What Is Home Depot Doing To Ensure Continued Growth Online?

Ensuring a seamless and coherent integration of the online and offline channels is imperative for a retail company to survive these days. It is safe to say that Home Depot (NYSE:HD) is winning in the multichannel space, despite the looming threat of Amazon. In the first part of this series, we highlighted the need for Home Depot to concentrate on its integrated retail strategy. In the second part, we will detail the investments the company is undertaking to ensure it continues to grow its online revenues, while gaining market share, and remains in tune with its customers’ desires.

We have a $172 price estimate for Home Depot, which is below the current market price. The chart below has been made using our new, interactive platform.

1. Flexibility To Customers

In today’s day and age, it is imperative that customers are given the convenience to shop where they want and when they want. The increasing rates of internet penetration and a proliferation of smartphones have propagated the rise of online shopping, and businesses will not be able to survive for long if they don’t move along with the shift in technology. Furthermore, the flexibility should not end at the shopping stage; it also involves flexibility in fulfillment. This would mean that they should also be allowed to select where and how the delivery will take place. All of this requires considerable investments into the digital infrastructure, in order to handle the billions of visits the website receives, the millions of products on display, and to create a more personalized shopping experience. In this regard, Home Depot recently launched a new e-commerce system, which ensures the agility and scale needed to function smoothly.

2. Personalized Touch

Retailers are always looking to convince customers to make a purchase, by elevating their shopping experience and pushing them to become buyers. One way that can be done is by delivering relevant and personalized content. Customers today realize that the personalization they expect is based on rich data insights that go beyond just the purchase transaction. Hence, 54% of shoppers, including two-thirds of the millennials, are willing to share data regarding their preferences with a store or a brand in order to receive customized service. Moreover, 62% of shoppers, and 75% of millennials, would prefer retailers to provide product recommendations based on their purchasing history. For Home Depot, given its size and scale, it has a tremendous amount of data on its customers, with nearly 50 million households in its database active in the past 12 months alone. This provides the company a tremendous opportunity to better understand its customers. Keeping this in mind, the company has been able to tailor messages to different demographics, such as an aspirational message or information about its turnkey solutions to the affluent baby boomer, tips to save time and money to its Pro customer, and information on how to complete a home project to a millennial new homeowner.

3. Ease Of Use

Making all these investments will do no good if the customers are not able to understand how to use the system or if the process isn’t smooth. Shoppers are using all kinds of devices for their purchases, and hence, it is vital that the different channels work seamlessly, a factor that will also result in repeat customers. Home Depot has also provided voice-enabled and image search capabilities in its app to ensure an easy and convenient shopping experience. The company also has a feature in its app that allows shoppers to virtually try out products, such as to see how a piece of furniture will look in the user’s home. Home Depot also recently partnered with Google for voice-enabled shopping through Google Home.

See complete analysis for Home Depot’s stock

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

• Improving Housing Trends Bode Well For Home Improvement Companies
• How Is Home Depot Keeping Its Stores Relevant Amid A Changing Retail Landscape?
• What Is Home Depot’s Growth Strategy For the Future?
• Hurricanes Boost Home Depot’s Sales But Pressure Margins

Notes:

Get Trefis Technology