The Home Depot Inc. had a good second quarter, but its performance really hit home with sales to its business “Pro” customers.
Total sales in the second quarter ended June 30 increased 6.5% year over year to $43.8 billion, as net earnings increased 8.3% to $5.2 billion.
“In the second quarter, we delivered the highest quarterly sales and earnings in our company’s history,” president and CEO Ted Decker said on a Q2 earnings call, according to a transcript from The Motley Fool. But sales through the retailer’s digital channels grew at almost twice that rate, increasing 12%, he added.
“We also saw record downloads, traffic, and sales via our mobile app,” Decker said.
The Home Depot Inc. ranks No. 4 in the 2022 Digital Commerce 360 Top 1000 database. The Top 1000 ranks North American e-retailers by web sales.
Investing the fast-growing Pro channel
A major part of that digital growth is through the company’s B2B Pro channel of selling to professional home improvement and other contractors, a market Home Depot has been focusing on with ongoing improvements to its commerce and service capabilities.
“For the Pro customer, we continue to invest [in our] ecosystem of capabilities, including enhanced fulfillment, more personalized online experience, as well as other business management tools to drive deeper engagement with our Pro customers,” Decker said.
“During the second quarter, both Pro and DIY sales growth was positive, with Pro outpacing DIY,” he added.
Home Depot doesn’t break out online B2B sales but says that Pro customers produce more sales compared with consumers.
“The customers that are logged into our B2B experience online outperform pretty significantly the customers on our consumer site,” said Jordan Broggi, senior vice president of finance.
New Home Depot B2B website features
Home Depot is relying more on digital technologies to improve the B2B customer experience. It wants to improve both self-service ecommerce and interactions with sales reps, including many recent developments.
“In May, we launched new capabilities on our B2B website to enhance the interconnected shopping and quoting experience for our Pros,” Decker said. “In the past, our website was not integrated with our ordering and quoting systems. So, an associate could not seamlessly modify an order if a customer had questions or changes before placing the order. Our new interconnected capabilities remove friction for both Pros and associates, allowing them to collaborate on orders both in-store and online.”
“We’re starting to increase the size of the sales force, our quoting capabilities and integration of our B2B website,” he added. “All of this is really coming together to drive what is that incredibly strong Pro and larger Pro comp” sales.
Moreover, sales to Pros coincide with larger transactions.
“Big-ticket comp transactions for those over $1,000 were up 11.6% compared to the second quarter of last year,” said Jeff Kinnaird, executive vice president, merchandising. “We saw big-ticket strength across many Pro-heavy categories like pipe and fittings, gypsum, and fasteners.”
In another reference to its growth in B2B sales, both online and offline, Decker said Home Depot’s acquisition early last year of industrial supplies distributor HD Supply was proceeding smoothly.
“We couldn’t be happier with the HD Supply acquisition,” he said. “That integration is going incredibly well on product catalog, on customers, and sales force integration.”
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