The Home Depot Inc.’s online sales grew by 23% to about $1.23 billion during its fiscal fourth quarter ended Jan. 31. For the full year, online sales were $4.7 billion, an increase of 25.7% from $3.74 billion during the previous 12-month period, said Carol B. Tome, chief financial officer and executive vice president, corporate services during a Q4 earnings call, according to a transcript of the call from Seeking Alpha.

The company says 35% of total sales are to its Pro customers, Home Depot’s term for contractors and other business customers. The company doesn’t break out how many of its Pro sales are online. But sales to Pro customers outpaced sales to consumers in the United States during Q4, Tome said.

This growth in B2B sales is reflected by the double-digit growth in such Pro-heavy product categories as siding, electronic circuit protection, fencing, fasteners, roofing, exterior doors and pneumatics, or air-powered tools like staplers and nail guns. Company executives say they’re taking several steps to build sales to Pro customers, including expanding product lines and services and fulfillment operations, and establishing a new organizational structure that combines products and services for remodeling contractors and businesses. Those are among the customers served by Home Depot’s expanding business in offering products in the category known as maintenance, repair and operation, or MRO.

In July 2014, Home Depot completed its $1.62 billion acquisition of Interline Brands Inc., a national distributor and direct marketer of MRO products. The company is helping to build Home Depot’s position in MRO sales to business buyers both in store and online, CEO Craig Menear.

During the quarter, the company saw double-digit growth in such MRO products as pumps, security lighting, water heaters, electrical tools, construction adhesives and ladders. “Cleaning, bath fixtures, door locks and pipe and fittings also had comps above the company average,” said Edward Decker, executive vice president, merchandising. Home Depot finished integrating the Interline operations into its business during Q4, and has taken significant steps to get rid of the overlap of its suppliers. “We have reduced redundancy in the business and now we’re really getting into more of the focus on the sales side of it, and the sales driving initiatives,” Menear said.

advertisement

Interline also operates more than 10 specialized websites including Amsan.com and Sexauer.com, serving institutions; Wilmar.com and e-Musa.com serving multi-family housing facilities; and e-Barnett.com and e-HardwareExpress.com, serving residential customers. Over time, those websites will be integrated into Home Depot’s main website, HomeDepot.com.

For the year, Home Depot set a record with the more than 1.5 billion total transactions. In the quarter, comp ticket size increased 2%. Transactions for tickets over $900 in the fourth quarter represented approximately 20% of Home Depot’s U.S. sales, up 11.9% from this time last year.

Also helping to drive up Q4 total sales was an increase in big-ticket purchases, including household appliances, roofing and special-order kitchens, and related installation services. “Our customers took advantage of the milder weather and were able to complete more outdoor projects,” Decker said. “For example, we saw double-digit comp sales in pressure washers, hardscapes, mowers, outdoor power, concrete and pressure-treated decking.”

Home Depot didn’t clarify how much of these big-ticket items were purchased online, but it said it plans to further drive online sales through enhancements in its site search, product photography and videos, and by continuing to invest in mobile commerce. About 50% of visitors on HomeDepot.com reach the site through a mobile phone or tablet, the company says. Monthly visitors to HomeDepot.com total approximately 103.2 million according to SimilarWeb, a company that tracks web and mobile traffic

advertisement

“Key things driving online growth are great mobile experiences, and great end-to-end interconnected experiences,” says Kevin Hofmann, a corporate senior vice president who is also and president of online operations. “Our focus is not just the online transaction—over 40% of our online orders actually end up in the store in some way, shape or form. A lot of our online experiences are really about tying the customer back to the store side of the shopping journey. And when we look at the total enterprise conversion rate, we’re just very, very pleased with our progress there.” He declined to specify on the call today Home Depot’s exact conversion rate of customers who visit the site and then go on to complete a purchase.

Home Depot’s buy online, pick up in store and buy online, ship to store offerings have a large part to do with the merchant’s online sales success, Menear added. These initiatives are popular among business customers who often are working at construction sites where they can’t take delivery of items they need. More than 40% of online orders are picked up in stores. “This is a testament to the power of our interconnected strategy,” Menear said.

In 2016, the company plans to expand its buy online, deliver from store initiative beyond the 108 U.S. stores that currently offer the program. Home Depot operates about 1,900 stores in the United States. Customers will have the option of selecting a two- to four-hour delivery window of products ordered online through this service for an additional fee.

Home Depot was named the 2015 Internet Retailer of the Year at this year’s IRCE Awards, which recognized several merchants for the success in e-commerce. Home Depot is also No. 11 in the Internet Retailer 2015 Top 500 Guide, which ranks companies on their annual web sales.

advertisement

For the fourth quarter ended Jan. 31, 2016, Home Depot reported:

  • Net sales of $21 billion, up 9.5% from $19.16 billion during the same time last year;
  • Companywide comparable-store sales up 7.1%;
  • U.S. comparable-store sales up 8.9%;
  • Gross profit of $7.16 billion, up 8.7% from $6.58 billion;
  • Net income of $1.471 billion, up 6.7% from $1.379 billion;

For the 2015 fiscal year ended Jan. 31, 2016, Home Depot reported:

  • Net sales of $88.52 billion, up 6.4% from $83.18 billion during the same time last year.
  • Gross profit of $30.27 billion, up 6.6% from $28.39 billion during the same time last year.
  • Net income of $7.009 billion, up 10.5% from $6.345 billion.

Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web— Media LLC, which also publishes the monthly business magazine Internet Retailer. Follow Nona Tepper, associate editor for B2B e-commerce, on Twitter @ntepper90.

Follow us on LinkedIn and be the first to know when new B2BecNews content is published.

advertisement
Favorite