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Home Depot Looks to Offer Same-Day Delivery

Home Depot has announced plans to open new fulfillment centers in California, Atlanta and Ohio over the next two years in an effort to build the capability to offer same-day delivery. The move will cost the retailer at least $300 million on supply chain, technology and online improvements, including building new fulfillment centers and overhauling its warehouse technology systems.

The aim is to boost online sales that include same-day delivery to customers and professional contractors who might be in the midst of a home improvement project and want supplies in a matter of hours.

“It’s a big investment,” Home Depot’s Chief Financial Officer Carol Tome says.

Home Depot hopes to allow shoppers to place orders by 5 p.m. and choose a one-hour delivery window. Customers will be able to receive real-time delivery updates via mobile phone and choose from 100,000 items, says Mark Holifield, Home Depot’s senior vice president of supply chain.

Home Depot has all but halted construction of new brick and mortar stores in the U.S. and is turning its focus to building its online business. A key factor will be establishing a delivery and supply chain system that will enable same-day delivery. Home Depot also plans to begin filling online orders within its stores, rather than a warehouse or distribution center, to enable delivery of 90 percent of orders within two days. Currently, it takes between two and seven days for customers to get most orders.

“In 2008, upon reaching what we believed to be market saturation, we slowed new store openings,” Tome says. “Now we believe our sales growth will be driven by a continued recovery in the housing market, as well as interconnected retail.”

In 2012, online sales represented 2.4 percent of the company’s $74.8 billion net sales. Home Depot’s web sales are expected to increase by 50 percent this year to $2.7 billion.

The company also said it is looking to expand in-home assembly and installation programs for appliances to patio furniture, grills and other items.

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About Amanda Bell

Amanda Bell was an assistant editor of Hardware Retailing and NRHA. Amanda regularly visited with home improvement retailers across the country and attended industry events and seminars. She earned a degree in magazine journalism from Ball State University and has received honors for her work for Hardware Retailing from the Association of Marketing and Communication Professionals.

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