An e-Business analysis of Home Depot 1

An e-Business analysis of Home Depot

Shanillia Forbes

BUS352: E-Business

Instructor:  Donna Falloon

July 10, 2011

An e-Business analysis of Home Depot 2

In this paper I will explain the impact on e-business and Home Depot benefit from doing

business online and how consumers find it a convenience to shop on line vs. the stores. I

personal find it much easier for me to research my products online before I waste gas and stand

in long lines for products that I can easily shop on line for. I have purchased products online

from companies like Target, Wal-Mart, Best Buy, Office Depot, and Home Depot. I find their e-

commerce much easier to shop from with their shopping tools. But one company stands out from

the rest and that was Home Depot, their e-commerce has wonderful add-on’s like, “ The Apron

Blog”, and “ Join The Conversation”, also Home Depot added facebook social networking “

Like & Learn” to their shopping page so you can find valuable information on facebook.

I also like the “The More Savings, More Doing” slogan altitude. While Home Depot had a

nine month e-commerce makeover, they still remain to be one of the favorite e-commerce

companies who operate merely from both the internet and stores, the company still remain the

number one for Home Improvement. Their company as an attractive, but smooth way of

operating their e-commerce, in which it helps to maintain and generate the Home Depot income.

Their associates are well trained to place orders and educated their customers about using their e-

commerce to order certain items that are not available in the store. While the vendors for the

company find it easier to maintain fewer inventories in the store but more in the warehouse, the

company knows that this usage has a very important impact on the company income that is

generate from their e-commerce site. Home Depot is a very large and successful home

improvement company which is driven on customers service, and it shows with the company

slogan and training classes for the customers, This paper will take you into the history of the

company it’s strategy and analysis of the company past and future and it e-commerce become

successful taking the company to another level of greatness.

An e-Business analysis of Home Depot 3

Company History:

“The Home Depot is the largest home center retailer in the United States and operates 478

warehouse stores and sells more than 40,000 items to both the rapidly growing do-it-yourself

home improvement market and construction professionals. The company's stores are located in

19 states, on the West Coast as well as in the southwestern, northeastern, and southeastern

regions of the United States. California and Florida are the states containing the most Home

Depot outlets, most of which are clustered around urban areas. A typical Home Depot

warehouse--more than twice the industry norm at an average of 105,000 square feet--stocks

building materials, wall and floor coverings, paint, plumbing supplies, hardware, tools, electrical

supplies, and supplies for landscaping and gardening.” (Homedepot.com/history)

How does Home Depot addresses the needs of customers, the company as developed many

workshops for customers to learn hands on training to do simple projects around the house, They

have a garden club that the customers can join, a Kids workshop, and store wide demos to show

customers simple projects and share new products that come available within the store. Home

Depot as widen their internet e-commerce to suit their customers, by adding “Do it yourself

Blogs” on their website, which became a big break for the company during their website nine

months make over.

An e-Business analysis of Home Depot 4

The Internet role strategy that Home Depot uses and the management strategies the company

uses comes after the Home Depot almost demolished its e-commerce site. The redesigned of

HomeDepot.com added more advanced features that get do-it-yourselfers, contractors and others

more quickly to a lot more information and easier shopping. “In the last three years 17% of all

visits to home improvement e-commerce sites were from visitors researching a ‘how-to’ project

and now that figure is about 40%,” says Home Depot president of online Hal Lawton.” “The new

redesign reflects better ways to help customers solve problems, research projects and find what

they want quickly and easily.” (Hal Lawton, Home Depot, September 2010).

And that’s after spending considerable time analyzing customer comments from various

sources such as e-mail, service center calls and customer satisfaction surveys. Since then Home

Depot added several major new design elements and features. The first goal was to redesign the

home page and add more elements and content that accommodated HomeDepot.com shoppers

with bigger computer monitors and higher resolution. The new home page now features a wider

top of the page navigation bar with reorganized drop-down menus for 16 major product

categories.

Home Depots current e-commerce strategy utilizes the company’s existing stores as

fulfillment centers or pick-up centers for products being ordered on-line by customers. A key

component of Home Depots logistics is managing the transportation of over 40,000 SKUs

between suppliers, warehouses and retail locations. The goal of redesigning HomeDepot.com

was to marry deeper content with easier navigation and faster shopping. Lawton says “Visitors

aren’t coming to the site just to find the cheapest price,” he says.

