Home Depot Analyst Day Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings.

“For Home Depot the journey on product authority began with a fundamental restructuring of our supply chain. It’s difficult to claim private place on product authority if you don’t have best in class capabilities for getting product into the customers’ hands. As you know over the last several years, we’ve developed a new supply chain network with our Rapid Deployment Centers or RDCs. The RDC strategy along with improvements in our stocking and bulk DCs allowed us to improve our in-stock rates, improve current and improve customer service.”

Matt Carey, our Head of Information Technology

“2009 investor conference…At the time I told you our capabilities were basically 15 years behind other retailers.”

“there are four trends I’d like to talk to you about today that will influence our future technology direction. First, leveraging Big Data: we have to efficiently utilize the vast amount of data our company produces to simplify and automate decisions. Second, pricing transparency and analytics: pricing transparency has changed the competitive landscape and we must use advanced analytics to constantly fine tune our portfolio strategy. Third, supply chain efficiency: our investments in technology for a supply chain will be a driver of efficient seamless customer experience. And finally, creating a seamless customer experience: customers expect a seamless experience across all selling platforms even at a home improvement store.”

“With 1.3 billion transactions annually, over 15 million visits to our website a week, and over 600,000 SKUs, 300,000 plus associates across 2,200 stores, we have a vast amount of data as you can imagine.”

“through analytics, rules engines, dashboards, we can make and form decision efficiently. It can be provide insight into what’s happening across our business whether it’s marketing, merchandising, finance, supply chain and even in our stores. It can help us better understand the customer and market to them; adjust assortments to trends and demographics; control costs and better manage our stores.”

“pricing is an area where the retail landscape has changed drastically over the last several years. Pricing is increasingly becoming more and more transparent and dynamic. ”

“In today’s multichannel world with pricing data for end stores and online readily available, there is more information available to help understand the pricing landscape. We believe understanding the competitive environment is an imperative for any retailer who wants to win.”

“customer expectations have changed in an interconnected world. The customer expects to be able to buy something online or in a store and have it delivered to their home or in some cases installed.”

Marvin Ellison, our Head of U.S. Stores

“We know that actions like offering our customers refreshments, putting the tool in their hand so they can try before they buy or having personalized training during a workshop, our activities of a pure online competitor cannot replicate. And it reinforces the importance while making an emotional connection is part of our customer service strategy.”

VP of Merchandising, Craig Menear.

“Product authority starts with understanding the customers’ needs and there are factors that we must be keenly aware of over the next few years”

Kevin Hofmann, the President of our Online Business.

“we are increasingly focused on how the physical and digital worlds are converging. The lines are blurring across these channels.”

“This blending of the channels is what we call interconnected retail. And in the past, e-commerce has been viewed as a separate and distinct channel. That’s no longer true. Moving forward, e-commerce has simply become commerce.”

“We see over one-third of our online orders getting picked-up or fulfilled out of a physical store location, 90% of our online orders, excuse me, our online returns enjoy the convenience of free returns in our stores…Almost half of our online visitors indicate their next stop is The Home Depot store, so that’s interconnected retail.”

“let me introduce you to Janet. This is a customer in Minnesota, who recently bought a house about 12 months ago…anet has spent over $20,000 with us over the last 12 months…over the course of the year she’s had 22 transactions, 14 physical in-store transactions, 8 online transactions, 6 of those from a PC and two from the mobile device. Now inside of those transactions, we can count literally hundreds of interactions with our company and our brand, some with a website, some with an in-store associate and some with the call center associate or an in-home agent… rarely can you find a purely online order or a purely in store order along Janet’s journey. The transactions are only part of the story. These lines are blurring and the physical and virtual worlds are colliding to solve problems for our customers.”

Mark Holifield, our Senior Vice President of Supply Chain.

” Our RDC process is superior to traditional retail hard lines distribution as in these innovative facilities product never gets put away into storage or into a pick allocation as in a traditional DC.”

“there are some products that remain optimal to move directly to stores from vendors. And these are typically products where store sales a full truck load a week or more or products requiring special handling like locally sourced live goods.”