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Home Depot's DIY project: online sales

Home Depot Inc. is setting out on its own fix-it project. The mecca for do-it-yourselfers is trying to figure out how to turn itself into an ecommerce company.

Selling online isn’t much of problem if you’re hawking books, T-shirts or even digital cameras. An order comes in, the items are put into a box and shipped off. It’s not quite so simple when selling cabinets or windows.

The company expects to spend $1.5 billion this year to help set up systems to take online orders and deliver the products. Home Depot opened a fulfillment center outside Atlanta in February, the first of three centers. The distribution centers will increase the number of orders the company can ship the day they are received. The centers also stock about 100,000 products compared with 35,000 available in a typical Home Depot store.

“This is a significant investment in our ability to say yes to customers with confidence,” senior vice president Mark Holifield said. “Yes, you have access to our entire inventory to fulfill your order. Yes, you can expect a speedy delivery. And yes, you can rely on information updates about your delivery.”

With its focus online, Home Depot is expected to open just one store this year.

“The retail model forever was to increase sales through opening additional units, but as you added stores to a finite group of households, each store becomes less profitable,” chief executive officer Frank Blake told The Wall Street Journal. “So the decision was made to stop opening additional boxes.”

Home Depot lumbers into e-commerce (Wall Street Journal)

Home Depot puts a lid on new-store openings (Reuters)