Home Depot to speed up deliveries with new distribution centers

A customer wears a protective mask as he unloads purchases from a shopping cart outside a Home Depot Inc. store in Reston, Virginia on Thursday, May 21, 2020.

Andew Harrer | Bloomberg | Getty Images

Like many other buyers, Home Depot customers have little patience with long waiting times and shipping delays.

The hardware store announced Tuesday that it will be opening three distribution centers in the Atlanta area over the next 18 months to meet expectations that have only increased since the pandemic.

“We’d like to say that retail has changed more in the past four years than it has done in our 40-year history,” said Stephanie Smith, senior vice president of supply chain. “Covid has made this even clearer. Customers expect to be able to shop whenever and wherever they want.”

Smith said the pandemic had underscored the importance of having a strong and flexible supply chain. During the spread of the coronavirus, customers became even more interested in online purchases.

Home Depot has strived to meet customer demand for speed and convenience. The introduction of roadside collection began in late March, and the service is now available in most stores. Before the end of March, customers had to go inside to pick up online purchases.

Home Depot online sales were up roughly 80% year over year in the first quarter that ended May 3. Around USD 4.2 billion, or around 15% of net sales, came from online. In more than 60% of the cases, customers picked up these online orders in a store.

Online sales accelerated even before the pandemic. As of 2018, Home Depot embarked on a $ 1.2 billion investment to open approximately 150 supply chain facilities in five years. The company builds various types of distribution centers to handle its wide range of products, from small drills to bulky items like wooden pallets, and serves its mix of home improvement and professional home customers.

Home Depot aims to offer same day and next day delivery to 90% of the US population. The company’s analyst conference in December said approximately 50% of the US population had one-day delivery options.

The retailer has 2,293 stores and over 400,000 employees in the United States, Canada and Mexico. Almost half of its sales – around 45% – come from home professionals, even though they make up less than 5% of the customer base. These electricians, contractors, plumbers, and other professionals are one of the reasons Home Depot focuses on finding ways to move bulky or heavy items like cabinet doors or concrete quickly.

“It’s a very strategic, important customer that we’re seeing a lot of growth from,” said Smith. “And in general, in our company’s history, it works very well for our DIY enthusiasts when we develop something for our contractor or professional customers and do it right.”

One of Home Depot’s new facilities in Georgia will be a 657,600 square foot distribution center that will open by the end of the year. This helps in the rapid replenishment of stores in the southeast so that the products customers want are more in stock.

Another new facility is geared towards products carried by panel vans, e.g. B. local deliveries of vanities, cupboards and appliances.

The third is a flatbed delivery center that will open next year. It will help deliver oversized building materials like roofs, fences or drywall same day and the next. Some deliveries go to stores, others directly to the construction sites of home professionals or home improvement customers.

Home Depot opened the first flatbed delivery center in Dallas earlier this year. It has since opened another one in Baltimore and plans about 30 to 35 in major U.S. markets, Smith said. Flatbed trucks or railway wagons can be accommodated in the large buildings.

The company announced it would hire 1,000 full-time and part-time workers for the three new facilities.

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