Five things to know about Home Depot's pro desk
Sales at the world's largest home improvement retailer are growing faster among pro customers than among DIY customers, according to The Home Depot's latest earnings report.
The company's executive heading up the pro division, J.T. Rieves, expects that growth to continue in 2017. Though, it's not just rising housing starts and apartment occupancy rates that are fueling optimism. The company expects to benefit from its integration with Interline Brands, the MRO specialty distributor acquired in August 2015. It will improve its service to pros through delivery and credit options. And it will be able say "yes," more frequently, Rieves said.
From an interview with Rieves during the recent International Builders' Show in Orlando, Fla., here are five things to know about The Home Depot's pro business in 2017.
1. A little bit of improvement yields a lot of market share: The Home Depot team has done the math. If every existing pro customer visits a Home Depot store three extra times, the result is an extra $1 billion in sales. Another scenario: If every pro customer spends $5 more on each trip, then that’s another $1 billion plus in sales.
“I still believe the opportunity for us to sell a larger share of wallet to our existing pros is our greatest opportunity,” Rieves said.
2. The Interline acquisition helped business in 2016, but it should help more in 2017: The acquisition of Interline Brands was trumpeted as a synergy waiting to happen. But one thing has been missing: an integrated purchase experience for pros at the pro desk. That’s coming in 2017. The full catalog of Interline offerings gives stores the ability to sell some 200,000 products that they don’t currently sell (pipes and fittings, for instance.) Also new in 2017: Interline customers will be able to use their Interline House account at Home Depot.
“Interline’s capabilities give us the ability to say yes to things we never could, and vice versa, and we’re really excited about that,” Rieves said.
The integration of the two businesses will further benefit from the guidance of an executive, Juan Bueno, in charge of integrating the two sales teams.
3. Existing customers are the target for growth: As mega mergers like BMC-Stock and Builders FirstSource-ProBuild reshape the building material landscape, with a whole-home approach to building products, Rieves said he is in no hurry to imitate their models. “Those guys have a business in which we today do not play very well,” Rieves said. “We have a nice multi-billion dollar business, where if we stay in our lane, I believe the opportunity for us to sell a larger share of wallet to our existing pros is our greatest opportunity.”
"We’re very bullish on the pro business, and share of wallet is a huge opportunity,” he said.
4.) Coming soon, a “game-changer” of a delivery policy: The most common complaints from pros in the past few years have centered on deliveries, Rieves said. This year, there’s an answer. The company is about to complete its national roll out of a two-hour delivery option. “By the end of the fiscal year, we should have the ability to allow those who buy online, or buy in person from the pro desk , and have it delivered in a two-hour window,” Rieves said. “That is a game changer.”
5.) Saving contractors' time is the name of the game: Wherever he goes, Rieves brings his mantra to pros: If you give him two minutes, he’ll save you 15 minutes a day. “Anything we can do to create efficiencies in their business helps,” he said. “Everywhere I go, labor and the lack of quality labor is an issue. It’s New England to Hawaii, and everywhere in between.”
Rieves said the two big time savers are buy online, pick up in store, and to let Home Depot arrange to pull the order and put it in a cart.
For Rieves, the strategies align with a goal to grow business. "My message to store managers is try to make your business so compelling that pros don't leave to go do business with someone else," he said.