US Insights

3 Takeaways from Home Depot's investor day

Hannah Hayes

Analyst

Retail 12.08.2017 / 12:00

Home Depot

The concept of "One Home Depot" dominated the retailer's outlook.

Home Depot provided long-term financial guidance as well as a clear strategic path for achieving its ambitious, but optimistic goals on its 2017 Analyst and Investor Day call this week. At the core of Home Depot’s new initiatives is omnichannel, but many of its plans also parallel our point of view on the future of big-box retail. Notably, woven throughout the retailer’s narrative was the concept of “One Home Depot,” the retailer’s effort to separate the physical and digital siloes on which it was originally built and move to being one “interconnected” retailer that blends both aspects seamlessly.

Here are three other things from the call that stood out to me:

Stores remain a central hub, with productivity and convenience top of mind. Following pilot programs addressing shopper pain points, Home Depot plans to increase navigational signage and lighting in stores, redesign the front end to speed checkout times, and install self-serve lockers for shoppers picking up online purchases. These investments are aimed at elevating the in-store experience (a topic we examined more closely in our most recent home improvement webinar) by adding convenience and making products easier to find without the help of store associates.

The pro customer is the key to growth. Not surprisingly, Home Depot remains laser-focused on its pro contractor shoppers who account for more than 40% of its sales. To move away from its image as a “convenience store” for pros, the retailer plans to continue adding value for different types of pros. To that end, it plans to invest in a new B2B website that integrates products from Home Depot stores, the Home Depot website, and Interline into one catalog. It also plans to use data to personalize its advertising messaging and aid its pro account sales associates in providing more personalized help. 

Supply-chain enhancements keep pace with shoppers’ increasing expectations for speed. Possibly the biggest announcement of the day was the retailer’s plans to revamp its downstream supply-chain operations to improve efficiency and reduce costs for shoppers. Among the changes: plans to build different types of direct fulfillment centers, each specializing in certain types of merchandise; consolidating store-based delivery to fewer stores; and using vans and cars to deliver small, popular items to shoppers, again moving product to shoppers faster and more efficiently.

The presentation made clear that while Home Depot has been ahead of many competitors in its omnichannel approach, it is not complacent. The retailer is accelerating its investment plan over the next few years, and is constantly looking for ways to innovate and drive value for shoppers.

Source: Kantar Retail

Editor's Notes

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