Merchant Innovation

Home Depot's eCommerce Renovation Project

Home Depot's nest location is also it's largest and it is not a store - it's a distribution center.  While the hardware box retail giant has up until now pursued a standard brick-and-mortar course to domination in its industry, it is now pursuing a corporate renovation to more actively pursue the eCommerce consumer.

Home Depot will only open one additional store in 2014, but it will be opening two large-scale distribution centers in the U.S. this year.

"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," Home Depot Chief Executive Frank Blake said in an interview, reports The Wall Street Journal. "So the decision was made to stop opening additional boxes."

Online sales accounted for only 3.5% of the company's $78.8 billion of sales last year, but they are the fastest growing category of sales and so the company is investing, big time.  Home Depot will spend $1.5 billion this year for supply chain and technology improvements to link its stores and Internet business.  Home Depot also offers consumers the option to buy online, and pick up instore, as well as the ability to pay in-store with PayPal.

 

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