6.14.17 Innovative Technologies

Home Depot: Embracing Retail Technologies to Spur Growth and Build a Better Customer Experience

By: Jon McDonald

The Crunch: When retailers decide to embark on a digital transformation journey, they can look to Home Depot as an example of how to go about it. Its big investments in technology to improve efficiency and the customer experience have paid off handsomely for the home improvement giant. From revamping its online presence to building out a robust mobile app that puts the consumer in control, Home Depot has been proactive in its digital evolution. And through its Technology Center in partnership with Georgia Tech, Home Depot is building a pipeline of innovation — and talent — to keep the company on the cutting edge of interconnected retail.

Retailers have always relied on technology to make their operations run efficiently — from inventory management tools to point-of-sale terminals. But as consumers become ever more digitally active, businesses must embrace technology even further to meet — and exceed — customer expectation.

While many companies are just starting on the digital path, some have been steadily preparing for years. Home Depot, a popular destination for home improvement do-it-yourselfers, decided to make a significant investment in technology to enhance the customer experience — which the company calls interconnected retail — and it continues to pay off in the form of record earnings.

A couple of years ago, I got a first-hand glimpse into the consumer experience applications of Home Depot’s tech investment while doing some Christmas shopping for my dad.

Home Depot has made significant investments in technology in an effort to upgrade its customer experience.

On vacations as a kid, my family rarely traveled more than a mile in the car before my dad would ask, “Did I close the garage door?” That question always resulted in us turning the car around to double check. So, while searching for holiday gifts, I came across the MyQ Universal Smartphone Garage Door Controller on Home Depot’s website, which would allow my dad to use a mobile app to check on his garage door and control it from his phone.

I was able to use the Home Depot mobile app on my phone to confirm its availability at my local store before driving over there. When I arrived, I connected to the store’s wifi and used the app’s product location capability to find it on an endcap display. I was in control of the entire process, and it took less than 30 minutes to go from browsing to purchasing the perfect gift.

Without Home Depot’s investment in technology, my buying experience would not have been as easy. The company has made major upgrades in its mobile capabilities, in-store digital infrastructure, and website to show its commitment to the evolving demands of consumers. My trip was just one example of how Home Depot is removing friction to make the shopping experience more seamless.

Technology Investments Support the Core Missions of Home Depot

Home Depot’s business philosophy is framed as a three-legged stool, with the legs representing customer experience, product authority, and investments to drive productivity and efficiency — all driving toward interconnected retail.

The technology upgrades Home Depot continues to implement are aligned with those core beliefs and give consumers more control over their journeys. Whether it’s creating a responsive mobile app, bridging the gap between online and in-store purchases, or constantly updating its product selection to reflect digital trends, Home Depot is committed to adapting to the future.

Leading the Way with a Mobile App to Guide Customers In-Store

As consumers seek more independence, businesses try to give them more control at every turn. The Home Depot mobile app provides users with that freedom and a personalized connection to a local store.

Many mobile apps are watered-down, customer-facing versions of more complex systems the stores use to find, track, and order products. But Home Depot took a different approach, building an app that both customers and associates could use to be more efficient and knowledgeable.

The in-store location capabilities — as well as 3D mapping — allow a consumer to easily find what they’re looking for among 35,000 different products in a 100,000-square-foot environment. Users can also view select items in augmented reality on the app, meaning that they can see how that grill would look on the patio before making a purchase.

The mobile app lets users search for products through text, voice, photo, and even barcode to find an item. Weekly ads are also available directly on the interface. Home Depot built its app to put the power of an entire store into a mobile device — and bridge the gap between the physical and online branches of its business.

Finding Multi-Channel Efficiencies with Improved Order Management

Providing consumers with the convenience they desire means integrating digital and physical experiences so shoppers can engage in a personalized way. But implementing that connection is much easier said than done, which is why Home Depot revamped its order management system to adapt to sales and fulfillment in multiple channels.

The system gives customers a variety of options for engagement with Home Depot and gives the store a variety of ways to deliver products to those customers. One way is through the popular order online, pickup in-store option, which includes free shipping to the store if necessary.

Home Depot provides many options for online orders, including free shipping to a store and in-store pickup.

Another capability of the system is the option for Home Depot to ship online orders from the nearest store location, not a centralized fulfillment center. This option boosts efficiency for Home Depot, saves on shipping costs, and gets the item to the customer faster.

Home Depot’s order tracking system was also updated during the overhaul, making delivery dates and times much more accurate through better communication along the supply chain. But the technology trend is not just on the business operation side; it can also be seen in the products Home Depot is stocking based on customer demand.

Staying Ahead of Smart Home Trends by Expanding Product Selection

What began as a handful of products for home automation has turned into a massively popular smart home trend that is reflected online and in the aisles at Home Depot. Consumers want to make home life easier, and the connected technologies available today make that possible — from practically anywhere.

Some of the products provide peace of mind when a homeowner is away from home — like the Ring Video Doorbell, which allows you to keep an eye on activity at your front door, or the smartphone garage door controller I bought for my dad. There are also connected smoke and carbon monoxide detectors that can send a mobile alert to a homeowner if there is any danger.

Home Depot offers a variety of smart home products from a video doorbell to a thermostat that learns your preferences.

Other products are focused on home functionality and energy savings. The Roomba is a robot vacuum that can be controlled from a phone to clean the floor while nobody’s home, keeping a recurring item off a person’s to-do list. While a Nest Learning Thermostat can be taught over time what your temperature preferences are and can be controlled through an app, meaning it can be shut off when everyone is away to conserve energy.

And some products are just for enjoyment, such as a Bluetooth stereo speaker and fan for your bathroom, or an Echo smart assistant. By constantly evaluating smart products and adding them to its extensive selection, Home Depot always has an eye on the future.

A Partnership with Georgia Tech Helps Explore Future Innovations

Home Depot is committed to the future of retail technology, and, in 2015, opened its Technology Center on the Georgia Tech campus in Atlanta. The lab allows students to gain experience while still in school by working alongside Home Depot team members to innovate systems and strategies.

Students at the innovation lab explore new capabilities for existing technologies and design projects that can have a positive impact on Home Depot’s business model. The students look for new applications of emerging technologies, like 3D printing, virtual reality, and augmented reality, with a focus on making Home Depot operations more efficient.

Home Depot also uses the lab as a recruiting tool, offering many interested students who worked at the center long-term jobs after graduation. The company hopes the lab will be a pipeline of talented tech minds to help solve the problems and develop the processes of the future.

Bringing Digital Efficiencies to a Brick-and-Mortar Business Model

Home Depot has been leading technology adoption in retail for years and continues to reap the rewards — both in revenue and accolades. In 2016, the company topped L2’s Digital IQ Index Study, a ranking of big-box retailers’ digital performance.

Since its founding in 1978, Home Depot has catered to the do-it-yourself crowd through its products and associate knowledge. And now, through significant investments in innovative retail technologies, the company gives its customers the opportunity to easily build and customize their own journeys — in true do-it-yourself fashion.

About The Author

Jon McDonald is a contributing editor for DealCrunch with over 15 years of experience editing, writing, and designing at numerous publications. His passions include digging into emerging trends and seeking out the companies making an impact on the retail industry.

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