TELECOM Digest OnLine - Sorted: Home Depot Online Expansion

Home Depot Online Expansion

Karen Jacobs (
Mon, 20 Feb 2006 14:17:42 -0600

By Karen Jacobs

Home Depot Inc. is on a mission to give its stores endless aisles.

The top home improvement retailer has a bold vision to expand its
online sales, including plans to broadcast live product demonstrations
and how-to infomercials on its Web site, automation of special-order
sales, and new catalogs focused on categories such as outdoor living.

The plan includes company-branded kiosks where consumers can surf and buy goods at any time wherever they are,
be that a Home Depot store, mega-mall or maybe even an airport. Such
self-service kiosks are already being tested in 50 Home Depot stores
and at two Georgia malls.

"As shoppers become increasingly time starved, they are looking to
shop any time, anywhere," said Harvey Seegers, president of Home Depot
Direct, the 1,000-employee division that handles online and catalog

"We're going to be investigating different channels of shopping in the
upcoming years and the ones that get approved will become permanent,"
Seegers said in an interview.

Online retailing is an explosive growth business. For example, Internet
research firm Nielsen/NetRatings tracked 92.3 million online purchases in
December 2005, up from 61.9 million a year earlier.

"Retailers are able to extend their business online and capture
significant sales," said Heather Dougherty, senior retail analyst at

Home Depot did not give figures, but said its online sales grew 100
percent in the past year. Over the next few years, the retailer sees
potential for online/catalog sales to reach $1 billion, an e-commerce
sales level already reached by discounter Wal-Mart Stores Inc.

Home and garden is among the product categories seeing the most growth
in online sales. "People are becoming comfortable buying things like
appliances online now," Dougherty said.

For Home Depot, online expansion is crucial to growth as new-store
openings slow and smaller rival Lowe's Cos. Inc. moves aggressively
into big U.S. cities.

The Atlanta retailer is stepping up its push into other markets as
well, illustrated by its $3.2 billion bid in January for Hughes Supply
Inc., which distributes construction materials to builders and other
commercial contractors.


Home Depot redesigned its Web site a few years ago, making it more
visually appealing, easier to navigate and adding gift
registries. Currently, 30,000 products can be bought online, half of
which include electronics, gym equipment and furniture that is not
sold in Home Depot's more than 2,000 stores.

Now that 60 percent of U.S. households have broadband Internet
capability, Seegers said Home Depot is investing in technology that
will enable consumers to shop on from kiosks in various
settings, home computer or cable and satellite television or from
their personal digital assistant.

"I envision a day where we have complete convergence between cable,
satellite and the Internet," Seegers said.

In coming years, consumers will be able to see live and archived
broadcasts of projects such as deck building on the retailer's Web
site, send questions to experts for quick responses and access
three-dimensional product demonstrations, Seegers said.

"A retailer can stand out by offering that kind of depth of
information and making (Internet shopping) an enjoyable experience,
particularly now because you do have so many more people on
broadband," said Dougherty, the Nielsen/NetRatings analyst.

New catalog businesses are also key to Home Depot's online
expansion. Last year, the retailer launched 10 Crescent Lane and Paces
Trading, catalogs aimed at affluent women that will compete with
high-end catalogs from companies such as Williams-Sonoma Inc.

The 10 Crescent Lane catalog offers products such as a $2,000
headboard, while Paces Trading features upscale lighting. Both brands
have their own Web sites.

At the end of this month, Home Depot will start displaying a catalog
of outdoor living equipment in its stores that includes pools, swing
sets and furniture, just in time for spring. All products in the
catalog, which will eventually be mailed to homes, will be available
for purchase online.

Special orders, which currently are mainly placed in stores, will also
be moving to the Internet, pushing Home Depot's online sales into the
several billions of dollars, Seegers added.

Copyright 2006 Reuters Limited.

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