29 Oct 2013 / By: Laura Kennedy

While home improvement retailers have long been far behind other channels in digital and eCommerce advances and integration, in the last year or so, retailers in the channel have been rapidly ramping up their eCommerce capabilities. Home Depot in particular stands out, as it’s taking the reins to better reach the increasingly digitally engaged shopper through broader eCommerce initiatives as well as a special focus on mobile.

Before zeroing in on how Home Depot is integrating digital tools into its strategy, it’s important to first outline the major steps across the path to purchase. Then, digging deeper into the retailer’s initiatives—some of which are best practices in digital right now—it will be critical for suppliers to think about the implications for their efforts to drive strategic partnerships with Home Depot in its quest for “interconnected retail.”

Home Depot Reduces Friction in the Path to Purchase

While there are many steps and touchpoints across the digitally enhanced path to purchase, they can be grouped into three major stages: shopping, purchasing, and fulfillment (Figure 1).

Figure 1
The Major Stages along the Path to Purchase
Source: Kantar Retail analysis 

Simplifying the path to purchase into these three stages makes it easier to think about the most efficient way to move shoppers through it. In short, retailers and suppliers that want to influence and induce more purchases must reduce friction within and between each of these phases. Technology provides more tools than ever to do that.

Within home improvement retail, Home Depot has produced some of the most potentially impactful digital initiatives over the last year or so, especially notable for the shift into a more functional approach. Previously, Home Depot’s (and many other retailers’) digital initiatives focused on experimentation just to get in the digital “game.” For example, Home Depot first trumpeted a few fun whiz-bang tools, including a touchscreen caliper and a drywall calculator, in its initial iterations of its mobile app. But the retailer’s most recent and functional digital advances have taken an even more practical turn and focus across the major steps in the path to purchase, with special attention paid to mobile technology and its ability to set the path to purchase in motion from shoppers’ hands.

Shopping: Getting Practical, but Staying Tech Savvy

One of Home Depot’s standout digital initiatives this year is fairly straightforward from a technological point of view, but is still important to reducing friction during the shopping process: the retailer has taken store maps mobile. Home Depot translated the layouts of all 2,000+ of its U.S. stores to map not just the location of certain departments, but also to the level of individual SKUs. Shoppers who set up their regular store in the retailer’s app and then search for an item in the app can pinpoint the location of the item in-aisle. The app also provides visibility into how much of the item the store has in stock (Figure 2).

Figure 2
Home Depot Maps Its Stores to Make the Big Box Smaller, Reduce Friction in Shopping & Locating Items
Source: Home Depot mobile app

The retailer is not alone in exploring this mobile capability: Walgreens and Meijer have partnered with the startup Aisle411 to map their stores, and Walmart began testing a similar capability last year. Home Depot is the first big-box home improvement retailer to do so (Lowe’s has since added the feature in its most recent app updates).

Home Depot’s initial effort to make the big box smaller is especially important as the retailer looks to snag the loyalty of the growing ranks of homeowners in Gen Y and Gen X, groups of shoppers that may be skeptical of the need for big-box retail. The overall concept of reaching these shoppers where they are—with their mobile phones—and putting more tools and information in their hands through such devices will be a major pillar of communications with these new generations of homeowners.

At the same time, Home Depot has not completely abandoned the experimentation with “cool” mobile tools. One of its newest app features is an augmented reality tool that allows shoppers to see what a new feature on their home would look like, using their mobile phone camera and the retailer’s app. Currently the tool features front doors (Figure 3); in the spring and summer, the retailer discussed testing it with patio furniture and landscaping suggestions and options. Shoppers can virtually test the doors against the rest of their homes and can even save the photo on their phones. The saved photo features product information, should the consumer want to think over the purchase.

Figure 3: Home Depot Uses Augmented Reality to Foster Creativity
Source: Home Depot mobile app 

The tool serves as a trusted source of sorts, putting in shoppers’ hands the ability to virtually test new design options for their homes, with the intention of giving them the confidence to buy. Not to mention it encourages them to buy without the hassle of having to physically move the merchandise. The feature also keeps the “purchasing” phase just a click away, as shoppers can easily swipe back to a product page and buy the item on the spot. While the augmented reality is still a “cool” tech-heavy tool, its practical application—helping shoppers make a decision on what to buy—means it still removes friction from the shopping experience.

