A Home Improvement Retailer With a Global Reputation for Innovation That Makes the World a Better Place

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1 CUSTOMER STORY ENTERPRISE A Home Improvement Retailer With a Global Reputation for Innovation That Makes the World a Better Place THE CHALLENGE Turn a big box home improvement retailer into a center of excellence for delivering meaningful innovation. THE RESULT Lowe s has completely embraced exponential thinking, with results that go well beyond innovation in its stores, a motivated and loyal employee base, and breakthroughs that address global grand challenges. Lowe s has innovated 3D printing at the International Space Station and is pushing the envelope on robotics and virtual and augmented reality. Lowe s is now a sought-after innovation partner of companies like Google and Microsoft, as well as startup organizations, and Lowe s has been recognized by the White House as a Champion of Change. COMPANY: Lowe s FOUNDED: 1946 INDUSTRY: Home improvement RESULTS, OUTCOMES, AND ACHIEVEMENTS Augmented and virtual reality design tools, Lowe s Vision and the Holoroom, which help consumers design, envision, and shop for their home of the future. The first autonomous retail service robot that speaks with customers in multiple languages, shows them where to find things in the store, and helps employees with inventory tracking. A reputation for practical and radical innovation that attracts leading technology startups and a brand name with which multinationals want to partner. An in-store, 3D printer that had its start in the International Space Station which can build any part Lowe s customers bring in for replacement.

2 How do you go from selling sheet rock and hammers to transforming Lowe s, a Fortune 50 home improvement retailer, through exponential thinking? After launching augmented- and virtual reality-enhanced stores, the first autonomous retail service robots, and the first store in space, it may seem obvious to consider Lowe s at the forefront of the corporate innovation discussion, but three years ago, these ideas seemed crazy. We went from selling sheet rock and hammers to completely transforming the entire company. Everyone now sees what seemed insane at the time and how this sets us up for the future in a dramatic way. And it took only three years to get there. Kyle Nel, Founder and Executive Director of Lowe s Innovation Labs If it feels like the stuff of science fiction, that s because it is. Lowe s has embraced a narrative-driven approach to innovation that is inspiring its more than 290,000+ employees to think and behave differently. Led by Kyle Nel, founder of Lowe s Innovation Labs, this journey started in 2013, two years after he joined the company to run international research. He challenged himself to create new ways of approaching innovation at Lowe s. It wasn t enough to have great ideas and insights, noted Nel. I wanted to build stuff, and I was lucky because I was challenged by a leader who said, Tell me what it would look like if we were really to create meaningful innovation inside the company. Kyle Nel At the beginning, only Nel had the vision for what was possible at Lowe s. How could he parlay that vision into a reality to be shared? The first step was to find a community of like-minded thinkers who understood the benefits of using emerging technologies for both business growth and global good. He started by embedding for a year at a dedicated Lowe s Innovation Lab at Singularity University (SU). In fact, Lowe s became a founding Corporate Member of SU Labs in Nel observed, What I needed was a network, a community, a team. I found it at SU. I needed help to refine and scale my vision and to be surrounded by people who could impact me and help me feel like I was either on the right track or not, and could explain why. Most innovation programs or spaces are focused on two-by-two charts and a review of case studies having nothing to do with the unique challenges I faced at Lowe s. People attend these innovation programs so they can check the innovation box by completing the program. SU is different; everyone

