How Home Depot Is Driving Higher Online Visitation

Investment in experience

According to Kevin Hofmann, senior vice president and president of online business at Home Depot (HD), the company is investing in enhancing customer experience and choice. The company is looking at product search enhancements, including voice and image recognition combined with store maps to make the product search easier and more seamless for its customers.

HD has also invested considerably in its store associates to provide knowledgeable answers to customer queries on products, whether in stores, on the phone, or via online chat.

How Home Depot Is Driving Higher Online Visitation

The world’s number one home improvement retailer is also looking at improvements in its mobile content, with the addition of product ratings, reviews, and good-quality images, enabling easier search and selection for clients. According to Hofmann, Home Depot will spend more on digital marketing this year than on traditional marketing channels. This underlines the importance of the channel for the retailer.

Online merchandise assortment

The number of SKUs (stock keeping units) available online at Home Depot is also much higher than those at physical stores. While its brick-and-mortar stores stock about 35,000 SKUs on average, the company’s online assortment numbers over 1 million. A higher number of SKUs are available online for Lowe’s (LOW) as well.

Restoration Hardware (RH), which derived almost 50% of its sales from the web last year, also has a substantially higher merchandise assortment available online and in its catalogs compared to the number of items available at its stores, which operate more as showrooms. E-retailer Wayfair (W) stocks hardly any inventory at all, instead shipping most products to customers directly from its suppliers.

Higher online inventory tends to provide greater customization and visualization options for some merchandise items. Stocking a lower number of retail SKUs can help save fixed costs. Besides, with the fulfillment options these retailers provide, it’s relatively simple to order items online.

Visitation growth

As a result of the above initiatives, Home Depot’s site traffic is increasing. The retailer (XRT) (XLY) clocked nearly 1.5 billion online visits in fiscal 2016, up from over 1.2 billion in the previous year. This growth rate is higher than that of the overall industry, according to Hofmann.

Restoration Hardware reported 25.8 million unique visits in fiscal 2015, up ~16% year-over-year.