Here's How Home Depot Is Meeting the Evolving Needs of Contractors and Consumers In-store
It may be one of the largest and fastest-growing ecommerce retailers in the US – online sales grew from $500 million to $5 billion between 2009 and 2016 (with another 23% surge in Q1 2017) – but delivering an unbeatable in-store experience remains the top priority for Home Depot.
Ranking No.9 on YouGov’s most recent survey of America’s best-perceived brands, the home improvement supplies retailer has two distinct customer bases that it needs to impress to keep its well-built reputation intact and sales high: construction professionals and everyday DIY consumers. As Home Depot’s CMO Kevin Hofmann puts it: “Our goal is to help both professional contractors and average consumers solve problems.”
Upping its in-store customer service game is the primary focus in achieving this goal. But in an increasingly connected world, Home Depot knows the importance of omnichannel, and that nearly all of its customers – be they professionals or otherwise – are engaging with the brand online and on mobile. The aim, then, is to deliver what Home Depot’s Vice President of Direct Fulfilment and Delivery Stephanie Smith calls an “interconnected retail experience”.
“Omnichannel is really how a retailer looks at the supply chain, but interconnected considers how we want consumers to see our environment,” explains Smith. “Home Depot seeks to integrate the store experience and the online experience from a customer perspective.”
Know Your Customer
To do so, the retailer must understand the key differences between its two main types of customer. Professional contractors make up just 3% of Home Depot’s customers, yet generate some 40% of its revenue. The key to servicing this cohort, says Hofmann, is through building professional relationships and engaging them through the most appropriate channels.
“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 says. “We have a much more intimate relationship with them. 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.”
As such, Home Depot offers cheaper bulk-order offers for contractors, and keeps them in-the-know of product availability and quantity via mobile notifications.
Convenience and Value Brings Them In, Service Brings Them Back
But for the everyday consumer, the relationship is different – and so the communications are different. While contractors get the most out of content that focuses on product specs, consumer-focused messages include how-tos and home improvement tips. And consumer store-visits are different, too. Typically visiting a store between four and six times a year, each run – and indeed each customer – is distinct. “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,” says Hofmann. “Trying to pick up those signals is a big challenge, and it’s a different type of message.”
To make sure Home Depot delivers this message, and that the customer relationship stays at the forefront of the retailer’s mind and strategy, executives don the iconic orange aprons and put themselves on the frontline in Atlanta-area stores once a week without fail. They shadow employees and serve customers, seeking first-hand knowledge of what it takes to keep winning the hearts and minds of the modern consumer.
“You learn so much in the aisles,” Hofmann says. “We’re trying to walk in the shoes of our front-line associates, because that’s our differentiator. There are lots of places you can buy a drill. We want you to come to us because we’re not just interested in the transaction, but in the relationship and in your lifetime purchase behavior. The holy tenets of retail are convenience, selection, value and service. Convenience, selection and value tend to get people in, and service is what brings them back.”
Blending the Physical and Digital World
Today, however, service must be continuous and stretch beyond the four walls of a bricks-and-mortar outlet. As ecommerce has grown in importance for Home Depot over the years, the retailer has gradually expanded its interconnected and omnichannel strategy to incorporate more and more convenient pick-up and return options for its customers. It began in 2011 with buy-online-return-in-store (BORIS), and then added buy-online-pickup-in-store (BOPIS), as well as buy-online-and-ship-to-store (BOSS). In 2016, the buy-online-deliver-from-store (BODFS) option was added.
For omnichannel to be successful, Smith explains, “You need a vision of where you want to be and then it’s really an evolution. Customers want to shop the way they want to shop and when they want to shop, and they want to get a product when they want to get it. It’s all about offering a variety of options for the customer, whether that’s going and picking up things in the store that the customer ordered online, purchasing things online and having them delivered directly to your home, or shipping from the store.”
But for Home Depot, omnichannel is a big part of not just the online experience, but – and perhaps more importantly – the in-store experience as well. The retailer knows it must appeal to customers online and on mobile, but it is within the store where real relationships are built. The two are inherently connected, however.
For instance, Home Depot has recently added new AR (augmented reality) features to its mobile app that allow customers to see how products will look in their homes – different colored paint on the walls, for example, or different fixtures on countertops.
(Image source: virtualrealitytimes.com)
However, according to Hofmann, it’s not necessarily direct sales that such innovations engender, but loyalty – and that’s driven in-store. “One of the biggest barriers for consumers is visualizing, so we’ve blended the physical and digital world,” Hofmann says. “We’re solving the challenges of home improvement with digital tools: knowledge, know-how, buying guides, expertise. It may not result in an online transaction, but it results in a more confident, knowledgeable consumer in the store, buying paint. People are more likely to buy paint from a place if they can say, ‘they helped me out.’”
Consistency Is Key
The Home Depot mission is clear – to make customer service the most important part of the whole brand experience, and nowhere is that experience more crucial than in the store. Everyday consumers, DIY enthusiasts, and professional contractors all get their experience customized at Home Depot, no matter what channel they use to engage with the brand. But even though everyone who walks through the doors is different, the overarching message is consistent throughout, and the importance of building personalized relationships remains at the heart of everything that Home Depot does. Indeed, when all’s said and done, knowing exactly who its customers are and how best to serve them is what keeps Home Depot as one of America’s top best-perceived brands.
The last word goes to Kevin Hofmann. “We’ve been gifted with a valuable, well-regarded brand, so we want to stay true to it. We’re distinctively orange, and we have a blue-collar vibe: it’s cool to have paint on your jeans and smell like sawdust. That’s a big part of what we think about every day.”