3 that comes in the SU doors is self-selecting to be oriented towards action. People are trying to partner, trying to co-create, pushing the technology frontier, and trying to uplift to create a world of abundance. Kyle Nel is a behavioral scientist, not a technologist. The structures he and his team have built to effect change at Lowe s rely on principles of behavioral change, including the power of story to engage and inspire, and of neuroscience to tap into unstated reactions to new experiences. Through this combination of narrative and neuroscience, Lowe s has developed a reputation for leading corporate innovation using exponential technologies such as artificial intelligence, robotics, virtual reality, additive manufacturing, and others. This methodology for understanding the future and changing the way people think, feel, and act is no longer solely being used inside Lowe s Innovation Labs. What was initially at the edge of the company is now a core strategic framework for the entire Lowe s organization, and many organizations around the world are also using this approach including Singularity University. Over the three years since Nel first embedded in his SU Lab, he and others at Lowe s have participated in virtually all of SU s programs. Kyle s activities have included sponsoring an Impact Challenge in San Jose that challenged the SU community and customers to innovate a solar cooker and water purifier using materials found at Lowe s; participating in a Global Impact Challenge where he met winning startups Fellow Robots and Made In Space; keynoting at numerous SU Executive Programs, and SU s Exponential Finance and Exponential Manufacturing Summits; and joining the SU faculty to share his expertise on behavioral science as a cornerstone for innovation. What I needed was a network, a community, a team. I found it at SU. I needed help to refine and scale my vision and to be surrounded by people who could impact me and help me feel like I was either on the right track or not, and could explain why. Kyle Nel Science Fiction Design Initiative The first challenge Nel faced was to get everyone at the company on the same page about the new future for Lowe s and everyone s role in helping to bring it about. After many seemingly successful presentations, that ultimately didn t result in action, Nel decided to use a narrative-driven approach to innovation. Lowe s provided science fiction writers with current trend and aggregated customer data and asked them to project out five to ten years to describe what the retail store and the home of the future would look like. The writers created stories of individual characters representing different lifestyles and socioeconomic strata who would live in the world they had imagined, which simplified and made obvious the impact Lowe s could have. This early effort resulted in a series of comic books that was presented to the executive team as the strategic plan for innovation. Among other scenarios, one comic book focused on a family renovating their home with the use of augmented and virtual reality. Presented just prior to the launch of the Oculus Rift Kickstarter campaign, these technologies were far from the minds of Lowe s executives at the time. But the story made this future tangible, and their reaction was to say, Go build it! Since then, the Labs team has worked backwards to bring these and more stories to life in a repeatable, proven process. SU has since developed the methodology and tools developed by Lowe s Innovation Labs into Science Fiction Design Intelligence (SciFi D.I.), a program that helps companies turn science fiction into science fact. A key differentiator for SU, SciFi D.I. helps companies project current trends and exponential technologies out years, in order to plan prototypes of new solutions. SciFi D.I. is the ultimate in out-of-the-box thinking found at SU.

4 assessing measures like attention, cognition and emotion using a combination of data from EEG headsets and eye tracking goggles, scientists can see how the brain is processing information using highly predictive correlative models. The technology serves as a diagnostic tool to create experiences that make life simpler and more intuitive. Based on this research, the Labs team identified the Lowe s Vision experience delivered on the Tango platform as one of the most intuitive visualization experiences available today. Holoroom and Beyond: Using Augmented, Virtual, and Mixed Reality The first project that the Labs team launched to bring the original narrative to life was the Holoroom, an augmented reality application delivered via an ipad that allowed customers to enter a blank room and plan the specs and design of a home remodel. After testing the experience in Lowe s Canada stores, the Holoroom evolved into a more immersive virtual reality experience that allowed customers to design their space using an ipad, then view it in VR using Oculus Rift or Google Cardboard devices. Using the Holoroom, customers can now see and experience the layout in exquisite detail; they can walk up to cabinets to see the grain of wood on the various products they want to try out, and they can look under the cabinets to see their finishes. This experience takes the uncertainty out of the vast choice of materials that are available and enables people to share their vision. Customers can take a printout of the finished project with them, complete with pricing for all the elements they explore. Lowe s has collaborated with Google to use its Tango augmented reality platform to launch Lowe s Vision, a suite of applications for in-home visualization and in-store navigation. Beyond visualization, Lowe s has also created Holoroom HowTo, a virtual reality clinic for do-it-yourself home improvement projects such as re-tiling bathrooms. The modules make it easier for customers to envision the final result, increase their retention of the steps involved, and help them feel significantly more confident about their ability to do a good job. Throughout this journey, Lowe s has partnered with Neurons, an applied neuroscience company, to evaluate consumers unstated reactions to each experience. By LoweBot with Fellow Robots Lowe s has entered into productive partnerships with SU portfolio companies that have taken the retailer in exciting new directions. We were introduced to startup Fellow Robots at SU, explained Nel. Working together, we adapted and extended their robotics to create the first retail robot, which we originally used at one of our Orchard Supply Hardware stores in San Jose, California in The original OSHbot served as a store directory that could recognize natural language and tell or guide customers where to find what they were looking for in the store. Today, the program has evolved to include eleven robots in Lowe s stores, and they can speak multiple languages. They ve graduated to helping employees complete inventory tracking within the store, in addition to handling customer service. Nel continued, Our work in robotics has now also led us to building carbon fiber rod exoskeletons with Virginia Tech that our employees are wearing to help with stocking shelves. When our employees bend over using the exoskeleton, it collects potential energy; when they release it by standing up, it turns it into kinetic energy for a 2X lift. There is no jerkiness in the movement because it is not based on motors. With both of these programs, we re showing how innovation not only helps Lowe s bottom line, but also benefits our employees.

