By Anna Rose Welch, Director, Cell & Gene Collaborative
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Company’s increase in online sales suggest omni-channel strategies are working
A year-and-a-half-long gain in the U.S. housing market has led to an increasing number of consumers investing in remodeling efforts, and in turn, has benefitted Home Depot, which reported a stronger third quarter than investors expected. For the quarter, the company’s revenue increased 7.4 percent to $19.5 billion, coming in above analysts’ average estimate of $19.2 billion. In addition, comparable store sales for U.S. stores increased 8.2 percent. Because of consumers increasing willingness to invest in home projects, the company saw the average purchase price per customer rise by 3 percent to $56.27, while the number of transactions in the quarter increased 4 percent to $344.3 million.
According to Home Depot CEO, “Our third quarter results reflect the continuing improvement in the housing market and our solid operational performance.” However, some believe that its emphasis on omni-channel is also helping to improve the retailer’s performance. The Q3’13 report revealed a 50 percent spike in digital sales and online sales now account for 3 percent of the company’s total sales. Indeed, 1 million of the quarter’s 13 million transactions came through the online channel. To cater to online shoppers, the company upgraded its website and mobile sites to improve and simplify the checkout process and include refreshing category pages—innovations which led to an increase in traffic during the quarter.
In addition, the company has made some important investments in mobile, including an app which provides customers with an interior map for each of the 2,000 Home Depot stores, voice activated assistance, a barcode scanner, and information on all products. These investments are proving important for the retailer because online, it can expose customers to 400,000 products—a huge amount compared to the 35,000 items that can be found in the Home Depot brick-and-mortar stores. In fact, the app has been downloaded 3.5 million times and a large number of people have signed up to receive push notifications. According to the company’s CMO Trish Mueller, the app is especially important during the holiday season; app traffic on a previous Black Friday increased by 60 percent because of these push notifications. With more people beginning their shopping earlier this year, it could be possible that the retailer will see even more traffic throughout the month as people prepare early for the holidays.
Home Depot has also been building its presence in social media, finding that Twitter has been particularly influential in helping the retailer connect with its customers. According to Mueller, engagement has been 40 percent higher with tweets on mobile than desktop. In order to reach an even wider audience, the company signed on with the Weather Company to create a new Twitter video offering called “Project of the Week.”
Overall, the increase in online sales suggests that the retailer’s efforts to blur the lines between in-store and online are working. With the holidays right around the corners, the company is planning to offer customers “extreme values” both in-store and online. Because the company has initiated a buy online, pick-up in store option for mobile and desktop users, it would seem likely that the company will see an increase in traffic on the online store and in the brick-and-mortar stores. Investments like these prove the retailer is serious about reaching out to its customers, no matter what channel.
Click here to read our special report on e-commerce today, complete with research from RSR.