As customers change, so does the Home Depot

It's not just what Home Depot plans to do to reach $101 billion in sales in 2018. It's also what Home Depot is planning not to do.

Home Depot president and CEO Craig Menear offered insights into his corporate mind-set braced to cross the $100-billion sales mark in three years. And as customer expectations are changing, the world's largest home improvement retailer is changing with them.

A significant part of that retail evolution is digital.

"We have to continue to connect our stores to our website and our website to our stores," he said during the company's investor and shareholder conference this week.

One of the company's three stated foundations -- customer service -- is leaning more toward the digital world, he said. "The first leg of the stool is moving from customer service to customer experience," he said. "It's about providing seamless and frictionless experience no matter where our customers are shopping -- the digital world, in our brick-and-mortar stores at home or at the job site."

Menear repeatedly described opportunities for growth, with one slide showing a $550 billion addressable consumer market, when one factors in MRO ($50 billion) and services ($200 billion). And what has been described in the past as a 27% market share dominance in home improvement is actually only a 15% market share when this entire universe is accounted for.

Menear also dedicated a slide to what the company was planning not to do:

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  No international expansion;


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  No small-format experiments; and


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  No large acquisitions to buy sales.

Menear left the company some flexibility regarding the last point. "We do believe in adding capabilities to our company that we either cannot build effectively, or where it's cheaper and easier to acquire than build," he said. The acquisitions of Crown Bolt, Interline Brands, blinds.com and BlackLotus are examples of these types of acquisitions, he said.

To reach its goal of $101 billion, Home Depot will have to generate about $13 billion in additional sales -- equivalent to about 357 stores.