Lowe's recently highlighted a challenge facing the entire home improvement sector: consumers remain cautious about large discretionary projects. High interest rates, housing market uncertainty, and concerns about household budgets have caused many homeowners to delay major renovations and remodels. Lowe's leadership has repeatedly noted that shoppers are prioritizing smaller maintenance projects while postponing bigger-ticket investments.
For marketers, this creates an important question:
How do you maintain engagement and loyalty when customers are actively looking for reasons not to spend?
One answer may lie outside the category altogether.
- The Psychology of Uncertainty
When consumers feel uncertain, they don't stop seeking value. They simply become more selective about where they find it.
Research across multiple industries has shown that during periods of economic pressure, consumers gravitate toward rewards that feel tangible, memorable, and emotionally meaningful. Rather than chasing another discount that disappears the moment a transaction is complete, many consumers place greater value on experiences that improve their lives beyond the purchase itself.
In home improvement, this dynamic is especially relevant. If a homeowner is postponing a $10,000 kitchen remodel, a 10% discount may not be enough to change their behavior. But a reward that helps create a family vacation, a weekend getaway, or a memorable night out can provide a much stronger emotional reason to engage with a brand.
- Ace Hardware Saw the Opportunity
Several years ago, Ace Hardware faced a similar challenge.
The brand wanted to increase engagement among Ace Rewards members and encourage additional spending without relying on traditional discounting. Rather than offering another points multiplier or price-based promotion, Ace tested experiential rewards through a split-distribution campaign.
One segment received a travel-focused offer:
- Spend $200+ and receive $200 in hotel savings.
A second segment received an entertainment-focused offer:
- Spend $200+ and receive a $50 Live Event Credit redeemable toward sports, concerts, comedy, and other experiences.
The promotion was delivered through direct mail and email communications to Ace Rewards members over an eight-week period.
- What Happened?
The campaign generated a 23% conversion rate, demonstrating that experiential rewards could motivate purchasing behavior within a category not traditionally associated with travel or entertainment.
Perhaps more importantly, the test provided a valuable insight into customer motivation. Travel rewards outperformed live entertainment, giving Ace a clearer understanding of which experiences resonated most strongly with its loyalty members and informing future promotional planning.
The campaign also accomplished something many loyalty programs struggle to achieve: it created value for customers without conditioning them to wait for deeper discounts.
- Why This Matters Today
The Lowe's outlook reinforces a reality many retailers are facing: consumers may continue delaying major projects until economic conditions improve.
In that environment, margin protection becomes increasingly important.
Experiential rewards offer a different path. Instead of reducing the price of the product, brands can increase the perceived value of the purchase. Customers still receive something meaningful, but the retailer avoids the margin erosion associated with blanket discounts.
For home improvement retailers, this approach can be particularly powerful because the rewards are emotionally distinct from the purchase itself. A customer may not remember saving 15% on paint. They are far more likely to remember the hotel stay, concert, sporting event, or family experience that resulted from shopping with a particular brand.
- The Bigger Lesson
Periods of uncertainty often expose the limitations of transactional loyalty strategies.
When consumers are hesitant to spend, simply offering a lower price may not be enough to change behavior. The brands that succeed are often those that provide customers with a reason to feel good about spending in the first place.
Ace Hardware's experiential rewards test demonstrated that even in a practical, project-oriented category, customers respond to rewards that help them create memories, not just save money.
As home improvement retailers navigate another year of cautious consumer behavior, the lesson remains relevant: sometimes the most effective way to drive engagement isn't to make the purchase cheaper. It's to make the purchase more rewarding.
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