More on Home Depot's $11 billion bet

During its investor and analyst conference Wednesday, the world’s largest retailer put “frictionless, interconnected” shopping front and center.

The Home Depot provided an update on its three-year, $11 billion investment program to position itself as “One Home Depot.” The program was launched in Dec. 2017, and the amount of investment is about twice what the company would invest in a business-as-usual retail environment.

"We are confident that the investments we are making in the One Home Depot experience will address the evolving needs of our customers,” said CEO Craig Menear. “We are building on our distinct competitive advantages to capitalize on a large and fragmented market opportunity and extend our leadership position for years to come.”

The Atlanta-based retailer also offered fiscal guidance for years 2019 and 2020. Home Depot expects sales growth of approximately 1.8% in 2019, and comparable sales growth for the comparable 52-week period of approximately 3.5%.

In 2020, the company’s preliminary guidance is for sales to ramp up to 3.5% to 4.0%, both on a total and comp-store basis. Those numbers are lower than consensus Wall Street forecasts of about 4.3%.

[For more on Home Depot's sales and earnings, click here.]

“We’re investing to position ourselves as the low cost provider and grow faster than the market  going forward,” Menear said.

The One Home Depot investments include everything from store enhancements and new e-commerce solutions to industry-leading delivery options, and a comprehensive Pro ecosystem. The idea is to “further unlock the interconnected retail vision the company began building many years ago,” the company said.

Menear made note of the retailer’s new slogan – “How doers get more done.” That change of the slogan reflects the rapid changes in the retail landscape and customer expectations, he said.

Other specifics in the Home Depot playbook include:

  • Integrating special order, price and delivery functionality for large pros;

  • Improving the ease of use of the Home Depot web sites for pros and DIYers;

  • Improving digital store navigation tools for customers;

  • Streamlining order management systems in stores, a move that has led to customer experiences that are 35% faster;

  • Improving personalization “to unlock a more comprehensive view of the customer.”

  • Menear maintained that people are the key to its success. And the company is investing a million hours per year over the next five years in training and development.

  • A $1.2 billion five-year investment to build the fastest most efficient delivery network in home improvement.

The company pointed to a significant opportunity for growth. A chart described a $650 billion home improvement market and a current 15% Home Depot share in that market.

Menear pointed to the success of Home Depot’s long-running effort to grow online sales, which have seen increases of about $1 billion in each of the last six years, making The Home Depot the 5th largest e-commerce operation in the U.S., he said.

“And 50% of the time, customers choose to pick up their orders inside our stores -- a testament to our interconnected strategy,” he added.