How Home Depot grew to be the online leader for a difficult product category
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How Home Depot grew to be the online leader for a difficult product category

It would appear that Amazon is the dominant brick-and-mortar store trying to enter the ecommerce market. However, a closer inspection reveals that some retailers succeed and even win in this new environment with increased competition.

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How Home Depot grew to be the online leader for a difficult product category

It would appear that Amazon is the dominant brick-and-mortar store trying to enter the ecommerce market. However, a closer inspection reveals that some retailers succeed and even win in this new environment with increased competition. They are outsmarting the ecommerce giant in their way. Home Depot is one example of such a retailer.

The digital advancements of Home Depot, the largest home improvement retailer worldwide, deserve to be acknowledged. Home Depot's bright orange logo and large warehouse-like stores are what make it most famous. Although the progress was not celebrated as much as Amazon's, it speaks for itself. The digital sales of Home Depot have increased by an astonishing 762% in the last six years. Amazon's North American market product sales increased by 490% in the same time frame.

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A challenging category

Understanding the Home Depot home improvement industry is key to understanding Home Depot's accomplishments.

Home Depot is a massive store with a wide range of products. The company stocks over half a billion individual products. There are over 7,000 variations of screws. Many of them are highly technical. These are products that are not common and are bought instinctively by consumers.

Home improvement is the most challenging retail sector to shop in. It can be not easy to buy even for the most dedicated DIY enthusiasts because of the innumerable options and unknowns. This is possible because consumers can shop in stores. Customers can access expert advice instantly and inspect the products in person to determine if they're right for them. These benefits are not available when shopping online.

The downside to ordering online is the slow delivery of products, hefty and difficult to ship. Customers who are home-improvement professionals often need their products quickly, especially if they have to make urgent repairs or complete a project in a short amount of time.

These are the main reasons that DIY product sales have slowed compared to other retail sectors.

The Home Depot difference

Home Depot is an exception to the general rule that online has not been a good place for home improvement. The company's impressive e-commerce growth means that online sales now make up around 6.4% of its total revenue. Home Depot's success is due to two main factors:

  • An omnichannel strategy that leverages online and offline
  • Constant investment in and improvement of the online experience to make shopping easy and intuitive

Omnichannel is critical

Although some people see stores as a problem in an age where retail is increasingly online, Home Depot discovered that its 1,980 locations across the United States are a significant asset in its quest for growth online. These stores have helped it to overcome many of the challenges associated with selling DIY online.

One example of such a problem is the need to deliver products immediately after they are placed online. The solution for pure-play digital entrepreneurs is to build significant warehouse capacity and use expedited shipping options. Both options are not economically viable for low-value home improvement products that are often used.

Home Depot decided to make its stores warehouses for online stock and then collect online orders from them. Although this idea is simple in concept, it wasn't easy to implement. It required a complete overhaul of all systems to ensure that inventory could be managed across the entire business. This required changes in store management and operations. Staffing adjustments were also necessary. Also, it is essential to reevaluate stock requirements and give more storage space to online orders.

Today, Home Depot collects 43% of its online orders in-store and returns more than 90%. The company wouldn't be able to complete many of its online transactions without connecting to brick-and-mortar. This is something digital competitors like Amazon will struggle to copy.

Some Home Depot locations offer an online delivery service that takes 2 to 4 hours for those who don't want to go to a store. This service is impossible to replicate by non-specialist retailers of home improvement products.

Online ease

Home Depot has made continuous online investments that have enabled it to build a website and mobile platform that are easy to navigate and use.

A lot of information is shared with customers for each product that they purchase online. The report can be as simple as a bullet-point description or as detailed as a specification table. Additional information can be found in the reviews, interactive questions, answers and side-by-side comparisons.

Although such detailed information is necessary to guide customers through the vast array of products offered by Home Depot, it can be overwhelming. It is easy for users to quickly navigate their desired areas without cluttering up their screens with too much information.

The website informs, inspires, and teaches consumers with video instructions for all kinds of DIY projects.

The https://digitaleguide.com website is much more than just a place to shop. It is an immersive experience that encourages creativity, planning, and research. These are essential home improvement elements, and Home Depot quickly became the preferred online destination for DIY customers.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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