Digital commerce is surging at the Home Depot Inc., and CEO and president Craig Menear attributes much of that to the retailer’s omnichannel efforts—or what he calls Home Depot’s interconnected retail strategy. 50% of online orders are picked up at a Home Depot store, Menear said in an earnings call on Tuesday, according to a transcript from Home Depot
“We believe that the front door of our store is now on the customer’s pocket,” Menear said, referring to mobile commerce. “It’s on the job site that most of our customers’ shopping experience actually starts in the digital world, even if it finishes in the physical world.”
Fiscal 2018 included an extra week of operations compared with fiscal 2019. Excluding the extra week in fiscal 2018, the home improvement retailer, No. 7 in the 2019 Digital Commerce 360 Top 1000, grew online sales 20.8% for its fiscal Q4 2019 ended Feb. 2. Digital sales grew 21.4% for all of fiscal 2019. The retailer did not release ecommerce sales figures, but said digital is a bright spot for the merchant.
“Home Depot.com continues to be a growth engine for our overall business, driving increased traffic online and additional footsteps to our stores,” Menear said in the earnings call. “Because of this, we continue to invest in search functionality, category presentation, product content and enhanced fulfillment options to remove friction from the online shopping experience.”
The retailer experienced “significant growth” in its online-only, home decor category, which it calls HD Home. And, further bridging store and web, Home Depot also rolled out digital appliance labels during Q4 that enable shoppers to access online reviews of appliances while shopping in stores.
“We think that our digital business continues to be an engine for growth, both in the digital world and in the physical world,” Menear said.
To better meet the needs of its big-spending pro or business customers, such as contractors, Home Depot invested in a B2B portal during the quarter. The retailer says it now has more than 1 million pro customers. Also during the quarter, it completed the integration of an internal customer relationship management system for all its pro sales and services teams.
“This enhances our visibility, enabling us to better serve our customers,” Menear said. “I am excited about the opportunities ahead as we continue to build capabilities to engage with the Pro, no matter when, where or how they want to interact.”
Total sales for the fourth quarter of fiscal 2019 totaled $25.78 billion compared with sales of $26.49 billion in the fourth quarter of fiscal 2018. The extra week of operations added approximately $1.7 billion of sales to the fourth quarter of fiscal 2018, Home Depot says. With those adjustments, Q4 sales grew 4% year over year.
Sales for fiscal 2019 grew 2% to reach $110.22 billion, up from $108.20 billion a year earlier.
“Although recent investments have put pressure on margin performance, Home Depot is responding to the customers need for a more seamless shopping experience between channels—online and in-store,” says Kelly Lynch, retail solutions manager at ActiveViam, a data science provider for retail and financial brands. “Home Depot understands that the customer shops online and expects a convenient and easy experience in-store. The company needs to continue to leverage its data from cross [channel] shopping customers to optimize local pricing and product preferences.”