For all of the pro dealers out there who decided in the '80s and '90s that they were not going to compete with The Home Depot, there's bad news. As acquisitions of White Cap, Williams Bros., and Hughes Supply indicate, the Atlanta-based home improvement retailer has decided it still wants to mix things up in the pro sector. In fact, direct mention of The Home Depot's pro intentions has already begun to creep into the company's ongoing multi-billion-dollar marketing plan.
In a March 21 presentation at the Merrill Lynch 29th Annual Retailing Leaders Conference in New York, The Home Depot executive vice president of merchandising and marketing Tom Taylor revealed that expansion—particularly into the builder and professional supply arena—is a distinct component of the company's current strategy to create innovation and differentiation in their marketing message and customer experience. Other elements include capital reinvestments in store image and shopping environments, and comprehensive marketing and PR campaigns encompassing print, TV, radio, and Internet-based advertising.
“The world is changing in the way we reach customers,” Taylor said during his presentation. “In the '80s and '90s, marketing wasn't so complex. Today, consumers spend the same amount of time in media, but the ways we reach them are changing. [At The Home Depot], we are experimenting with a lot of different ideas.” In particular, the company has been sponsoring America Online home pages, effectively buying the main URL as advertising space, Taylor says. The company also has pilot programs involving similar sponsorships underway with Comcast Cable and DIRECTV. “We'll never walk away from traditional media, but there are new things we have to pay attention to,” Taylor said. “It's a challenge for all retailers in how you get your message out.”
For The Home Depot, that message revolves around domination on both price and image, creating what Taylor calls “a compelling reason” for customers to want to shop at a Home Depot location and not even think about spending their dollars somewhere else. The company has reinvested $12.7 billion since 2001 overhauling stores with better lighting, more sophisticated signage, and easier access to product information in a showroom-type atmosphere to complement the PR media blitz.
Marketing among most pro dealers, on the other hand, has long had a stigma of ineffectiveness, thought of as an unproven expense line item of hit-and-miss strategies and rebranding blunders. For many pros, there has never seemed anything intrinsically marketable in a bunk of lumber and a box of fasteners, and the monthly contractor cookout (while great as a component of a larger marketing strategy) was about all the team could muster up on the marketing end. If you count yourself among these companies, it's time to reconsider your views on marketing and realize how a well-planned and better-funded effort can help build relationships and business—and keep you competitive with suppliers already out there making their voices heard. For examples of how your dealer peers have embraced and implemented marketing, see our feature article “Marketing Your Message,” by Joe Bousquin.
Regardless of your company size or customer focus, effective marketing involves listening to your customers, identifying your company's image and philosophies, and leveraging them across your organization—from the appearance of your delivery trucks to the look of your Web site—for sales success. “I wanted to take a proactive stance on what the future holds for us,” Bob Lucas, co-owner of Oceanside, N.Y.–based Contractor Express tells Bousquin of his company's $100,000 marketing initiative that highlighted customer loyalty on its Web page and resulted in 121 new accounts that purchased $200,000 from the single-unit dealer, helping to push 2005 sales up 11.5 percent to $13 million.
Not sure where to start? Bousquin's article also includes a list of marketing resources that industry pros are utilizing as well as seven key steps to launching a successful marketing program from Jim Groff, president of Baublitz Advertising, a York, Pa.–based firm specializing in the building industry.
If you haven't thought about marketing in awhile, there's clearly no better time than the present. Getting a head start on the competition—including The Home Depot—will leave you with that much more time for contractor cookouts at the yard.
Lisa Clift, Editor202.736.3307