The Home Depot Field Report (May 3, 2010)
By Tim Binder
The Home Depot tapped into Earth Day on April 22 by using various tactics to boost its Eco Options sustainability program, which identifies national-brand and private-label products as better for the environment.
The green-thinking home improvement chain (see "The Home Depot Field Report: April 6, 2010" in Related Articles) is using upfront mobile floorstands labeled "Eco Centers" to distribute bilingual catalogs titled The Green Guide, as well as to give away samples of eco-friendly products. (See Image at right.)
The catalog highlights 10 ways to "save money, energy and water" by purchasing and using products carrying the Eco Options logo, including items qualified by the federal Energy Star and WaterSense programs. (Energy Star, created in 1992, is an Environmental Protection Agency/Department of Energy effort; WaterSense, launched in 2006, also is backed by the EPA.) For each of the 10 suggestions, the retailer compares the cost of purchasing related products with the estimated yearly savings consumers can derive from their use.
The floorstands also stock free exclusive water-saving faucet aerators from Neoperl and offer free samples of Clorox co.'s GreenWorks all-natural laundry detergent. Exclusive take-ones promote GreenWorks and the Eco Options program. (See Images at right.)
Eco Options (see "Home Depot Greens Up ..." in Related Articles) is also promoted through numerous other P-O-P materials, among them violators, posters, shelf signs and even the protective canopies over vegetable plants. some shelf signs also label energy-saving products that are eligible for tax credits. Among manufacturer-specific activity, US GreenFiber's natural insulation is stocked on dedicated endcaps with promotional take-ones. (See Images at right.)
Additionally, Home Depot devoted a full-page in its April 18 circular to Eco Options, which currently encompasses 3,600 SKUs. The page also plugged the chain's Garden Club (See "Marketing at The Home Depot" in Related Articles.) Stanchions signs supported. (See Image at right.)
Promotional Activity
Home Depot staged spring versions of "Black Friday" in March and April to mark the beginning of the home improvement channel's busiest season. Beginning on March 18 in warmer southern and western states, the retailer offered four-day "door buster deals" in such product categories as live goods, lawn care, outdoor power, eco-friendly gardening, and patio and grill. Stores in northern states staged the promotion in subsequent weeks. Radio spots and circular features supported, declaring "Black Friday is back." (See Image at right.)
"Spring is our Christmas," executive vice president-merchandising Craig Menear said in a release. "Traffic in our stores is at its highest during the spring season as customers look to take on outdoor projects to improve the appearance of their homes."
Merchandising
During the 2009 recession, discretionary spending went away as consumers focused on the essentials, Menear said during a March presentation at the Citi 2010 Retail Conference in New York. accordingly, Home Depot increased its focus on cleaning products, which were a growth category last year. "Shame on us for not being in 'cleaning' before," said chief financial officer Carol Tome at the conference.
Financial Performance
Sales in fiscal 2009 (ended Jan. 31) broke down as follows, according to the company's latest 10-K:
- plumbing, electrical and kitchen, 29.8%;
- hardware and seasonal, 29.1%;
- building materials, lumber and millwork, 21.9%; and
- paint and flooring, 19.2%.
Overall sales dropped 7.2% to $66.2 billion during the year
The company has begun to increase the number of store-level employees for the first time in four years after posting better-than-expected sales results in fourth-quarter 2009, according to an April report from Bloomberg News. "We have already added to our payroll this year," chief executive officer Frank Blake told Bloomberg. "As you have positive transaction growth, you need more associates to handle that in the stores. we are going to lean into our skis a little bit."
Marketing Expenditures
Gross advertising expenses in 2009 were $897.0 million, down 10% from the prior year, according to the 10-K. Co-op advertising allowances declined 2.0% to $105.0 million.
Store Growth
The Home Depot, Atlanta, operates 1,976 stores in the U.S., including eight in Puerto Rico, one in Guam and one in the Virgin Islands.
Published: May 2010
Source: In-Store Marketing Institute
Related Articles
- FSI Report: April 11, 2010 (Apr 14,2010)
- The Home Depot Field Report (April 6, 2010) (Apr 06,2010)
- Marketing at The Home Depot (Apr 20,2009)
- Home Depot Greens Up Stores with Eco Options (Apr 30,2007)
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The Home Depot Field Report (May 3, 2010)
