How Is Home Depot Keeping Its Stores Relevant Amid A Changing Retail Landscape?

There has been a consistent shift from the brick-and-mortar to the online space in recent years, and companies have had to keep pace with the resultant change in expectations. While Home Depot (NYSE:HD) has made a considerable effort in developing its omnichannel strategy, to deliver a seamless connection between its web and store presence, the core of the Home Depot experience is its stores. Hence, the company has made a substantial investment to keep them relevant, by improving the speed and convenience of a customer’s shopping experience, besides investing in capabilities to drive productivity and ensuring the timely availability of its products. While the customers are leveraging the company’s website, the stores remain a key part of the Home Depot’s growth strategy. The company has stated that “90% of the US population lives within a 10-mile radius of a Home Depot store.” Furthermore, 45% of online orders are picked up in the store, and 85% of online returns are completed in the store, reflecting the importance of its physical storefront. The home improvement retailer has instituted a number of initiatives to keep its stores relevant, some of which have been listed below.

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1. Customer Navigation

One of the biggest problems the customers face, that discourages them from shopping at a physical store, is related to navigation. To alleviate this pain for customers, Home Depot has started its Wayfinding initiative, which is aimed at improving the experience through more intuitive signage and better lighting. The company also has 3-D maps of its stores in its app, which enables customers to locate exactly where a product is located within a store. The company also provides real-time inventory of its products in its app, along with an ability to search for items by image, text, or voice. Such features make it easy and simple for shoppers to find the merchandise they are looking for, without the aid of a store associate. The company has noted that its customer service scores in the category ‘easy to find’ improved 30% with the implementation of the new navigation initiatives.

2. Checkout Process

Another problem the customers face is related to the checkout process. In this regard, HD has piloted a redesign of the front area of its stores to aid customers in getting in and out faster. Self-service kiosks have also been placed towards the front of certain stores to ensure customers who have come to pick up their online orders can do so without stopping by the service desk. This initiative has been implemented to drive speed and convenience among customers. Home Depot has stated that its scores regarding check-out time satisfaction and ease of online order pickup have both increased by 200 basis points, while its order pickup time has witnessed a 17% reduction. Given this massive improvement in just the pilot results, it would not be a surprise if these initiatives help to drive customer satisfaction as the company rolls them out over the next three years.

3. Product Availability

Customer service starts with providing them the desired product, which stems from the item being available in the store and on the shelf. This highlights the importance of freight-handling, which has to be done keeping in mind customer service, as well as productivity. The company has rolled out a number of steps, including Smart Sort, Manual Floor Load, Engineered Unload, and Directed Packout, all aimed at seamlessly moving the freight from the receiving area in the back of the stores to the shelves. With the implementation of these initiatives, the company has been able to achieve a 10% reduction in packout time, and a 30% reduction in time spent looking for products in the overhead areas. Home Depot aims to continue to evolve its end-to-end processes within the store to adapt to its ever-changing supply chain and delivery capabilities.

4. Investing In Associates

Associates are the ones that drive the customer experience, and hence, maintaining a competitive, agile, and knowledgeable workforce is a key priority. However, at present, the associates use up to ten different systems to sell and manage orders across the various product categories, which requires extensive associate training and increases the customer wait times. In this regard, the company is implementing a system called Order Up, which consolidates all the different systems into one interface that is easy and intuitive for the associates to understand, and requires minimal training. Early results of this have shown a reduced customer transaction time by 35% to 50%, again delivering convenience to the shoppers. Moreover, a reduced learning time for associates means a greater amount of time spent in aisles engaging customers to drive a better experience. Home Depot has also implemented a new workforce management tool which aims to improve associate flexibility, by enabling them to swap schedules, work at multiple locations, and view their schedules from their mobile device.

Have more questions about Home Depot? See the links below.

• Improving Housing Trends Bode Well For Home Improvement Companies
• Home Depot: Winning In The Multichannel Space
• Hurricanes Boost Home Depot’s Sales But Pressure Margins

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