The Home Depot and their bulletproof manual against the Apocalypse

19 Dec 2017
The Home Depot is the world's largest retailer of home and DIY products. It is one of the two players (the other is their famous competitor Lowe's) in the sector to appear in the rankings of the top 50 international retailers. The company has around 400,000 associates and over 2,200 sales outlets in the United States, Canada and Mexico. Innovation is the distinguishing feature of The Home Depot's history, which began in 1979 in Atlanta. In fact, the first two stores took up a space of almost 6000 square metres, much more than any hardware other hardware store at that time and supplied almost 25,000 products. Today, the typical Home Depot store covers an area of ​​just under 10,000 square metres (entirely indoors) on average. The two-year period of the 2008-2009 financial crisis also hit The Home Depot, when it suffered a sharp decrease in sales. In the following years the difficulties of American distribution increased exponentially until they were included in the infamous "Retail Apocalypse". The measures taken by the management, however, have revealed a veritable manual for the defence of the company. Stores were improved (instead of opening new ones) and significant investments were made in digital commerce and employee training. In the following years, sales increased by an average of 6%, a rate that no large retailer succeeded in obtaining, with the sole exception of Costco Wholesale. They have enjoyed eight years of continuous growth and a clearly bucked the trend of nationwide suffering in the sector. The Home Depot ended the 2017 fiscal year with a turnover of $94 billion, compared to $83 billion in 2015 (+13%) and projects to close this fiscal year (January 2018) with $100.6 billion. They are forecasted to achieve $120 billion by January 2021. This should be possible thanks to the counter moves planned by The Home Depot against a predictable slowdown in the national economy: over $11 billion will be invested over the next three fiscal years. The focus will be on improving check-out at the tills, delivery times to the customer, the entire supply chain, new and advanced planning methods and the competitive adjustment of salaries for store clerks. It is interesting to note that in the last year The Home Depot has grossed $6.5 billion online, making it the fourth largest e-commerce player in the United States. And the next step will be a business-to-business site for professional customers (a very different target from private DIY customers), whose business is growing faster than the average. CEO Craig Menear was clear: "The front door of our store is no longer at the front door of our stores. It's in the customer's pocket."