This report is part of our Retailers’ Timelines series. In this report, we examine key events in Home Depot’s recent history.
- Home Depot undertook meaningful steps to strengthen its online business and supply chain in the years between 2015 and 2018.
- In December 2017, Home Depot acquired The Company Store, an online home decor retailer from Hannover Direct.
- In January 2017, Home Depot invested in a wind-powered renewable energy project operated by EDP Renewables.
- In January 2015, Craig Menear became the Chairman of Home Depot, effective from February 2015.
Home Depot—Company Description
Home Depot is the largest American retailer of home improvement products with 2,284 megastores, as of March 2018. It also owns US company Interline Brands, which is a maintenance, repair and operations contractor for institutional and commercial facilities.
Key Events Overview, 2008–2018
1) 2015–2018: In the last three years, the company has strengthened its online business and supply chain by increasing investments across these segments. In November 2015, Home Depot announced the opening of an online customer-care operations center in Tempe, Arizona, and acquired The Company Store, an online home decor retailer in December 2017. It also opened a fulfillment center in Ohio to support its online business and IT initiatives in September 2015.
2) 2012–2014: In 2014, Home Depot scaled its initiatives to support its online business. The company announced the opening of a direct fulfillment center in Atlanta to strengthen same-day delivery and also support its online business through new warehouse management and material handling systems. This step followed the company’s acquisition of Blinds.com, an online window covering retailer, in January 2014.
In order to improve logistics and distribution across Mexico, Home Depot announced an investment of $197 million in January 2013 and the opening of six new stores in the country. In September 2012, Home Depot partnered with JD.com to sell its products online in China.
3) 2008–2011: In January 2011, Home Depot announced various store openings including the CW Home Depot store in the Philippines. The company announced its plans to open seven new stores in Mexico in 2011 which followed its announcements of six store openings in the US in fiscal year 2010, and 12 new global stores in the year 2009. This period also saw the company form many important partnerships, including one with Martha Stewart in 2009 to sell her brand’s cleaning products and paints. The partnership with Stewart had followed Home Depot’s partnership with Citigroup to reduce the fixed costs associated with its private-label credit cards in 2008.
Home Depot in Charts
Home Depot is transforming the shopping experiences for both professional and DIY customers. The primary strategy of the company is to invest in its supply chain and boost its same-day and next-day delivery capabilities to cater to growing online demand. The company announced in its 2017 annual report that it plans to invest a total of $11 billion on store remodelling, bettering its supply chain and digital experience, and on its employees.
Strategies outlined by Home Depot in its annual report are given below.
1) Investing in Supply Chain to Make It Faster and More Efficient: Home Depot plans to invest around $1.2 billion of the $11 billion on its supply chain over the next five years owing to growing consumer confidence and expectations in product fulfillment and delivery. The company expects to increase same-day and next-day delivery services to cover approximately 90% of the US population by the end of fiscal year 2019.
2) Increased Focus on Pro Customers: Home Depot will continue to leverage its service providers. Bill Lennie, Home Depot EVP said, “With over 40% sales penetration, serving the Pro customer is important to our success.” The company’s Pro segment’s sales have outpaced its DIY sales consistently for several years, and it expects to become the primary source for all needs of Pro customers. The average ticket size for a Pro customer is $6,000 annually and Home Depot has taken meaningful steps such as its co-branded credit card to connect better with them. The card has an approval rate of 72% and the average credit offering is $6,700.
3) Investing in Business to Create the “One Home Depot” Experience: The company plans to provide its customers with a seamless shopping experience. In the past, the company’s customers have complained that they find its stores “hard to navigate” and that “it takes too long to check out.” Home Depot is investing in navigation as well as in the customer-facing touchpoints at its stores to enable a faster and easier checkout experience. It is also adding automated checkout lockers in stores to enable faster pickup of online orders.
Home Depot is commited to investing in its business to enhance the customer experience and improving its logistics to strengthen the online business as sales through this channel continues to grow. The company has lately raised investments in store lighting, signages and a better checkout experience along with investments in an omnichannel experience. The consumer-centric approach and continued investments in technical advancements will play a pivotal role in growing Home Depot’s sales.