The Home Depot is a North American retailer of consumer goods and building materials that caters to the needs of the homeowner, local contractor, and those empowered to Do-it-Yourself (DIY). They currently claim to be “the world’s largest home improvement retailer,” (Home Depot Product Authority, LLC., 2020, para. 2) with approximately 2,200 stores in the U.S., Mexico, and Canada. Their website, HomeDepot.com, caters to the DIY customer, interior decorator, and homeowners, as well as local businesses and contractors requiring building materials and hardware for their construction projects.
Marketing Communications Tools
As the core of their strategy, Creating the Best Interconnected Experience is where Home Depot focuses on three perceptual pillars: Flexible, Personal, and Easy (Hofmann, 2017, p. 4). It is this mantra that defines how and where resources are to be applied within their integrated marketing strategy. They employ data, defined as 1.7 trillion data points per week in various predictive models, over 90 million total customer households, with approximately 50 million active customer households in a typical 12-month period. Such data is derived from a variety of sources including mobile app activity, customer behavior, on-line visits & transactions, email engagement, provided services, vendors and media partners, as well as other types including property data, 3rd-party credit card transactions, building permits, and demographics (Hofmann, 2017).
The Home Depot leverages the power of data to better know their customers, which include Millennials who represent 1/5 of their current sales, are brand loyal, and the most likely targeted segment to buy homes. Therefore, their strategy mix leans digital, employing Facebook, Pinterest, Display Ads and Search, alongside traditional methods, those being Television, Radio, and Print. In addition to interest-, persona-, and search-based targeting, the Home Depot uses their mobile app to connect users to content that harvest data for retargeting and messaging for add-on sales. Their weather-triggered outreach efforts also play a key role in determining how ads and social media work together, when and where, while mailers, for example, provide tangible offers for highly relevant products and services according to the audience. These efforts promote a well-integrated approach to communications, outreach, and customer engagement.
The Home Depot has been highly effective in leveraging a multitude of mediums as part of their interconnected and personalized messaging strategy. In 2011, digital marketing spend was approximately 22% and within just 6 years, grew 250%, flipping their traditional-to-digital media spend ratio, which resulted in obtaining Rank 2 in “The Best Digital Marketers,” as well as receiving the Top Social Media Award the year prior. In doing so, online visits and online sales more than doubled from 2013 to 2016, also affirmed by awards, Best in Mobile and #1 Big Box Retailer for 3 Years (Hofmann, 2017, pp. 1-4). Their digital channels, including Weather-Triggering, Geo-Fencing, Google Local Inventory Ads, and Pinterest Shop the Look, provide a robust mobile outreach effort, while traditional channels, including ABC, NBC, CBS and ESPN television networks, coupled with online sites including YouTube, Zillo, Pandora, and Spotify, offer a consisted and harmonious process that can touch the same customer in several ways, which supports a very reliable, brand-building message.
Industry Analysis
Trends within this industry have all indicated the need for integrated efficiencies using the power of social media and mobile connectivity. Because so many consumers are equipped with a smartphone, the benefits to large retailers such as the Home Depot can be widely realized, including other large retailers such as Target and Walmart who both offer their own branded app to attract customers with specialized offers and tools—some that promote engagement while the customer is in their stores. Beyond mobile, these retailers are always testing new ways to further the experience, giving the customer more power and flexibility to buy.
Customers of Home Depot, for example, will be able to grab what they ordered from a box and simply leave, while bridging the store experience to more online. “Those who order merchandise from home are directed to the rows of orange boxes, where they unlock the designated one and then leave without having to seek assistance from an employee” (Pan, 2018, paras. 1-3), thereby circumventing long lines and waiting for delivery. These pick up lockers reveal how customer interests and data can reshape experiences, indicated by Home Depot spokeswoman Lana Johnston, saying, “Customers’ expectations with shopping are changing, and they want as many options as you can possibly give them” (Pan, 2018, para. 5).
What about Walmart?
Similar to Home Depot, Walmart is installing what they refer to as “pickup towers,” which stands almost 20 feet tall with a kiosk-type video screen. An online shopper can “simply scan the order confirmation code from their phones,” triggering their merchandise to be dispensed via a robotic conveyor system (Pan, 2018, para. 7). These towers can store about 300 items in time for most online shoppers as they enter the store.
Considerations for The Home Depot
When considering tools to enhance Home Depots’ customer and brand experience, much of the effort favors order fulfillment and e-commerce. The company has already committed $78.8 billion for an “interconnected retail model that uses the web and mobile apps to extend the store aisle to consumers wherever they happen to be — even if they’re already in one of 2,263 Home Depot stores in North America” (Cassidy, 2014, p. 13). Typically, several hundred million dollars a year are allocated to their fulfillment centers, facilities, mobile technology, and warehouse management system.
Mark Holified, Sr. Vice President of Supply Chain, describes having a complete and unbroken customer model. “We want to be able to serve our customers wherever they shop,” leveraging direct fulfillment to “speed goods ordered online to consumers, blending its digital and brick-and-motor operations” (p. 13). Their approach is best described as “the online business really exists to help us close sales in the store, and the store exists to help us close sales online,” Holifield explained. “It’s a symbiotic relationship,” where to consumers, “the online and in-store experiences are increasingly inseparable” (p. 13). This way of thinking has been quantified within the evaluation process, where data indicates that half of Home Depot customers visit a store to conduct product research before committing, validated by mobile phones and tablet customers who comprise 1/3 of all online sales (Cassidy, 2014).
Brand Management Improvement
It is challenging to foresee how Home Depot can make additional gains having so much invested in the customer experience. With a clear emphasis on fulfillment and mobile interaction, the retail chain has elevated their internal process, which includes capturing the order, knowing where to pull inventory, fulfilling the order in the most optimal way possible, then deliver in a way that maintains or exceeds expectations of the brand, “cutting shipping time from three to five days to two days” (Cassidy, 2014, p. 13).
Perhaps a novel approach is to consider brand improvements according to the audience, examining those less likely to live in a world of QR codes and mobile apps. This would bring more attention to their website. For older online shoppers, for example, the Home Depot website may seem overcrowded, having dozens of menu options that become available all at once, and without a quick way to get an answer to a DIY question.
To remedy this, perhaps the Live Chat function could be made available in more places, not just in the final stages of product selection. Besides, there are arguably more questions regarding home repair than for other types of consumer concerns. Though this could bring additional costs, it’s an opportunity to offer help to the type of visitor who may need it most. By making certain adjustments, such changes could reveal greater needs for a less visible demographic, one that also can leverage printed advertisements, mailers, and television advertising.
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References
Cassidy, W. B. (2014). LESS HOLDING, MORE SELLING. (cover story). Journal of Commerce (1542-3867), 15(5), 12–16.
Home Depot Product Authority, LLC. (2019, March 28). Home Depot Annual Report. Retrieved from https://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/2019_Proxy_Updates/HDAnnualReport2018.pdf
Home Depot Product Authority, LLC. (2020). The Home Depot: Corporate. Retrieved from https://corporate.homedepot.com/about
Kevin Hofmann. (2017). Interconnected Investments [PowerPoint slides]. Retrieved from https://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/IAC/6-Kevin%20Hofmann%20-%20121%20Print.pdf.
Pan, D. (2018, June 28). Home Depot eyes lockers to help build online sales. USA Today, p. 01B. Retrieved from https://link.gale.com/apps/doc/A544757871/OVIC? u=uphoenix&sid=OVIC&xid=e377ef7a