Orange-colored sky’s the limit
Start with today’s competitive home improvement landscape. Now, add a brand new, built-from-scratch, $13 billion home center behemoth by the year 2018.
Does that grab your attention?
Well don’t look now, but that’s kind of what’s going to happen if Atlanta-based Home Depot’s “conservative” forecasts hit their target. The retailer isn’t really going to launch a new chain or significantly grow its footprint. But it does expect to grow by the sales equivalent of 357 stores, as it marches toward $101 billion in sales in 2018.
That’s like taking a new, third-largest U.S. home improvement retailer, and bolting it on top of the first.
“Can you bucket that for me?”
That was one of the questions asked during the company’s nearly four-hour shareholders meeting last month. The short answer involves getting more out of new and existing customers, getting more out of interconnected retail, and getting more out of its stores.
Professional customers are going to have a say in this growth. They represent 3% of the company’s customers but 40% of its sales. And they’re getting a new tool in 2016.
As CFO Carol Tomé explained, Home Depot has a commercial credit card that gives pros an average line of $6,800. But most don’t come close to that limit. “Why? Because it’s not a financing tool,” she asked and answered. “Our pros need a financing tool.”
And they’re getting one in the form of a new commercial card in 2016 that offers 60-day terms. “They get paid before they have to pay us,” Tomé said.
Growth area No. 2: keeping up with the increasingly digital customer. The company says it has successfully piloted Buy Online Deliver From Store, providing specific delivery windows as soon as next day.
Mark Holifield, EVP supply chain, explained delivery is nothing new to the Home Depot. But, “before it was 40 clicks to get to a final delivery for an associate, it’s now maybe nine clicks, and takes a lot of complexity out of the process.”
And for new and existing customers, give them some sizzle to go along with the steak.
“Innovation is a key factor that continues to drive the excitement and the customers’ willingness to spend in this space, and that’s something that we’re focused on,” said CEO Craig Menear.
Wishing you a Happy New Year
HBSDealer will return to its normal publishing schedule Jan. 4, 2016. The staff of HBSDealer –including Jaclyn, Ken, John, Steph, Greg, Amy, Jim, Terri, the other Ken and Farida — wishes you and your families a happy, prosperous and profitable new year.