Lowe’s Set to Tackle Rivals On Multicultural Front

Lowe’s Cos.’ search for a multicultural agency is part of an aggressive expansion and what appears to be a bid to become more competitive against not only direct rival Home Depot but also Wal-Mart.

“Hispanics represent a major market for Wal-Mart, and [Wal-mart’s] got Lowe’s and Home Depot squarely in their cross-hairs,” noted Sean Javier Martin, a principal consultant in Hispanic marketing at The Zyman Group in Atlanta.

The home-center chain, which earlier this month sent out RFPs to about 50 ethnic and multicultural specialty shops, said it wants to target minorities as part of an expansion plan that will add one new store every three days. Lowe’s now operates 875 stores.

Lowe’s spruced up its stores in the mid-1990s in an effort to attract more women. But the No. 2 home center, with 2002 sales of $22 million compared with Home Depot’s $58 million, has not focused on Hispanic marketing, unlike its competitors. Home Depot and Wal-Mart each spent an estimated $17 million on that target last year, according to Hispanic Business.

The new agency’s objectives will be to “provide numerous creative approaches and campaigns” that are “strategically aligned” with the general-market work from Interpublic Group’s McCann-Erickson in New York, according to the RFP. Ads will target do-it-yourselfers but also must “ensure that minority- and female-owned vendors are made aware of Lowe’s opportunities.”

McCann’s work, which carries the tagline “Improving home improvement,” stresses service and stores that are brighter and spiffier than Home Depot’s.

A Lowe’s rep said “anyone and everyone with a specialty in this area got an RFP” but declined further comment. Lowe’s multicultural-advertising budget is not specified in the RFP. Previous multicultural efforts have been limited to projects handled by several shops. The Vidal Partnership in New York, for example, helped launch stores in Los Angeles in 1999.

TZG’s Martin said Lowe’s business-to-business strategy targeting Hispanics is all-important. “The contractor equation is huge and heavily skewed to Hispanics,” he said. “That’s a straight labor force dynamic, especially on residential and commercial building. That fact hasn’t escaped Lowe’s or Home Depot.”

While Lowe’s is looking at teams of Hispanic, African American and Asian specialists, one source said the client is adamant about having a single shop oversee all of the partners.”It’s not what I consider a creative piece of business,” said the source. “They want a one-stop, one-size-fits-all.”

Finalists, expected to be selected early next month, will get four weeks to prepare a project that requires research, a marketing and advertising plan with sample creative development, and media planning recommendations. Each finalists will also be asked to provide evidence that its campaign will test well with the target.

The chain’s multicultural search is its second significant marketing initiative this year. In August, Lowe’s abandoned its second-year sponsorship of TLC’s Trading Spaces for a show of its own, House Rules, which debuted this fall on TBS with Lowe’s logo products and stores featured prominently.