The old saying goes, “the rich get richer”. In ecommerce this is true as well. Just take a look at The Home Depot. They recently blew the doors off of their financial results, outperforming competitors like Lowe’s significantly. Their sales growth is up around 5%, they are opening new stores, operating margin is up, and in addition to repurchasing shares, their EPS is also up 17% over the same period last year.
So what does a rich company like The Home Depot decide to do with these extra earnings? Plow them right back into the business. In their analyst call this week, they revealed that they will spend $300 million on e-retail, warehouse and supply chain improvements all of which aid in what customers experience when shopping at their store – whether those customers are contactors or weekend warriors.
Ecommerce Optimization Delivers Big Growth for Home Depot
The company says that ecommerce accounts for just 3% of their overall sales, but it is growing at over 50%. But the overall operation benefits because their ecommerce site is where shoppers find and order what they want and then pick it up at their local store. The Home Depot ecommerce site is an integral piece of their in store experience – showing product availability and item location in store so shoppers can find what they are looking for in real time, or on the internet.
The Home Depot is getting a lot of things right in e-retail. Having the deep pockets and the discipline to invest in the systems, people and processes to make it all happen, will certainly keep them at the top of the heap in their market.