In a special interview with Retail TouchPoints, Mark Holifield, SVP of Supply Chain for The Home Depot, shared how the retailer was honing its inventory strategies to ensure omnichannel excellence.
The home improvement retailer is now in the next phase of its initiatives, and the team is celebrating the opening of a new distribution center located in Perris, Calif.
Approximately 858,953 sq. ft. in size, the new facility will initially employee approximately 150 associates. Eventually, the employee roster will reach 300 associates.
Advertisement
In the below Q&A, Scott Spata, VP of Supply Chain for the retailer, gives RTP an update on its omnichannel inventory plans.
Retail TouchPoints (RTP): The Perris direct fulfillment center (DFC) is the latest in a series of new facilities to help transform your supply chain and drive a great customer experience. How has your customer base been responding to these efforts?
Spata: In today’s world, customers want to shop how they want, when they want and where they want. Our focus on our new direct fulfillment centers and getting online orders to customers faster continues to drive a higher overall customer experience. We do not comment on sales – but are pleased with the performance of our DFC network and customer response.
RTP: How will the new DFCs impact your delivery options/offers, and what you charge customers for delivery?
Spata: The new DFCs will allow us to offer our customers multiple delivery options to choose from allowing them to pick the level of service, speed, and cost at their discretion. We have learned that our customers want the power to choose, so we are building flexible options and solutions to satisfy their needs.
This is for standard ground shipping, and we offer expedited shipping for most products if customers prefer to choose that, which does include a premium charge. However, we find that most customers choose cost over speed.
RTP: How are the new DFCs shaping customer preferences and behaviors? Are you finding that more customers are selecting buy in-store, deliver to home or buy online, ship to home as an option?
Spata: The DFCs are helping support our online business. Online sales were 4.2% of our total sales in the second quarter (3.2% in Q2 2013) and grew more than 38% year over year in the second quarter. Our online channel will continue to drive transactions in the store and the store will drive transactions to the online channel. Roughly one third of our online orders end up with a customer coming to pick it up in the store. One out of five of those customers end up buying something additional in the store while they are there.
