Home Depot’s launch of “Home Depot Pro,” catered specifically for professional customers, is significantly expanding the retailer’s service capabilities for that market segment. In the company’s fourth quarter 2018 earnings conference call, Home Depot announced that pro sales once again outpaced DIY sales and were a large part of the 10.9% increase in sales year over year. Home Depot’s definition of pro includes remodelers and builders, as well as maintenance, repair, and operating supply workers.
Home Depot president and CEO Craig Menear said the company is “excited” about the investments it is making in the pro market, highlighting Home Depot Pro. The banner, launched during the fourth quarter of 2018, is a personalized offering for professional customers through a B2B website experience. Menear said the retailer has on-boarded over 100,000 pro customers with the program, with positive feedback.
“Our plan is for continuous enhancements, with new features and capabilities,” Menear said of Home Depot Pro on the conference call. “In response to customer feedback, we are adding the ability for businesses to enhance account management and ordering capabilities with improved tools. Our intent is to roll out this new online pro experience to over 1 million pros in 2019.”
The pro-focused, B2B online experience is part of the retailer’s plan to enhance its digital offerings and offer an interconnected shopping experience for all customer groups.
Ted Decker, Home Depot’s executive vice president of merchandising, said big ticket sales, transactions of $1,000 or greater, were up 4.8% in the fourth quarter. Decker said big ticket transactions represent around 20% of all sales in the United States. Accounting for wet weather and hurricane-related sales, the retailer’s January big-ticket comps were still up double digits year over year. Categories such as vinyl plank flooring, roofing, and appliances drove the high big-ticket comps during the fourth quarter. Additionally, Home Depot saw strong growth in power tools, water heaters, and lighting products, all typically pro-heavy categories, according to Decker.
Home Depot opened its first market delivery operation in the second quarter of 2018, as part of the retailer’s plan to expand fulfillment centers, another avenue of its expanding services to the pro market. Marc Brown, senior vice president of store operations, said Home Depot launched an additional four more direct fulfillment centers in 2019. The centers provide one- and two-day service to over 90% of the population.
In addition to its direct fulfillment centers, Home Depot also has car and van delivery available to DIY and pro customers across the U.S. Brown said the low-cost car delivery segment can service 40% of the U.S., and the van coverage can service 70% of the population. In the third quarter earnings conference call, Brown said Home Depot’s flatbed deliveries in particular had been successful with pro customers. On the fourth quarter call, Brown said Home Depot plans to open various new market delivery options and flatbed delivery centers during 2019.