The chain is in the midst of an ambitious strategy to unify online and offline operations — a plan that may have been a key contributor to the 9% increase in overall home-improvement product sales during the holiday season. And Home Depot’s plan, if it is indeed fortifying industry sales gains, could alter shopper expectations across the board.
This is because Home Depot’s integration strategy is designed to hone in on what shoppers want most: synthesized access, product availability and pinpoint delivery — not an easy task when many of the items purchased require a forklift to unload. But Home Depot’s five-year plan to create a “one-store” experience for shoppers, fittingly called One Home Depot, appears to be delivering on its promise in the early stages. Home Depot recently increased its fiscal 2018 sales projection to 7.2%, from 7%.
The coming year will be the true test of the program. Home Depot was fortunate to begin implementing its “one” plan when low unemployment gave homeowners the financial confidence to invest in renovations. In 2019, it could have to prove how well the model works despite economic conditions. The ways in which shoppers respond could represent an opportunity for all retailers.
Home Of One Big Idea
Home Depot’s effort to create an all-in-one presence necessitates the need, faced by all retailers, to provide a seamlessly interactive online and offline experience.
Among the components of its plan:
Enhanced search and navigation: Home Depot invested in more efficient online search functions, more direct communications with its delivery team and other upgrades to improve its digital transaction results. Combined, these efforts enable Home Depot to narrow package arrival times to two- to four-hour windows, an option especially important to its time-is-money professional customers. In some cases, the company has said, it will have a forklift waiting on site to unload.
Streamlined delivery: By restructuring its supply chain and distribution, Home Depot can now reach nearly 95% of the U.S population with parcel shipping in two days or less. The goal is to reach 90% of the population with same-day or next-day delivery. Again, this is essential for its professional customers who spend more than DIY shoppers. Also, in some instances, the customer may want to shop online and then pick up their items in the store for speed and convenience and to control timing. Home Depot also rolled out car and van delivery to more than 40% of the U.S. population.
In-store work: Home Depot has updated store signage in nearly 700 locations to make it easier to find items, and it is investing in pickup lockers for click-and-collect online orders. But key to in-store success is product availability. To this end, Home Depot has implemented replenishment strategies that include an application enabling workers to quickly see if a sought-after product is in overhead storage (previously, they would have to look for it manually). So far, Home Depot has reduced the number of out-of-stocks among top-selling items, per store, by 24%.