Home Depot Now Makes $5 Billion Online, but a Stellar Store Experience Remains Its Top Priority

How the retailer meets the changing needs of contractors and consumers

Home Depot intensely trains its associates, and even has executives don the orange apron to work Atlanta-area stores once a week.
Home Depot

Home improvement can be a challenging proposition, particularly if you don’t know a socket wrench from a round head ratchet.

Two retailers, The Home Depot and Lowe’s, have been helping consumers solve these problems for the past few decades, and they basically have the market cornered. In terms of brand perception, they’re neck and neck, ranking No. 8 and No. 5, respectively, on YouGov’s most recent survey of America’s best-perceived brands.

To stay on top of the industry, Atlanta-based Home Depot is focusing on a blended strategy, appealing to both construction professionals and the average consumer, while upping its ecommerce and in-store customer service game.

“Our goal is to help both professional contractors and average consumers solve problems,” said Kevin Hofmann, Home Depot’s CMO.

A dual message

For Home Depot, professional contractors make up just 3 percent of its customers, but generate 40 percent of its revenue. The key to the retailer’s success is helping professionals do their jobs efficiently and cost effectively while educating amateur home remodelers and tinkerers to help them build confidence.

For contractors, Home Depot offers cheaper bulk pricing, and sends them frequent updates on new product availability and product quantity.

Home Depot

“We have a much more intimate relationship with them,” Hofmann explains. “They don’t need a store map; they know our store. The marketing challenge there is more relational. It’s, ‘How are we helping them make money on their job?’ It’s more B-to-B versus B-to-C.”

For the rest of its consumers, who visit the store four to six times a year, their Home Depot runs are vastly different, not only from contractors, but from occasion to occasion.

“Sometimes they’re there to pick up paper towels or laundry detergent, other times they’re there because they’re doing a $30,000 kitchen remodel,” Hofmann said. “Trying to pick up those signals is a big challenge, and it’s a different type of message.”

More than 50 percent of Home Depot’s marketing spend is digital, including Google search, Spotify and Pandora ads, with the rest allocated to TV, radio and print.

“The contractors are heavy mobile users—they’re hardly ever in front of a tablet or PC, and they’re more interested in product features, specifications, price and if we have contractor-like quantities available,” Hofmann said. “The average consumer is engaging in once- or twice-in-a-lifetime purchases: granite versus quartz counter tops, figuring out what that means.” Thus, consumer-focused messages include home improvement tips and how-tos, while contractors focus on product specs.

Home Depot’s tagline, “More Saving, More Doing,” which its current agency, The Richards Group, debuted in 2009, appeals to both audiences.

“Our position is to be an everyday, low-price place,” Hofmann said. “You don’t have to wait for a sale or a gimmick. You know that you’ll find a great value. Our message to the marketplace is, Home Depot has the best brands and best products. We help you save time and money and turn a house into a home.”

At your service

Home Depot is one of the largest ecommerce retailers in the U.S., with online sales growing from $500 million in 2009 to $5 billion in 2016, including 19 percent growth in online sales in the fourth quarter of 2016. However, the retailer heavily focuses on the in-store experience and service, prepping its associates for the massive amounts of questions customers might have.

“You’re going to bring in a spark plug for your 1979 snowblower and say, ‘I need one of these.’ If the associate doesn’t know the answer to that, you’ll be disappointed,” Hofmann said. “Our associates need to be able to answer those questions, and we’ve extended that promise online, with 24-hour chats to answer questions.”