in the fall of 2021 and replenish bulky items like riding mowers, grills and patio furniture to Lowe's crossdock facilities for more than 60 stores in Washington, Alaska, Oregon, Idaho, and Montana.

MORE CROSSDOCK TERMINALS AND WAREHOUSES

Earlier this month, Lowe’s revealed that it would lease 1.1 million square feet for an ecommerce fulfillment center in Shippensburg, Pa., which is expected to start operations next spring. The lease, from Equus Capital Partners, is for 10 years. The building—with 189 docks, 631 trailer spaces, and parking for 250—will speed deliveries to ecommerce customers in the Northeast. In 2019, Lowe’s opened a 1.2-million-sf warehouse in Shippensburg that supports more than 130 of its stores in seven Northeastern states.

Through the end of next year, Lowe’s intends to open 50 cross-dock delivery terminals and four bulk distribution centers. A 92,000-sf crossdock terminal in Greenwood, Ind., will handle bulky items and is expected to start shipping by the end of this year. The retailer announced last week that it would contract with an affiliate of the developer-builder Clayco to construct a $61 million, 1.2-million-sf distribution center on 96 acres in Bessemer, Ala. This facility will warehouse bulk products like appliances and support 112 of Lowe’s stores in the Southeast.

Shipments from this DC are expected to begin in the fall of 2021. It is projected to add 150 jobs to the area. Lowe’s will lease back this DC from Clayco.

The Birmingham (Ala.) Business Alliance reportedly spearheaded this project, which “promotes Bessemer to a national audience as a place where ecommerce and distribution and logistics companies can thrive,” said Jeff Traywick, vice president of economic development at the BBA.

Editor's note: After this story was posted, more details about Lowe's new facilities were added.