Purchasing: Concentrating on Shopper Priorities

At the same time that Home Depot’s store maps takes some of the pain out of navigating the store—i.e., shopping—the purpose of the maps can also bleed into reducing friction in the “purchase” phase of the path. After all, if a shopper can find the product he or she is looking for, the better the odds and the easier it will be for him or her to buy it.

But an even better example of smoothing out the purchase process is Home Depot’s new Pro app, which features tools geared specifically to the retailer’s professional contractor customers. The app has just a few but highly impactful features that focus on the professional contractor’s needs for convenience and quick trips to Home Depot, such as a purchase history tracker, a list-making feature, and a “Quick Order” button, as well as quick access to the retailer’s new Pro loyalty program, Pro Xtra (Figure 4). The app also features the local weather at the bottom of the screen, a thoughtful inclusion for contractors dependent on weather conditions to complete construction outside.

Figure 4
Home Depot Narrows Its Focus to Pro Customers’ Specific Needs with the Pro App

Source: Home Depot mobile app


The creation of the app, as well as the Pro Xtra program, is important for a few reasons: to start, both programs require a good deal of online engagement and are obviously means for Home Depot to communicate more regularly with its pro customers and collect data on how these shoppers operate.

But what is also important to note is the app’s focus on localized and personalized tools, such as the personal previous purchases tracker and even the weather. The features on the app are sparse, but targeted at a specific shopper: the on-the-go pro contractor who needs one- or two-click solutions. The creation of the app for a relatively narrow, though important, customer base is broader evidence that as it has developed its digital tools, Home Depot has focused on the shopper’s needs and created functions that smooth out their paths to conversion.  

Fulfillment: Expanding Options

Not only does the mobile app for pros reduce friction to conversion and purchase, but it also simplifies delivery for pro shoppers on the move. This is an area where the Pro app could actually do a better job of emphasizing the benefits associated with mobile, on-the-go purchasing, and thereby further reduce friction to purchase: pro shoppers are given the option of picking up their purchases in-store at the regular service desk or at the pro desk, the latter of which promises a faster checkout (Figure 5). But because this option doesn’t appear until the end of the purchase process, it’s not clear from the beginning that the Pro will get that special treatment. Along with its “Quick Order” button, it would serve Home Depot and the Pro app well to add a “Quick Buy” button or a similar feature to highlight to pro shoppers that the fulfillment end of the path to purchase is also easier when they shop at Home Depot.

Figure 5
Pros Have Special Options for Fulfillment, but They Only Appear Late in the Shopping Process

Source: Home Depot mobile app


Meanwhile, across all of its digital shopping properties, Home Depot has expanded its ability to use its big-box stores as distribution points: after nearly two years with Buy Online, Pick Up In Store as an option, over the last year the retailer rolled out Buy Online, Ship to Store (plus, the retailer says Buy Online, Deliver from Store is a goal for the future). The convenience and flexibility that the options—including traditional parcel shipping— give shoppers are crucial to reduce friction to the sale: if shoppers know they can get the products they want on their terms, they will be more likely to engage with a retailer and more likely to stay loyal to that retailer.

 

Kantar Retail Point of View

We’ve highlighted just a few of Home Depot’s recent digital initiatives because they are valuable examples of a retailer focusing on functionality and removing friction from the path to purchase. The examples not only give us a good picture of the retailer’s approach to its “interconnected retail” goals going forward, but also identify some of the major tenets that retailers and brands alike must keep in mind as they develop and sharpen their own digital strategies:

  • Shoppers’ expectations for convenience and immediacy have evolved
  • Given shoppers’ changing habits, mobile will be a major hub for innovation
  • Innovation will—and must be—continuous

Shoppers’ expectations for convenience and immediacy have evolved. Reducing friction across the major stages of the path to purchase is crucial to meeting shoppers’ new demands. It’s clear that Home Depot has realized this, as it has moved from experimentation and innovation to establishing real reach with shoppers through its digital tools. Its focus on shoppers’ needs—and in the case of its Pro app, the specific demands of a narrow group—is valuable direction for retailers and suppliers seeking guidance on how to best use digital technology to communicate with shoppers.  

