The home improvement warehouse's growth may not hinge quite as much on the housing market as it appears. Here's why.
Home Depot's multichannel focus doesn't end at the weekend DIY-er. It recently launched a mobile app for "pro" customers (contractors) that allows them to create, save, and share personalized supply lists, check stock of items at Home Depot locations nearby, create e-receipts, and arrange for early morning pickup. According to the transcript, Blake said Home Depot plans to strategically boost adoption of the app, but that it "has been very well received" to date. Of Home Depot's focus on the pro segment and its impact on investors, Greg Rand, founder and CEO of residential real estate investment provider OwnAmerica.com says it has also established a strong position in the institutional investor market as it relates to foreclosed properties. "Home Depot is partnering with large investors and providing mobile technology to enable rapid estimation of rehab projects, and connecting the investors with their contractor network," says Rand.
Additionally, Home Depot is following in the footsteps of Apple (NASDAQ:AAPL) in its approach to securing a technology foothold. To form what is now called the "Innovation Lab," Home Depot purchased BlackLocus, a start-up that designs algorithms to accommodate ever-changing Web pricing in 2012. Additionally, it purchased online handyman service RedBeacon, which connects homeowners with installers and home-improvement professionals to perform both larger scale installations and basic maintenance like painting, hanging pictures, unclogging a drain, and even house cleaning. The customer order, project details, and pricing are all captured and coordinated online, catering not just to DIY-ers, but to those who'd rather outsource most (or all) of their home projects entirely. Though the service is currently available in just 11 states, Bloomberg reports it will be offered nationally in the next two years.
Why is Home Depot so darn good at pushing gift cards? Steve Rowen of RSR says it's a simple matter of giving customers what they want. "At least as it relates to gift cards -- they do something we continually advise retailers to do: Think about the customer while designing the solution," including making the offer easy to find online, and streamlining the purchase process. Thanks to its customized gift-card imagery, combined with its emphasis on creating opportunities for customers to purchase, send, and check gift-card balances from a variety of channels (in-store, online, or via social media, apps, or third-party sellers), Home Depot has found a way to be every place where customers purchase.
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