Home Depot Investing In E-Commerce Channel
By Megan Zielinski, contributing writer
For the upcoming year, Home Depot will focus primarily on enhancing the e-commerce experience for customers rather than adding on to their 2,263 retail stores currently in operation.
As omni-channel continues to rapidly grow and provide customers with convenient shopping experiences, Home Depot is taking business to the Internet, adapting to the changes in the newest era of shopping. In February, the company announced the opening of its first new direct fulfillment center in Locust Grove, GA. The warehouse, the size of 20 football fields, carrying 100,000 products, will allow for more shipments to be sent faster, reaching customers doorsteps within days of purchase. New management and inventory handling will be implemented to improve efficiency of the warehouse — the first of three scheduled to open within the next two years. The company will employ 1,000 new workers with the opening of all three centers.
Known for covering the U.S. with physical stores, adding up to nearly 200 stores each year, the traditional retail company put a halt on building mass amounts of additional stores each year since the 2008 market collapse. Even as the market improved over time, the chain suffers from a decrease in store traffic as a result of advancing technology and the overabundant amount of stores. "The retail model forever was to increase sales through opening additional units, but as you added stores to a finite group of households, each store becomes less profitable, so the decision was made to stop opening additional boxes." states Frank Blake, chief executive at Home Depot.
Home Depot plans to invest up to $1.5 billion this year to technology improvements and supply chain, syncing stores to Internet as well as developing the new fulfillment centers. The Home Depot site offers over 600,000 items to everything ranging from extension cord selections to vanities and sheds, whereas in-store carries only 35,000 items. In an effort to expand e-commerce features, Home Depot purchased Blinds.com in January, bringing in expert staff serving customers through live chat and face2face. “The acquisition of Blind.com positions us well for expansion in the quickly growing online window coverings market. In addition, their unique sales and service model is one we hope to learn from as we continue to create even better interconnected retail experiences for our customers,” Blake states
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