As the home improvement retailer continues along its multi-year “One Home Depot” investment strategy to blend its physical and digital selling experiences, it’s seeing results pay off in what Craig Menear, chairman, president and CEO called a record year for the company.
Sales for fiscal year 2019 were $110.2 billion, up 3.5% from 2018’s $108.2 billion. Although Q4 sales for the home improvement retailer dipped 2.6% to $25.8 billion, from the prior-year's $26.5 billion, the company noted that fiscal 2018 included an extra week of operations that added approximately $1.7 billion of sales.
When that extra week is excluded, online sales grew 20.8% in the quarter and 21.4% for the year.
The majority of Home Depot’s U.S. stores have been refreshed to better address navigation and checkout, with upgrades including enhanced signage and investments in the front-end. These improvements have resulted in higher customer satisfaction scores and associate productivity, Menear said in an earnings call.
Home Depot is also investing to blend its physical and digital platforms into a more seamless interconnected experience, such as its chain-wide rollout of digital appliance labels, which connect ratings from the digital world to the store in order to enhance the in-store shopping experience.
“HomeDepot.com continues to be an engine for growth for our overall business, driving increased traffic online and additional footsteps to our stores,” said Menear. “Because of this, we continue to invest in search functionality, category presentations, product content and enhance fulfillment options to remove friction from the online shopping experience.”
Proving that BOPIS is big business, Menear noted that its online customers choose to pick up their orders in stores more than half the time.
Home Depot also views its B2B Pro Xtra customer base, now including more than 1 million members, as a growth opportunity and is building an ecosystem encompassing products, brands, delivery, credit services, tool rental and more. As part of this, the company has sunk resources into its dedicated Pro website and completed the integration of its CRM system for these sales and services teams.
“All of that coming together allows us to be able to service our Pro customers in a more holistic way,” said Ted Decker, executive vice president, merchandising, “and it allows us to continue to grow with larger more complex customers.”
Finally, Home Depot continues to enhance its delivery and fulfillment options with new supply chain facilities, and Menear said the company is pleased with the initial results in its goal “to create the fastest, most efficient delivery network in home improvement.”
It has opened a dozen Market Delivery Operations, transitioning 20% of its clients’ deliveries from an outsourced model to one where Home Depot can control more of the customer experience.
“This is translated to meaningful improvements in our customer satisfaction scores for appliance deliveries,” said Meanear. “Our supply chain buildout will continue to ramp from here with the largest number of new facilities coming online in 2021 and 2022.”