Home Depot on path to recovery with three-pronged initiative
HTT Staff -- Home Textiles Today, 6/22/2010 3:16:26 PM
Nantucket, Mass. - The Home Depot discussed the details of its three-pronged strategy to boost business this year and onward during its presentation today at the Jefferies Consumer Confidence conference.
Marvin Ellison, evp, U.S. stores, explained that Home Depot views 2010 as a transitional year, as reflected by the home improvement chain's positive first quarter results.
"For us, we define transitional as sales moving from negative to positive territories. [In the first quarter] we exceeded our internal expectations. We had positive comps in U.S. stores for the first time since the fourth quarter of 2005. We grew transactions and we had year-over-year positive inventory turnover."
Ellison offered an outline of the strategy, which includes: supply chain transformation; merchandise transformation; and customer service.
"From a store operations perspective, each of these initiatives will assist us to drive not only improvements in customer service and simplification of stores. We think it will help us to just drive a better business in general," he said, adding the initiatives will also "continue to allow us to improve our performance and create a better shopping environment for our customers."
The supply chain transformation relates to the rollout of company's new rapid deployment centers (RDC). With 14 in place to date, about 70% of Home Depot's stores are being serviced by these RDCs. The company expects to have all units serviced by RDCs by yearend.
"Our RDC network has dramatically improved the store environment already," Ellison said. "For example, it allows us to shift payroll from just moving freight to taking care of customers. They've improved our in-stock levels to 99%, they've improved our lead times, and they've improved our overall turns. And we think this will continue quarter by quarter."
The merchandising transformation initiative focuses on providing "great value and reestablishing product authority." Specifically, this includes an assortment maintenance tool that allows merchants to set assortments below market level for a more productive inventory and fewer markdowns in seasonal business, and an automated clearance process in which markdowns are applied based on weeks of supply by store to shorten the clearance cycle and reduced clearances.
At the core of the strategy is the customer service initiative, which is broken into two segments: "taking care of associates" with improved benefits; and "taking care of customers," with an easier return process, guaranteed price matching and other bonuses.
Search online for “Home Depot Forum” and go to Topix. In the Topix Online Survey titled “Does Home Depot Need a union”97% of surveyed Home Depot respondents overwhelmingly support a union to address the current employment issues that based on the online posts appear to plague the company and many of the home depot associates that have posted feel management continues to overlook these significant issues. Much is discussed on Topix about the Home Depot California Pac Central Region. Additionally the posts indicate a pattern of promotions that favors “white males” over all other groups and firings are disproportionate with women and minorities. It is worth noting that the EEOC requested demographic details of Home Depot managers and has not received the requested information since 2001.HomeDepotUnion - 2010-06-23 00:54:42 EDT
- Jun 8, 2009