Dive Brief:
- The Home Depot aims to deliver more professional customer orders directly from its distribution centers to free up store space and employees' time, said Ann-Marie Campbell, senior executive vice president of U.S. stores and operations, The Home Depot Canada, The Home Depot Mexico, and outside sales and service, on a Feb. 20 earnings call.
- Fulfilling more orders to pros' job sites from distribution centers rather than stores reduces store congestion and the amount of time employees have to spend picking, packing and staging for delivery, Campbell said. In Q4, nearly half of The Home Depot's online orders were fulfilled by its stores.
- Large order fulfillment via distribution centers also helps bolster in-store product availability for pro customers, Campbell said. She did not say to what extent the home improvement retailer wants to deliver Pro orders from distribution facilities versus stores.
Dive Insight:
The delivery initiative is one of several programs The Home Depot has underway to improve the experience of its lucrative Pro customers and attract more sales.
"By the end of 2024, we will have 17 of our top Pro markets equipped with new fulfillment options, localized product assortment, an expanded salesforce, and enhanced digital capabilities, with trade credit and order management in pilot or development," Chair, President and CEO Ted Decker said.
The Home Depot leverages a mix of facility types to fulfill Pro customers' orders. Its flatbed distribution centers help the company efficiently pick, pack and ship lumber and other building materials. Direct fulfillment centers, meanwhile, ship products like flooring, windows and doors.
"These facilities also rely on all of the other facilities to do their respective jobs in flowing goods to create the lowest-cost network for home improvement products," John Deaton, EVP of supply chain and product development, said in a June investor meeting. "So, the power of this network is so much bigger than just one type of building."
The Home Depot isn't the only retailer opting for more deliveries from distribution centers instead of stores. Best Buy is also leaning more on its distribution centers to fulfill orders, allowing employees to focus more on in-store sales and order pickups.
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