Lowe’s, ‘Shark Tank’ star Daymond John launch effort for small businesses
As many small businesses face challenges during the coronavirus pandemic, Lowe’s is giving them a shot to get their products on its store shelves and website.
Lowe’s CEO Marvin Ellison said Tuesday on CNBC’s “Squawk on the Street” that the home improvement retailer is teaming up with Daymond John, a star of ABC’s “Shark Tank,” to mentor entrepreneurs across diverse backgrounds, listen to their pitches and narrow the pool to standouts. The initiative will ultimately culminate in a one-day pitch competition judged by Lowe’s executives and hosted by John.
“Although we’re a big company, we’re fortunate to be classified as an essential business, we understand that the success of our broader macro economy is going to be the small businesses and the ability for small businesses to continue to grow and thrive,” Ellison said. “We understand that Covid-19 has created an incredible strain on the economic viability of many of these small businesses. We are, as a large company, doing our best to help.”
The home improvement retailer has committed $55 million towards small business grants to support minority-owned and women-owned businesses and rural small businesses — many of which have struggled as Covid-19 spread, shuttered stores and created economic uncertainty.
Ellison said Tuesday that the new effort was inspired by the outpouring of interest and great need. He said Lowe’s has gotten over 800,000 applications for the grants since it began the program in May.
“The demand from this program led us to understand that there’s a lot more that we should be doing,” he said. “So we came up with an idea to try to get more products on our shelves and on Lowes.com that originate from diverse entrepreneurs.”
The new initiative is called “Making it… With Lowe’s.” Small businesses can apply for the contest from Sept. 15 through Sept. 25.
In an interview with CNBC, John said the competition differs from “Shark Tank” in a notable way: Lowe’s won’t take a cut of the company like the “sharks” on the TV show do.
He said he expects as many as a million applicants. He said the contest helps small businesses reach a mass market, one of the major hurdles for entrepreneurs as they start out and try to scale.
Lowe’s has been trying to strengthen its relationship with home professionals, such as plumbers, contractors and electricians, and try to win more of their business. About 20% to 25% of its sales come from pros, compared to about 45% at rival Home Depot. Lowe’s launched a loyalty program, added new products geared towards them and began offering a free video tool that allows pros to make virtual home visits during the pandemic. It recently launched a tool rental business, which it plans to expand nationwide.
“We’re going to be committed to serving that really, really important and very influential customer, while making sure that our e-commerce business continues to be something that customers think first about,” he said.
Along with spotlighting small businesses, the pitch competition could help differentiate Lowe’s. It could add a unique assortment of products that customers can’t find at other retailers. The retailer already carries some exclusive brands of power tools and other home improvement items.
Lowe’s has benefited during the pandemic, as Americans work, learn and spend more time at home. Customers have been sprucing up their lawns, replacing appliances and doing DIY projects. That caused second-quarter revenue to jump by 30% and website sales to soar by 135%.
Shares were up about 1% early Tuesday. Its shares are up nearly 38% so far this year.
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”