- Lowe’s is courting younger shoppers (Gen Z, millennials, parents) with Kids Club, loyalty perks, creator marketing, exclusive drops, and a faster-growing online marketplace.
- It is also pushing deeper into Pro with the Artisan Design Group acquisition, but its revenue mix remains more DIY-heavy than Home Depot’s.
- Housing affordability is a major headwind as first-time buyers shrink, the median first-time buyer age rises, and high rates and prices dampen big-ticket renovation demand.
- Analysts have turned more bullish on the strategy, though results hinge on a housing rebound, consumer spending, and margin risks from marketplace expansion.
Read More
Lowe’s is executing a dual-pronged strategy that attempts to both expand its immediate addressable market (younger, non-homeowners) and shore up its long-term revenue base (Pro contractors). On one side, it has relaunched its Kids Club, deployed loyalty mechanics that reward everyday purchases, partnered with creators, released exclusive-impulse “drops,” and fast-tracked its marketplace via a partnership with Mirakl. These moves are designed to capture consumer attention and drive frequency from demographics typically less inclined toward but positively influenced by DIY and decors.
On the Pro front, Lowe’s made major elbows in 2025 by acquiring Artisan Design Group (ADG), which added ~$1.8B revenue in fiscal 2024 and allowed Lowe’s to serve the installation and finish trades. ADG increases Lowe’s Pro exposure (from ~30% of revenue), but Home Depot still leads with a roughly 50/50 split between Pro and DIY revenue—giving it greater insulation from weakening discretionary DIY demand.
These shifts at Lowe’s come against a backdrop of constrained housing market fundamentals. First-time buyer share is at its lowest on record (~21%), with the median age now 40—up sharply from past years. Mortgage rates hover around 6–7%, and median home prices (existing homes) are over $400,000, making entry-level homes progressively harder to afford. Consequently, projects related to major renovations or new home construction have lagged, while categories tied to repair, maintenance, and smaller discretionary purchases (decor, tools) show more resilience.
Institutional response to Lowe’s strategy is cautiously optimistic. On January 13, 2026, Gordon Haskett upgraded Lowe’s from “Hold” to “Buy” with a target price of $325; previously, Barclays had raised its rating to “Overweight” at $285. At the same time, peer Home Depot’s recent earnings suggest stabilization in same-store sales and improvement in Pro comparable sales, though overall margin pressures continue.
Strategic implications: Lowe’s pivot toward younger demographics could succeed in rebuilding customer lifetime value, especially if these consumers eventually become homeowners or frequent Pro customers. But this strategy adds complexity—balancing price points, assortment, fulfillment, and merchandising mix. Meanwhile, if macro conditions don’t improve—mortgage rates falling, inventory rising, consumer incomes keeping pace with housing costs—the investments may not deliver near-term growth. Lowe’s Pro acquisitions and marketplace expansion are necessary but may underdeliver if discretionary spending remains constrained.
Open questions remain: What will be the inventory and housing supply trajectory in 2025–2026? How quickly will younger, non-homeowner consumers be able to convert to homeowners? Will mortgage rates retreat, and by how much, to enable markets to recover meaningfully? And how much margin dilution might Lowe’s incur from introducing more lower-margin marketplace and impulse merchandise? Home Depot’s execution in Pro further raises competitive pressure.
Supporting Notes
- Lowe’s relaunched its Kids Club and began giving out lollipops to draw in young parents; it’s expanding the loyalty program and releasing products that resonate on social media with exclusive drops.
- Soon after its December 2024 launch, Lowe’s Marketplace partnered with Mirakl to broaden its assortment across furniture, décor, tools, etc., with marketplace seller products returned in-store and loyalty points earned.
- In 2025, Lowe’s acquired Artisan Design Group for $1.33B in cash; ADG had $1.8B in 2024 revenue. Lowe’s Pro business accounts for ~30% of its sales, compared to roughly 50% for Home Depot.
- The share of first-time homebuyers dropped to ~21%, the lowest since NAR began tracking; median age for first-timers rose to 40 in 2025 from 38 in 2024. Mortgage rates approximate ~6.17% and home prices for existing homes hover above $415,000.
- Gordon Haskett upgraded Lowe’s to a Buy rating in Jan 2026 with a $325 price target; Barclays had earlier upgraded it to Overweight with a $285 target.
- Home Depot reported total sales growth of 4.9% in Q2 fiscal 2025; comparable U.S. sales rose ~1.4% while Pro customer comps outperformed DIY; Hybrids like GMS and SRS Distribution bolstered sales.