Is Home Depot's 30,000-Unit Mobile Device Rollout a Game-Changer?

Home Depot's rapid rollout of 30,000 multi-function handheld devices to 1,970 of its stores, providing associates with a combination mobile POS/real-time inventory checker/phone/store walkie-talkie, is "a milestone for sure," according to Greg Girard, Program Director, Merchandise Strategies at IDC Retail Insights.

However, for the program to represent a "tipping point" signaling retailers' embrace of mobile technology, "other retailers have to believe they're ready to handle a wide range of changes the adoption of this kind of mobility requires," Girard adds—building in-store wireless connectivity and training associates chief among them.

"Big box warehouse stores are the easiest for wireless connectivity, and the relatively long tenure of Home Depot's store associates enable the change we see here," Girard adds. "At the other extreme, it would be a Herculean effort to bring wireless into Macy's Herald Square store, for example."

Despite these challenges, both Girard and Jay Holan, vice president and senior consultant at FitForCommerce, a best practices e-commerce consulting firm, agree that Home Depot's program is significant, and that it will provide the retailer with competitive advantages in customer service, labor savings—and potentially in engaging with customers' own mobile devices.

"The development work that went into this solution should be able to be leveraged to address many of the opportunities for customers to use their own mobile devices in Home Depot stores, and presumably that is an important part of the longer term roadmap," says Holan. "At a minimum, associates should be able to send price quotes, bills of materials or links to online product information and instructions to customers' mobile devices when they are in the store. A paperless receipt for a purchase made in the aisle could be sent to a customer's mobile device, which could be scanned at the door to validate purchase and manage shrink. A paperless will-call receipt could be presented on the customer's phone at a nearby store to pick up inventory not available in the store where the purchase was made."

These types of customer interactions offer retailers enormous opportunities for deepening their understanding of customer behavior and increasing customer engagement, according to Holan. "That is where Home Depot can capture a customer advantage—by empowering the customers themselves to do much of what this associate-assisted device can do, and gather useful data about their customer's purchases, preferences and patterns in the process," he says. "This information can be used to drive customers back to the stores with promotions, replenishment offers and powerful loyalty programs that Home Depot can drive directly to their customers' mobile devices."

Girard agrees that Home Depot's actions create a framework for engaging with consumer mobile devices: "The in-store wireless backbone certainly takes Home Depot a big step closer technically. Financially, the backbone would be a 'freebie' for a consumer mobile device rollout. That's a huge edge."

He also believes Home Depot's prediction that labor savings will pay for the program's $64 million price tag within a year are more than reasonable. "If [Home Depot's] labor costs are 10% of its $43 billion in revenues last year, that's $4.3 billion in labor. $64 million is just under 1.5% of that; getting a 1.5% boost in labor productivity from wireless is a very low bar."

For related content see: Home Depot's $64 Million Mobile Investment Rolls Out to 1,970 Stores
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