Whether it’s a 25-pack of 3 in. galvanized common nails that can fit in the palm of your hand, or an iron-forged 819-pound riding lawn mower, The Home Depot Inc. needs to fulfill orders for customers who want these items shipped to their homes or want to find it in store.
“That means logistical and fulfillment challenges,” says Angie Brown, senior vice president of technology.
These challenges are evolving as consumer shopping patterns change, Brown says. Currently, Home Depot is experiencing a “minor shift” from buying online, pick up in store, to buying online and shipping to home.
Angie Brown, senior vice president of technology, Home Depot
“But that’s a positive,” Brown says. “As we’ve invested in the supply chain and gotten things out faster, we see this minor shift as an advantage. It’s a testament to the faster you can get things to customers, the more they’re going to take advantage of [ship to home].”
Consumers want convenience, and they don’t want to wait long. According to Digital Commerce 360 and Bizrate Insights omnichannel survey of 1,069 online shoppers in February 2023, half of survey respondents (48%) said they used BOPIS or curbside pickup to save time or for convenience (47%). 34% ordered to pick up in store to avoid waiting for home delivery, and 32% wanted the product the same day.
Home Depot ranks No. 4 in the Top 1000, Digital Commerce 360’s database of the largest North American online retailers by web sales.
Building a supply chain to manage inventory
Home Depot relies on a network of approximately 150 supply chain facilities/vendors to meet demand. The merchant also fulfills online orders from its 2,300 store locations in North America.
According to Home Depot’s fourth quarter 2022 earnings call on Feb. 23, the merchant fulfilled 45% of its online orders in store. That’s down from 50% the prior quarter.
“What is driving that?” asks JC Jammal, vice president, online and marketing technology. He says Home Depot’s continued investment in the supply chain network has driven down the time it takes to ship orders to customers’ homes.
“You may have not wanted to wait three days for something. We can get it to you tomorrow — you might be willing to wait one day,” Jammal says. “More customers are opting in to that option if they don’t have another need to go into the store.”
Home Depot manages this network with its home-grown predictive modeling software.
“This allows our replenishment teams to direct the product to the areas with the most demand,” Brown says. As the artificial intelligence machine learning software learns, its predictive capabilities improve.
Stocking products closer to customers costs the merchant less for last-mile delivery, Jammal adds.
JC Jammal, vice president, online and marketing technology, Home Depot
Using mobile to connect in store and online
Another way shoppers’ behavior is changing is how they shop. Brown says more Home Depot shoppers are choosing to shop online using their mobile devices to visit HomeDepot.com or via the Home Depot mobile app.
The app allows shoppers to get more product information without the help of a store associate when shopping in person.
“Now, I can scan that product and get that additional information,” Jammal says.
The ability to scan products is “one of the key features that is driving increased app engagement,” he says, without revealing more.
“We continue to build more parity between what’s in our app and what’s on our website,” Jammal says. Home Depot has been building “web views” in the mobile app. Web views mirrors the web browser experience within Home Depot’s mobile app, he says.
“Everything you can do on the website, you can now do on the app,” Jammal says.
Over the last year, Jammal says app downloads are on the rise, including “better engagement,” he says. Jammal declined to reveal details but says “a lot of metrics are trending positive.”
Home Depot invests in search keywords
Before consumers can decide how they want to receive their items, they first need to find the merchandise. As a result, Brown says the merchant has focused on improving what it calls “intent search online.”
Brown says Home Depot adjusts how the software algorithm responds to shoppers’ search of basic keywords on HomeDepot.com. Depending on the customer, searching for the keyword “shingle,” can mean different things, she says. A do-it-yourself customer might need a small amount for a smaller-scale project roofing project. Whereas a Home Depot Pro Perks customer might order in bulk for larger projects. The search also pulls up relevant complementary items such as as roof vents, and other materials needed to install shingles.
“As you think about shopping on HomeDepot.com, your search term can mean different things based on who you are or what you’re trying to accomplish,” Brown says. “We continue to update search to handle the demands of the different shopping patterns we see from customers as they engage with us online.”
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