Tag: The Home Depot

Accelerated Analytics Customers Excelling at The Home Depot

Accelerated Analytics customers who sell their products at The Home Depot saw their first quarter comp sales increase 12% over last year! That’s double the results reported by The Home Depot when they released their first quarter results last month. In a news release on May 16th, The Home Depot reported sales of $23.9 billion for the first quarter of fiscal 2017, a 4.9 percent increase from the first quarter of fiscal 2016. Comparable store sales for the first quarter of fiscal 2017 were positive 5.5 percent, and comp sales for U.S. stores were positive 6.0 percent.

DIY, Home and Hardware vendors count on Accelerated Analytics to provide an expert reporting solution that empowers their sales, marketing and store operations teams. Our product and store level analytics provides the insights needed to exceed sales goals, increase orders to fully stock their shelves, test plan-o-gram efficiencies, and prepare for line reviews.

Our customers truly are winning at retail because we understand the home improvement retail business inside and out and provide a solution that is specifically targeted to, and designed for, a DIY vendor.

Home Depot Online and Store Expertise Helps Grow Their Business

Home Depot Online The Home Depot has seen its online sales grow to $5 billion in 2016, with 19% growth in online sales in Q4 2016. The retailer is very focused on their customer experience both online and in-store. Their strategy is to have a blended approach of ecommerce and in-store customer service. Professional contractors make up just 3% of its customers, but generate 40% of its revenue. “Our goal is to help both professional contractors and average consumers solve problems,” said Home Depot CEO, Kevin Hofmann.  He also maintains that his associates in the stores and via online chat need to be able to answer customer questions, which can be a lot. Professional contractors ask questions around product specifications and helping them to make money on their jobs, while consumers look for tips and how-to’s. Consumers also could be coming into the store to buy staples, such as laundry detergent, or for a major DIY project with big decisions to make. An associate needs to be able to detect shopper needs and be able to answer those questions. To do this, Home Depot executives are visiting stores weekly, donning an orange apron, and walking the aisles to speak with consumers and interact with them and their associates. Online, the retailer offers 24×7 chat services and digital tools to help consumers visualize products in their homes. Home Depot knows it is a leader in value pricing and selection, and strives to add convenience and service to keep customers coming back. To best partner with Home Depot, vendors are partnering with Accelerated Analytics to monitor sales and stock levels down to a store basis, ensuring customers can find and buy their products where and when they need them.

Source: Adweek.com

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DIY Retailers Bloom Into Spring

DIY Retailers Home Depot

Barron’s reported on Sunday that home improvement retailers The Home Depot and Lowe’s are strongly positioned financially going into Spring. Homeowners are undertaking renovations and projects due to a healthier economy and improved real estate markets. Barron’s also states that The Home Depot and Lowe’s are “Amazon-proof” as home improvement is low on the list of categories Amazon is penetrating.

The Home Depot has out-performed Lowe’s over the last several quarters in same-store performance, but Lowe’s is attractive to investors for its lower price-to-earnings ratio. Both retailers are expected to see revenue and stock price increases.

Lowe’s trades at $82, 18 times its $4.62 earnings per share, while The Home Depot trades at $147, 20.4 times its earnings of $7.19 per share.

Accelerated Analytics provides POS reporting and analysis for dozens of DIY vendors who sell through home improvement retailers, reporting on over $11B in sales per year in this segment alone. DIY vendors can learn more about our expert solutions for DIY, home and hardware vendors on our new website solutions pages.

Source: Reuters.com

DATA-DRIVEN Series: What You Can Learn From Your Average Retail Selling Price

Data Analysis

Last week, I had the opportunity to work with two different customers analyzing their sales at The Home Depot.  One sells products in the paint department and the other sells into the building materials department.  The analysis goal for both customer projects was to deconstruct their YTD sales and identify the factors contributing to higher than expected comp sales increases.  Both customer’s sales for a set of key SKU’s were up about 2.5% YoY and the question they wanted answered was, “What is driving the higher sales, and will it continue?”

Average Retail Price As we deconstructed their respective sales into its component parts of distribution, price, and rate of sale, we uncovered interesting data regarding average retail selling price.  The first customer’s average retail price was pretty consistent across Home Depot stores at the expected $22.95 retail price.  There were some fluctuations, but the data was pretty clustered, as expected.

 

In contrast, the second customer’s average retail price was very inconsistent.  Customer #2 believed that The Home Depot was pricing their core SKU at $59.95 or $65.95, depending on the market.  However, as you can see in Figure 2, the pricing was very inconsistent across stores.  In fact, we identified stores in the same Home Depot market with a selling price variance of $28.35 per unit.

Home Depot EDI

While there can be good reasons to price a product differently by market due to shipping costs or competitive pressures, it seems irregular to have different prices within the same market.  Take a look at the average retail price of your products. It’s an important exercise that can yield some interesting insights.  It presents an opportunity to have a conversation with your merchant about pricing strategies.  And, It also provides an opportunity to identify markets with similar demographic profiles, but different selling prices, thus providing insight into what price point drives the highest sales.

Does your average selling price match your expectations?  The answer may not be as simple as you think and could reveal some interesting insights.

Home Depot EDI

The Home Depot Q4 and Full Year 2016 Results

Home Depot Store Performance

The Home Depot continued its strong performance in Q4 2016.  The Home Depot achieved the highest sales and net earnings in company history.  Fiscal 2016 sales grew $6.1 billion to $94.6 billion, an increase of 6.9% from fiscal 2015.

