“These days, people expect everything to be frictionless,” the “Mad Money” host said. “The moment they hit any kind of problem, any speed bump, they just take their business elsewhere.”
Lowe’s shares rallied nearly 4% to $117.83 during the trading day on the heels of its third-quarter earnings beat and forecast raise. CEO Marvin Ellison has led an effort to beef up the home improvement retailer’s online presence, which he said contributed to same-store sales growth and expects to keep growing.
On the other hand, Home Depot attributed its same-store sales and revenue shortfalls, in its earnings report out Tuesday, to its digital platforms. The company has also made investments in its website, but CEO Craig Menear said the process has been “more complex than originally anticipated” and that results “will take longer to realize” than once thought.
Home Depot’s shares have fallen more than 7% from Monday’s close.
“If your website doesn’t run smoothly, you’re losing a lot of business. Lowe’s understands that, now,” Cramer said. “Meanwhile, Home Depot stumbled yesterday because their legacy systems aren’t up to snuff and they can’t work fast enough to replace them.”
Home Depot remains the most valuable of the two retailers by a long shot, sporting $241.9 billion in market capitalization versus $90.9 billion in Lowe’s.
Cramer warned that a multitude of enterprises don’t understand how important technology is to do business in the modern world.
Companies must adapt to the fast-changing world — one where most kids have never had to wait on hold during a phone call — with the help from software made by firms including, but not limited to, Salesforce.com, Square and Okta that will help give them a competitive advantage, he said.
“Thousands of companies are in trouble right now because they don’t know how to deal with technology,” the host said. “If you want to compete in this environment, having the right tech gives you an enormous edge.”
Disclosure: Cramer’s charitable trust owns shares of Home Depot and Salesforce.com.