Home Depot turns to the Internet for growth

Queena Kim Apr 18, 2014
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Home Depot turns to the Internet for growth

Queena Kim Apr 18, 2014
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Home Depot as an online retailer? The Wall Street Journal reports that the big box retailer wants to grow by getting you to purchase building and home improvement supplies online

Part of the shift is due to overbuilding. For example, when I lived in Los Angeles, there were three Home Depots within a few miles of my house. And for a while, it seemed like it was building a store on every corner.

“That’s probably accurate,” says Seth Basham, an analyst at WedBush, adding that the excess of stores isn’t just a problem for Home Depot. “Between them and Lowe’s and Menard’s, the number of households per store continued to decline throughout the decade of the 1990s and 2000s,” Basham said. 

And so Home Depot is now turning to the Internet for growth. 

“The biggest unique challenge to Home Depot is figuring out what the customer actually wants to buy online,” says Maggie Taylor, an analyst at Moody’s. “So I think, carpeting for example, you’re always going probably into the store and take a look at.”

And heavy items like Jacuzzi tubs might not be worth buying online because of shipping costs. Getting purchases to people – on time and on budget – will be another challenge. But Taylor says with tech giants like Amazon nipping at Home Depot’s business, the big box retailer has no choice but to forge ahead.

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