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Home Depot Inc. By canceling annual sales events and pulling many marked down goods from shelves to keep crowds away from stores, U.S. In response to the rapid spread of Covid-19. But between the lockdown and the social gap, instead of a reduction in traffic, consumers were flocking to its physical and stores online stores, spending home-saving savings and investigating government stimulus on home improvement projects.
In August, the Atlanta-based company recorded its strongest quarterly sales growth in nearly 20 years, with revenue for May-July up 23% to 38 38.1 billion, compared to the same period in 2019.
Home Depot Chief Information Officer Matt Carey said digital technology was needed to meet that rush. Mr. Carey and his team quickly developed mobile applications for curbside-pickup services and real-time inventory-tracking software, among other tools. “It was like Black Friday every day,” he says of the unexpected run.
Mr. Carey spoke with The Wall Street Journal about Home Depot’s efforts to bring its technology into place and how it is handling the boom in business. Here are the edited quotes from the discussion.
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The first step
WSJ: Hardware stores were declared an essential service. But how did you keep the stores open?
Mr. Care: We went to limit the crowd very early. Within 24 hours, we had an app configured, running in the cloud, allowing our collaborators to control the crowds coming in and out of stores. You have a person who has a hand-held device in front of the store. One customer goes in, you add them, and one comes out, you subtract. Nothing high tech, but it worked.
WSJ: What have you learned, and what will you do differently?
Mr. Care: Over the last few months we have been given a wealth of customer feedback, in the narrowest timeframe related to the digital capabilities it has offered us. Take our curbside rollout, for example. We started with a very tedious, manual process where the customer arrives at the store after placing an order online, informs an associate of his order number and then the associate retrieves the order. Associates were actually making handmade signs, saying, “Curbside shop, park here.” We were able to introduce advanced features very quickly. Today’s experience is now fully embedded in our app – customers can also opt for location-based alerts that let the store know they’ve arrived to place an order.
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Digital experience
WSJ: Store What was happening at the online store?
Mr. Care: Our business grew significantly in the online business. Because we had previously invested in moving that platform to the cloud, it went very smoothly without any problems and we continue to manage that volume without any problems.
The great thing about the cloud is that you don’t have to order the hardware, you don’t have to bring it to your data center, just set it on the data-center floor and wire it up. Obviously, there is lead time. It is very clear that we would not have been able to cope with the experiences we have had on the online platform if we had hosted it ourselves.
WSJ: What is an example of how software helps online customers get what they need for the project they are planning?
Mr. Care: When a customer searches for a term like “fence” or “fencing”, we will return a series of results based on the different fence requirements they have. For example, within a few clicks, we can determine if the purpose of the project is to install a wooden fence for the yard, and we will provide the customer with instructions for additional tools and materials to complete the project. Instructions may include guidelines for installing concrete for footings, hinges for gates, and backyard fencing.
WSJ: How did you control the impact of the epidemic on logistics?
Mr. Care: U.S. In the supply chain in general, finding only drivers and trailers was a challenge. Ensuring we could get products at stores, many of them had human resources, needed staff. But we also had a new distribution center that was to come on line. In two weeks, the building was used to become a fulfilling online fulfillment center, helping to fill volume off from other fulfilling fulfillment centers. The flexibility of our software allows us to do that.
Essentially, what we did was make the market-delivery center a home pick-up pack and ship center at home. It was a bulk distribution center and needed a whole different software stack. You are not planning routes to fulfillment centers. You are forwarding packages to UPS and other home-delivery carriers. As a result, customers were not experiencing the long lead time that they were from competitors.
WSJ: How are you able to help self-improvement?
Mr. Care: We have a home-measurement service, whether it’s carpets or other products. We want to be able to stop how we want to be engaged with the customer. If they want to order an online sample, we want you to get it. We can help you figure out how many bolts you may need. We have a tool to calculate how much it will cost to buy a new counter ops. All the things that help you evaluate a project. Anything that eliminates friction that prevents the customer from doing any work also connects them to the professional. We have these online online services.
To connect the customer with the product they are looking for, we use AI. And using the process of natural language. In some cases they don’t know what to ask.
WSJ: How are stores looking at their customer transformation? Are more beginners struggling?
Mr. Care: We are seeing customers take up extended projects in their homes, in turn, creating additional activity in the store. We are seeing their confidence grow after completing their first DYY project – it could be a garden, it could be painting. With confidence, we see them advancing to the next project, which increases in complexity, such as installing ceiling fans or light fixtures.
WSJ: How has this crisis permanently affected the way people buy home products?
Mr. Care: In many ways, how Covid buys customers has changed fundamentally. For many customers, HomeDepot.com or the mobile app store is the new front door. Our digital sales have grown by almost 100% in Q2, with 60% of sales being taken to our stores.
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Maintain sales
WSJ: How does Home Depot plan to keep epidemic-related home improvement growth? How do you keep people in your stores, not yours? And once people are able to leave their home, do you expect a reduction in interest in home improvement? If so, how can you win them back?
Mr. Care: We continue to invest in capabilities that make it easy for customers to choose, whenever and wherever they want to shop with us.
WSJ: How has the epidemic affected elderly and retired workers, and are any additional measures being taken for their safety?
Mr. Care: We’ve taken a number of steps to protect partners, including closing off additional payment times, new features and new features at our facilities. For at-risk associates, whether they are 65 or older or those who are considered to be at high risk due to an existing health condition, we are offering up to 240 hours of overpayment time. [by the end of the year] For full-time collaborators and for part-time 120. This additional payment can be taken at any time and will be paid at the end of the year if not used.
At all stores, we have installed heavy-duty protective shields that were built specifically for home depots. By the end of our second quarter, we were in a covid related advantage for associates. Has invested more than 1.3 billion. We also recently announced that in order to avoid running high traffic volume on stores for just a few days, we will extend Black Friday deals for two months during the holiday shopping season.
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