5 3D Printing of Parts at the International Space Station with Made In Space Another challenge Lowe s Innovation Labs tackled was how to advance real-time, local manufacturing. In an early pilot conducted in partnership with Authentise, another SU portfolio company, customers could simply bring in an object, such as a broken or out of production part, and Lowe s could digitally scan it for the customer to create a 3D model that could be used for printing, among other applications. Broken parts could even be pieced back together. Customers could also modify and print objects designed by Lowe s, in just about any material they wanted. Helping to Solve the Safe Drinking Water Crisis for 660 Million People in the World By partnering together, SU and Lowe s developed a Clean Water Challenge in San Jose, CA in The 12-week challenge invited Bay Area citizen scientists and do-it-yourselfers to design and build an affordable water purification device using common materials found in Lowe s home improvement stores. Judges and representatives from impact partners at Socialab and the International Water and Health Alliance selected one winner from each of two categories, solutions that cost more than $50 to produce, or less than $50 to produce. In another partnership, Lowe s exemplified moonshot thinking. We learned a lot from partnering in 3D printing with Made In Space, a connection we made at SU, noted Nel. We essentially put a Lowe s store in space at the International Space Station! We figured it would be a good test: if 3D printing could work flawlessly in the extreme conditions in space to produce parts that wear out or break, then it could also work in our stores. Lowe s and Made In Space have also brought forward a more holistic view of additive manufacturing that include applications like recycling. The two companies created a prototype demonstration of technology that would allow customers to bring in plastic bags or anything else made of plastic they re ready to discard, and recycle it into 3D printing filament to be used over and over and over again for products like Lowe s buckets. We see things in a constant state of transition, which helps the planet by reducing unnecessary waste, said Nel. In 2016, the Obama administration recognized Lowe s and Made In Space as Champions of Change for this effort.

6 Kyle Nel on the Critical Need to Be Exponential and the Value of Partnering With SU A big part of working with SU and its global community is being able to share your own experiences, as well as understand others learnings and frameworks. When I m at SU, I know I m with people that are part of my tribe, and know that we are learning and growing and challenging each other for better results. You don t see a lot of disruptive innovation from big companies. That s why I want to share what we have done at Lowe s. We have a proven framework now for how to do it and make an impact. We have a purpose here for why we are doing things like additive manufacturing, like putting a store into space and robots into our stores, as well as working with big companies like Google and Microsoft. I feel the challenge to be exponential extends beyond the organization to me personally. Ultimately organizations are made up of people, so I asked myself why I couldn t be one of those people that is driving change, and helping Lowe s have a positive impact in the world? What s great about SU is that it exposes you to new things that cause you to think and react in a different way. SU is a melting pot of faculty, alumni, and other corporations who are all fighting the same fights you are all swirling together and offering you new opportunities that could dramatically change your business in the short-, medium-, and long-term. A big part of working with SU and its global community is being able to share your own experiences, as well as understand others learnings and frameworks. When I m at SU, I know I m with people that are part of my tribe, and know that we are learning and growing and challenging each other for better results.

7 SU and Lowe s At-a-Glance SU PROGRAMS Lowe s Lab at SU Labs Global Impact Challenge 2014 Science Fiction Design Intelligence Lowe s Clean Water Challenge Exponential Finance Summit 2014 Keynote Speaker Exponential Manufacturing Summit 2015, 2017 Keynote Speaker Webinar: Leveraging SciFi and Exponential Technology Horizon Mapping to Navigate an Uncertain Future Executive Program: attendee and speaker Startup Network (Made In Space, Fellow Robots, Authentise) Innovation Lab, Prototyping Sprints, Accelerator, and SU Labs Global Solutions Program 2012 Kyle Nel, Member, SU Faculty EXPONENTIAL TECHNOLOGIES Virtual Reality Augmented Reality Robotics 3D Printing Solar Synthetic Biology Biomimicry Behavioral Science Neuroscience Quantum Computing Artificial Intelligence GLOBAL GRAND CHALLENGES Water Space Environment About Singularity University Singularity University (SU) is a global learning and innovation community using exponential technologies to tackle the world s biggest challenges and build an abundant future for all. SU s collaborative platform empowers individuals and organizations across the globe to learn, connect, and innovate breakthrough solutions using accelerating technologies like artificial intelligence, robotics, and digital biology. A certified benefit corporation headquartered at NASA Research Park in Silicon Valley, SU was founded in 2008 by renowned innovators Ray Kurzweil and Peter H. Diamandis with program funding from leading organizations including Google, Deloitte, and UNICEF. To learn more, visit SU.org, join us on Facebook, follow us on and download the SingularityU Hub mobile app Singularity University. All rights reserved. NASA Research Park Building 20 S. Akron Rd. Moffett Field, CA USA