Market Overview

Home Depot Planning To Expand Into Same-Day Deliveries

On Wednesday, The Wall Street Journal reported that The Home Depot (NYSE: HD) is planning on offering its customers same-day shipping and delivery.

Many investors would have speculated that Amazon.com (NASDAQ: AMZN) or eBay (NASDAQ: EBAY) would be the first to offer the same-day service.

Home Depot wants its shoppers to have the ability to have orders placed by 5 p.m to be shipped out no later than that same evening. Customers will have access to real-time updates through mobile devices and be able to choose from 100,000 items.

Home Depot has almost entirely halted its brick-and-mortar expansion as the market is nearing saturation. The company is now focusing on the logical next stage of growth and expanding its online business.

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During the company's recent third quarter, management noted that its online sales grew 50 percent year-over-year and account for 3 percent of total sales. “We know that our customers are expecting a simple and easy experience shopping online,” the company's CEO Frank Blake said during the company's post-earnings conference call without alluding to same-day shipping service.

In order to achieve the holy grail of same-day delivery, the company is adding three new direct fulfillment centers strategically across the country, ranging in size from a little under a million square feet to over 1.5 million square feet.

“We've studied our customer behavior and our customer surveys considerably as we've developed our network of delivery – our capabilities. Our customers want fast delivery. When survey, with cost being equal, customers expressed preference for same day delivery over next day delivery,” Mark Holifield, Home Depot Senior Vice President of Supply Chain, said during the company's Investor and Analyst Conference on December 11.

The company is also looking at expanding its in-home assembly and installation programs from appliances to patio furniture, grills and other items.

Posted-In: Frank Blake home depot Mark Holifield retailers Same-day deliveryNews Economics General

 

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