Comp Store Performance

  • Comp sales were up 5.8% from last year.
  • 5.7% in November, 7.1% in December and 4.7% in January
  • U.S. stores had positive comps of 6.3%.  6% in November, 8% in December and 5.1% in January

HomeDepot.Com Performance

  • The online business grew over 19% versus the prior year, and now represents 5.9% of total sales.
  • About 45% of online U.S. orders are picked up in our stores

Merchandise departments (Q4 performance)

  • Flooring and tools had double-digit comps in the quarter.
  • Lumber, Outdoor Garden, Appliances, Decor, Indoor Garden, Lighting and Plumbing were above the company’s average comp.
  • Hardware, Millwork, Electrical, Kitchen-Bath, Building Materials and Paint were all positive, but below the company average.

Transaction Summary (Q4 Performance)

  • Total comp transactions increased 2.8%
  • Comp average ticket grew by 2.9%.
  • Looking at big ticket sales in the fourth quarter, transactions over $900, which represent approximately 20% of U.S. sales, were up 11.6%. The drivers behind the increase in big ticket purchases were Flooring, Appliances, and several Pro categories.

2017 Forecast

  • Forecast 2017 comp sales of approximately 4.6%

Carol Tome’s comments on forecast methodology:  U.S., GDP is projected to grow by 2.3% in 2017. We then add to that the benefits we believe we will get from rising home prices, housing turnover, and household formation. And we think housing will add another point-and-a-half growth to our overall growth next year.  To that, we have added a little bit of share shift in Appliances and certain building categories. And just to put that in perspective, in 2016, Appliances contributed 50 basis points of our comp growth.  And then we’re adding something else this year that we haven’t included in the past, and that’s what we call the cumulative wealth effect of home price appreciation. If you look at home equity, since 2011, home equity is up 108%. On average, that equates to $50,000 per household. And we believe that’s contributing – as people use the equity of their house to spend back into their house, we believe that’s contributing to our growth, so we factor that into our guidance, and that’s how we got to the 4.6%.

  • While private fixed residential investment as a percentage of GDP now stands at 3.8%, it has a way to go before it reaches the historical mean of 4.5%.
  • Home price appreciation, housing turnover, and household formation continue to be tailwinds for our business.

The Home Depot’s Hometown of Atlanta Discusses the Retailer’s Tech Edge

Atlanta news station 11Alive (NBC) sat down Sunday with The Home Depot’s Sr. Director of Digital Strategy & Mobile Applications, Matt Jones, about how the company uses technology to enhance in-store and online customer experiences. The Home Depot's Technological Edge

Says Mr. Jones about the retailer’s mobile app, the latest strategy has been to help the customer navigate in the store while shopping. The app also gives consumers the ability to read product ratings and look up detailed product information while looking at products in the aisle, enhancing the shopping experience.

“One of the challenges is being able to visualize how the products will look in your home, “says Mr. Jones. “A door could be an example, a patio set could be an example.”

Product Visualization

When asked how the use of technology has impacted sales, the bottom line and overall efficiencies within the organization, Mr. Jones says the blending of the in-store and digital experiences has definitely been a driver of sales success.

Who is The Home Depot’s tech consumer? “We’ve got a very diverse customer base, from the professional customer…to the customer buying home décor…to the customer doing a DIY project at home.” This year marks the biggest wholesale change to the mobile app in years.

There are a few things Home Depot is focused on for 2017 according to Mr. Jones: giving customers a way to personalize their app and online shopping to focus on their interests. He feels that the faster you can get a consumer to the information they want and will find most valuable is the key to success.

 

Source: 11Alive.com

Home Depot Sees Big Gains in 3rd Quarter Going into Holiday Sales

The Home Depot posted one of the biggest retail jumps post-Halloween among US retailers, seeing online visits increase 17.4% and daily visits to HomeDepot.com over 20 million in the first week of November. The Home Depot is also poised to increase mobile traffic to 53% over the 2015 holiday season. The Home Depot Sales

Online sales increased 17% during the third quarter and US same-store comps grew 5.9%. Significantly, over 40% of online orders placed were items picked up in the store, driving their omnichannel success.

For the first 9 months of the year, sales were $72.39 billion, up 7.2% from last year. The Home Depot attributes the growth to an increase in the number of people who made purchases in its stores and the amount of spend per customer transaction. The company expects its 2016 year to end with increases of 6.3%.

One thing to watch as the holiday season continues – last year Q4 numbers were very high due to prolonged warm weather, up 8.9% over 2014, making it harder for Home Depot to beat same store sales this year.

Sources: Internet Retailer, CNBC

Home Depot Focuses on the Online Shopper…By Focusing on Their Stores

The Home Depot has been on the great end of the rebounding housing market with a continued 4% increase in sales in the last quarter, while homeowners work on big remodeling projects like installing decks or remodeling kitchens. Without plans to add more new stores, Home Depot focuses on how to use their existing stores in new ways.

The Home Depot Focuses on the Online Shopper

About 42% of Home Depot online shoppers order online, but pick up in the store. To accommodate that, Home Depot is allocating capital to build out store storage to hold those products. When the customer is in the store, the retailer is trying new displays that help the customer shop easier. For example, the spray-paint section is set up like a soft drink display, so as one can is selected, the next can pops into place. In the lumber and millwork flooring area, the displays are easier for the customer to shop off of on their own, and the signage has been improved.

For the increasing online sales where customers want the items shipped to their homes, Home Depot has opened 3 new fulfillment centers that can deliver orders to 90% of their customers within 2 business days. They are also looking into leveraging their store locations to use local economical transportation for buy-online, ship-to-store orders.

Source: Wall St. Journal, IHRC