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03/18/2014

Home Depot Builds Omnichannel Foundation

For the Home Depot, the omnichannel journey has many moving parts from enhancing the customer experience, to developing a new supply chain, to improving traffic and conversion both online and in-store.
 
Over the last several years, The Home Depot has developed a new supply chain called Rapid Deployment Centers or RDCs. The RDC strategy, along with improvements in our stocking in bulk DCs, allowed for an improvement of in-stock rates, churns and customer service.
 
The next step in the retailer's DC network is to build out a network for its dotcom business as well a new platform for store delivery and last mile delivery to customers' homes. Merchants and IT teams have worked together to develop assortment planning, space allocation and pricing capabilities. Now, the tools are in place and the retailer can begin to use them to create value for customers, associates and shareholders.
 
Along with these foundational investments, Home Depot is also investing to improve the core functionalities of its website, as well as mobile web and mobile app capabilities. The head of online for Home Depot refers to the phone as a store in a pocket, dedicating time and budget to necessary improvements. Unlike the physical store, the virtual store requires constant upgrade, only with the virtual store the pace is a lot faster. "We've made significant progress over the past 18 months, but the process will never end, the ongoing objectives to keep improving the ease of use, personalization and connectedness of our online experience," said Ted Decker, SVP, U.S. Retail Finance, The Home Depot.
 
"We see over 10% of our online orders actually created in the store with the consumer or pro working side-by-side with one of our associates," noted Decker. "In addition, over 30% of all online orders are picked up in the store and about 20% or one out of five customers coming into the store to pick up their online order buy another item to their basket while they're at the store."
 
The goal of the online channel is to improve traffic and conversion in the store and vice versa. One of the major efforts the retailer has undertaken over the last few years is linking the district systems developed over the years as the brick-and-mortar retailer, according to Decker, "we're creating a technology platform that will support a seamless customer experience whether shopping online or in store."
 
"A lot of our IT enabling spend is for interconnected retail," concluded Decker. "So it's a capacity issue and not a dollar governing how much we're going to spend on CapEx. We're running out our strategic plans and our long-term financial plans – we haven't hit the value just yet."
 
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