Home Depot’s functional focus means it is also helpful for retailers and suppliers alike to refer back to the major phases in the path to purchase and to think critically about how they might help reduce friction across those stages in order to reach shoppers’ new demands for convenience and immediacy.

Implications: Retailers and suppliers must think about how to remove friction within each phase of the path to purchase as well as holistically about how to move shoppers quickly across the path.

For instance, in the shopping stage, smoothing the path to discovery and awareness is as crucial as easing consumers’ path to what they’re looking for. Home Depot’s local store mapping is a prime example of a function that does both, giving shoppers the convenience and immediacy they want but also emphasizing the importance of the store.


As shoppers proceed to the purchasing stage
, making it easy to buy is paramount. But retailers and suppliers can move toward personalization and begin to form a deeper relationship with the shopper if they can tailor the buying tools to shoppers’ needs—in the same way Home Depot has with its Pro-focused mobile app.

Finally, fulfillment must not be neglected. Speed is important here, but this stage is also the closest a retailer or supplier can get to a shopper—whether in the store or in their home. Fundamentally, having the product in stock and fulfilled is the Holy Grail. In particular, enabling the what, when, and how he or she wants it is increasingly complex. It’s also important that retailers connect with shoppers about their fulfillment capabilities to ensure that connection with shoppers. Home Depot has made admirable efforts to make the process faster for pros, but the Pro app in particular does not do much to publicize that feature. Keep in mind, the relationship doesn’t end here; smart retailers will find ways to maintain connections after efficient fulfillment, such as through encouragement to review or other follow up that reinforces loyalty.

 

Given shoppers’ changing habits, mobile will be a major hub for innovation. Home Depot shoppers in particular are significantly more likely to own mobile devices than all shoppers (Figure 6).

Figure 6
Home Depot and Lowe’s Shoppers Are Significantly More Likely than All Shoppers to Own Mobile Devices
Source: Kantar Retail ShopperScape®, March 2013 

Bolded and highlighted percentages are significantly greater than All Shoppers at 95% confidence

That means it’s even more important that Home Depot and its home improvement brethren are ready to reach and communicate with shoppers via mobile. Using mobile applications will also be central to reaching the new younger generations of homeowners, who are also especially engaged with mobile and generally tech savvy overall. Mobile tools embody the immediacy that shoppers crave, and retailers that can create solutions within that framework will lead the way in digital communication.

Implications for retailers: Make sure mobile is distinctive and personalized. Mobile communications should not simply be shortened or miniaturized versions of e-mail or website campaigns; rather, retailers must take advantage of the opportunities mobile allows them to personalize and target the relationships they have with shoppers.

Implications for suppliers: Create solutions within the mobile framework. In the same vein that retailers’ efforts should not simply be shortened version of the website, suppliers should think critically about how they can leverage mobile to drive awareness and engagement with shoppers with contextualized communications, understanding their key need states based on where shoppers are or what types of activities engaging with on their mobile phones.

Finally, remember that all of the features we’ve discussed are not the end of the road: innovation will—and must be—continuous. For example, at this moment, Home Depot’s store mapping features are simply directions around the store. But in the near future, it’s possible the retailer will associate coupons or branded deals with the maps—offering a coupon for whatever product a shopper is looking for—which would force the store maps further into the category of smoothing the conversion and purchase.

Implications: Focus on multi-channel solutions. The standout innovations across channels are functional not just within the digital universe, but rather remove friction between channels for shoppers, making their shopping experience seamless. Retailers that can better connect these various touchpoints—removing friction within their own channels—have a better chance of forming stronger, more seamless relationships with shoppers. Meanwhile, suppliers should seek out those opportunities to enhance retailers’ digital initiatives and promote their own brands simultaneously.