An e-Business analysis of Home Depot 5

“They are coming to HomeDepot.com for help with solving a problem and quickly shopping for

what they need at very competitive prices. The new design makes it easier to do that.” (Hal

Lawton, September 29. 2010). On the retooled HomeDepot.com the “how-to” center gives

shoppers access to featured products, project videos organized by major merchandising

categories, current promotions and project tips from sales associates. A new video player on the

home, merchandising and product pages also gives shoppers access to a new inventory of short

features that feature quick tips on gardening and home improvement projects. “In 2009 Home

Depot generated sales of nearly $500 million and came number 39 in the Internet Retailer Top

500 Guide.” The redesigning of their web-site as solves customer’s urgency for their problems.

(E-commerce News June 2010).

Home Depot e-commerce positions within the company counts as 10% of the company jobs

with the company and many jobs are being added every month for customer’s satisfaction. The

more the company grows is the more jobs within the e-commerce is developed by the company

to accompany the consumer’s needs. The online users are rapidly using the internet to research

projects, or home improvement tips to do and get a list of supplies before entering the store,

making it easier for store associates to help the customers get what they came for.

Because Home Depot is brick and mortar business they must follow all government and

regulation internet laws that are in place. These laws includes all copyright laws providing that

copyright materials sent over the Internet or stored on web servers are treated in the same manner

as copyright material in other media. Electronic Transactions & Contracts, which provides the

rights and obligations of the transacting parties. Protection of Personal Data which provides

parties collecting personal data online must comply with the same laws as those collecting

An e-Business analysis of Home Depot 6

personal data offline and the Code lays down the recommended practices for ensuring protection

of personal data. Regulation of online merchants which provides online merchants must comply

with the same laws as offline merchants. “TrustSg accredited merchants display the TrustSg

mark on their websites to signal to online customers that they are legitimate and trustworthy.

Their status as TrustSg merchants will be revoked if they violate the TrustSg code of conduct”.

(E-commerce and the law website source). While there are many other internet regulations that

Home Depot needs to following, Home Depot has taken every measure to follow the government

regulation to assure their customer information is always protected.

The Competitive advantage technology for Home Depot as included their data warehouse

environment with the” IBM DB2 software and its eServer pSeries Regatta hardware to devote all

of its processing power to the management and manipulation of data from all parts of the

company, including operations, merchandising, finance and human resources”. (IBM Provides

Technology and Services ATLANTA - 30 Sep 2002). The Home Depot has built a legendary

culture based on customer service. With a powerful IBM data warehouse as part of its e-business

infrastructure, Home Depot will now be able to leverage technology and information even more

effectively to enhance its business and customer service."

“The Home Depot's e-commerce site was not built in a day”. say’s Michael Cooper who took

over last year as the home improvement merchant's vice president-specialty channels. But what

he knew that their new company e-commerce web-site will change the way Home Depot operate

their business and as defines some important roles the Media channel for HomeDepot.com

should maintain relaying the same message across e-commerce as it does in its other forms of

communication, such as broadcast and print advertisements and the "Digital Orange Apron." site

An e-Business analysis of Home Depot 7

needs to continue to be a how-to destination for do-it-yourselfers who have a question about a

repair or remodeling job and the E-commerce. (E-Commerce for Real Aug 5, 2009 Tim Parry).

Hence you can see that the more they can build the online business, the more it will drive traffic

to the stores. That can be done by keeping the customer in mind, but differentiating itself from its

competition. While the Home Depot keeps building their business around the E-commerce, there

is no doubt that the company will remain one of the biggest Home Improvement retailers every

known, and they are still opening stores and remain building customers relations to help maintain

a strong brilliant company.

.

An e-Business analysis of Home Depot 8

Reference:

Home Depot

homedepot.com/history

Home Depot e-commerce site Hal Lawton, Septemper 29. 2010

http://www.internetretailer.com/2010/09/29/home-depots-new-web-site-delivers

HomeDepot.com Gets an Overhaul June 3, 2010 by ecommerce junkie

http://ecommercejunkie.com/2010/06/03/homedepot-com-gets-an-overhaul

E-commerce and the law and E-commerce Regulations

http://www.businesslink.gov.

Home Depot Launches a Major Computer Initiative

'Key Partner' IBM Provides Technology and Services ATLANTA - 30 Sep 2002

http://www-03.ibm.com/press/us/en/pressrelease/498.wss

Live From eTail: Home Depot is Ready to Embrace E-Commerce For RealAug 5, 2009 4:35 PM, By Tim Parry

http://multichannelmerchant.com/ecommerce/news/0805-home-depot-ecommerce/