In-Store Pickup Now 35% of Home Depot M-Commerce Sales

By Adam Blair
Home Depot has devoted significant resources to closer integration of its store, online and mobile channels, and is beginning to see results. Buy online/pick up in store now represents 35% of the retailer's mobile sales, and Home Depot plans to expand customers' digital purchasing options further with the addition of buy online/ship-to-store functionality later this year. The retailer also continues to "expand the breadth of SKUs available online," said CEO Francis Blake during a recent conference call discussing Home Depot's Q2 financial results.

While acknowledging that buy online/pick up in store still represents only a fraction of Home Depot's digital sales, Blake noted that it has exhibited a strong growth rate. In addition, "it's important directionally for us because we really do believe if you look out over the next five to 10 years that interconnecting the virtual physical presence is going to be a key differentiator," he added.

Home Depot has been working to link back-end systems across its channels. "Organizationally, we had integrated online and in-store data, pricing analytics and product line review teams along with our merchant teams," said Blake. "This may not sound significant, but it's a key step in driving our own interconnection, as those teams are now responsible for thinking through the full customer experience regardless of whether it begins in the store, on the computer or on the smartphone."

While digital sales only account for 2% of Home Depot's total sales, executives see the value in cross-channel investments. "We do view this as total commerce because there are many projects that actually start online and actually complete in-store," said executive vice president of merchandising Craig Menear. "We've made some significant investments in our online business. We upgraded to WebSphere 7 – a big effort behind that, it improved speed dramatically for our customers as well as features that allow the customer a better shopping experience online overall."

Home Depot has also opened a new call center in Utah to support its interconnected business, with plans to open another in Georgia during Q3. "We've also begun the development of new distribution centers to support direct-to-consumer fulfillment and expect to complete this effort over the next two years," said Blake.

For the quarter that ended July 29, Home Depot's sales of $20.6 billion represented at 1.7% increase over the same period the previous year. The retailer's comp store sales increased 2.1% overall, with U.S. stores showing a 2.6% gain.

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