Why is a big retailer, in 2017 Home Depot suddenly turned into a service technology corporation?

Tram Ho

The Home Depot is the largest home appliance retailer in the US and has been established since 1978. Like many other long-standing retailers, Home Depot has a lot of difficulties when e-commerce boom. explosion, forcing the company to turn to online conversion to be able to survive in a new age.

Surprisingly, thanks to online conversion, Home Depot has not only transformed itself from equipment and service retailer to data and information technology companies but also increased profits.

Vì sao đang là ông lớn ngành bán lẻ, năm 2017 Home Depot đột ngột chuyển hướng thành tập đoàn công nghệ dịch vụ? - Ảnh 1.

Acting as a software firm, investing heavily in technology

At the end of 2017, Home Depot surprised investors by announcing a $ 11.1 billion investment strategy within 3 years, switching from a pure retailer to a technology-oriented corporation. The main objective of this project is to increase sales to US $ 120 billion by 2020.

To accomplish this, Home Depot is determined to invest heavily in technology to be able to bring completely new experiences to customers. The Group has strongly upgraded its 2,000 retail branches as well as promoted e-commerce. In addition, the customer data array has been upgraded to complete online transformation in its supply chain.

The first thing when Home Depot makes an online conversion is to hire up to 1,000 technology experts including engineers, programmers, designers, managers or even consumer behavior specialists. The online transformation always starts from the manpower before Home Depot did not have much experience in this area before.

Within 2 years, Home Depot has taken a series of measures to promote technology in its supply chain. They build an online sales website and are directed to construction contractors instead of spread to individual customers.

Vì sao đang là ông lớn ngành bán lẻ, năm 2017 Home Depot đột ngột chuyển hướng thành tập đoàn công nghệ dịch vụ? - Ảnh 2.

Its data collection system, which allows Home Depot to propose suitable options for contractors without spending too much time discussing.

Besides, Home Depot’s data system also backs up the product situation at branches, thereby ensuring customers can buy their products at the nearest store. At the same time, the management of inventory by the system will help Home Depot save more resources.

For example, when a contractor wants to buy ceiling fans, they will go to HomeDepot.com to receive instructions and a list of equipment that suits their needs. When the contractor chooses which product, they will be placed on a waiting list to find the nearest branch.

After that, Home Depot will ask contractors to do transactions online but receive goods at branches to be able to check by themselves. Such contracts account for 48% of its sales in 2018 and over 50% in 2019.

Next, HomeDepot will arrange the goods into separate bins in front of the store so that contractors can quickly check and load the car. Interestingly, about 20% of contractors who pick up the product will buy more products because of the convenience of passing the store.

Upgrade shopping apps

For individual customers, Home Depot has built a system of digital voice and image recognition shops. Customers can download the Home Depot app and get instructions on appropriate products and how to use them without being overwhelmed in the company’s inventory.

Vì sao đang là ông lớn ngành bán lẻ, năm 2017 Home Depot đột ngột chuyển hướng thành tập đoàn công nghệ dịch vụ? - Ảnh 3.

For example, if a customer is looking for a tool to repair a doorknob, the app can analyze images from a broken doorknob, making the most appropriate choices. Customers can choose to pick up or ship to home. Of course, each product will have detailed instructions on how to use it on the application.

Interestingly, customers can not only buy more than 40,000 types of products for home repair and construction, but also can trade more than 1.5 million other products at stores affiliated with Home Depot through application on.

It can be said that the online shopping strategy but receiving goods at the warehouse (BOPIS) is the trend of many retailers in online conversion. Along with that is the upgrade of applications for smartphones to increase interaction.

From the success of online transformation, Home Depot continues to maintain its position as one of the leading construction equipment suppliers in the US. Even, Home Depot is aiming at repairing, consulting services, taking advantage of the distribution capacity and data array of customers.

According to the experts’ recommendation, the business model switching from traditional to online sales is not enough, but the store should build and manage an independent sale channel owned by them. As a result, the store can maintain a long-term online selling model, cooperating in parallel with many sales channels and delivery channels at the same time, avoiding dependence on exclusive cooperation partners, while ensuring customer data retention. line.

A sales management solution that should be easy to use, low cost, synchronously solve problems from business (consulting, closing orders, ordering, online delivery) to operating (warehouse management, order statistics , Profit and Loss,…).

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Source : Genk