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The Home Depot CEO Craig Menear says “the amount of change that’s happening in our business” is what keeps him awake at night in a Dec. 20 episode of the Marketplace® podcast, distributed by American Public Media®.
“Being able to continue to make the change that we need to have happen to stay ahead of where the customer is taking us and being able to continue executing at the level we’ve been executing at,” Menear says, referring to the pace of e-commerce and the success the retailer has seen online.
According to the retailer’s third-quarter report, online sales increased 18.6 percent over the same quarter in 2016 and made up 6.2 percent of the company’s $25 billion in sales for the quarter.
“We have a large e-commerce business that is connected to our physical stores. It’s what we call ‘interconnected retail,'” Menear says. “The front door of our store is no longer at the front door of our store. It’s truly in the customers’ pocket, it’s on the job site, it’s when they’re sitting on their couch. The shopping experience in most categories starts in the digital world, even if it finishes in the physical world now.”
Menear says Home Depot hasn’t added new stores since around 2007, but even without additional retail locations, the company has continued to grow.
“We actually believe scale is very important, and while we’ve been growing nicely over the past eight years or so, that has been without adding new stores,” he says. “It has been about ‘how do you drive productivity?’ and expansion with the asset base that [we] have. And then … we have a pretty large e-commerce business. That business has largely been incremental for us. We’re growing both in store and online at the same time.”
With the corporate tax cuts that are part of recent tax bill Congress passed, Menear says the company is doubling its investment into the business over the next three years. Home Depot will put $11 billion into enhancing customers’ physical experience in stores, improving the experience for buy online, pickup in store, improving checkout speeds and enhancing its supply chain, Menear says.
