Home Depot Invests $60 Million in Handheld Devices

Discussion
Jan 21, 2010

By
Tom Ryan

Home
Depot Inc. will hand over 10,000 portable devices to its store associates
in 2010 to help them stock shelves, locate inventory, make telephone
calls and check out customers throughout the store.

The
$60 million investment will be Home Depot’s biggest capital expenditure
this year.

“If
you compare us to a world-class retailer, from a technology perspective,
1991 is kind of where we are pegged,” Matt Carey, Home Depot’s chief
information officer, told Bloomberg
News.
“This
is the first big customer-service tool we’ve given our associates in
a very long time.”

The
technology includes mobile-telephone calling, walkie-talkie communications
among employees, and inventory management in a single device, Mr. Carey
said.

Previously,
Home Depot managed inventory by using computers powered by motorboat
batteries on rolling carts. In testing the devices last year, Home Depot
found that employees spent less time finding products within a store
and researching the amount in stock or availability at another
store. By clicking an icon on the screen, Home Depot workers can tell
customers when an out-of-stock item will be replenished. Or employees
can use the device to call other Home Depot stores and ask them to hold
merchandise. An attachment to the device processes credit and debit cards,
allowing purchases to be made away from the checkout registers, similar
to transactions at Apple’s stores.

At
least five of the handheld gadgets will be distributed to each of Home
Depot’s 2,000 U.S. stores this year, starting in the first quarter.

Home
Depot’s handhelds are similar to those used at Lowe’s in enabling associates
to track inventory and locate items. Lowe’s employees can start customers’
purchases throughout the store, with cashiers completing the transactions
by typing in the shoppers’ phone numbers.

Discussion
Questions: What features on handheld devices will do the most to improve
the customer experience?
What other retail channels outside DIY could benefit most from such devices
and in what ways?

Join the Discussion!

16 Comments on "Home Depot Invests $60 Million in Handheld Devices"

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Dick Seesel
Guest
7 years 10 months ago

Apple stores have been using handheld technology for years, and the surprise is that other retailers (from DIY to discounters) have been so slow to react. This is a great technology for tracking inventory and especially for getting customers out the door more quickly (better than, say, self-checkout). It’s easy to see other, sales-driving uses for handheld technology–such as issuing “instant coupons” to customers using a database that can pull up their purchase preferences from their phone numbers. $60 million seems like a modest investment in this kind of technology.

Charlie Moro
Guest
Charlie Moro
7 years 10 months ago
I am sure there are benefits to this technology upgrade that I am not giving credit to but as it pertains to customer service, I see other issues that should/could be addressed. If the strategy for self checkout is a priority, why not upgrade the amount of terminals along with scanning wands that can more easily check out larger items that do not fit on the scanner while you wait for the lead cashier. Doesn’t checking me out in the back of the store remove me from the impulse shopping experience you have spent time creating at the front of the store? Why do associates need a phone? Do we envision conversations we will need to interrupt to get service? Why not just walk us to where we need to find the item we are looking for? The advantage of a smaller hardware store in this big box environment is the conversation of how I best do a repair or the item I need to complete a job, maybe interactive kiosks in every department could… Read more »
Max Goldberg
Guest
7 years 10 months ago

This is a good step in customer service for Home Depot. It saves consumers time and creates a more consumer-friendly environment. Of particular note is the ability for an associate on the floor to help a consumer complete his transaction without having to go through a cashier line. Home Depot never seems to have enough cashiers and their self-checkout machines work without assistance about 50% of the time. I’d like to see other retailers adopt similar handheld devices.

Doron Levy
Guest
Doron Levy
7 years 10 months ago

The biggest challenge for associates on the sales is finding stock availability either at that location or others. As long as these handhelds are tied into the chain’s network, I can see them making the associates’ job much easier. Now that they have the tech, all they have to do is actually train their associates to serve customers and all will be well at HD.

Susan Rider
Guest
Susan Rider
7 years 10 months ago

Putting technology at associates’ fingertips is a great thing but I think focusing on the features is a mistake. The main problem at their stores is training. The training should be the focus. All the tools in the world are useless unless they train and educate the associates. This isn’t a one-time thing, with store turnover, this is a ongoing effort with discipline and a budget. Many times, companies spend millions of dollars on technology and two years later all those sexy features are not being used because no one invested in training.

Vahe Katros
Guest
7 years 10 months ago

With sales people on the internet, it might be nice to make them available to answer questions using voice over the internet (VOIP). Solve the problem or part of it before the visit, perhaps even let the customer know what the salesperson needs to see to completely solve the issue (photo’s, measurements), etc. They should think outside the (big) box, and think about the total customer solution–that’s how you get advocacy and win folks (correct)–thinking outside the box yields:

(1) Home Depot connects with suppliers so questions they can’t answer go right into a high priority call center for say…the makers of a power tool, at the shelf.
(2) Customers can schedule installation and contractor work, while at the shelf (it happens anyway).
(3) Relationships with local firms that do complementary work so that they are accessible at the shelf.

And other DIY categories that have a tight window or project nature (Saturday errands, etc) such as Hard Goods, Bridal, Sporting Goods, Consumer Electronics, Office Supplies….

Joel Warady
Guest
Joel Warady
7 years 10 months ago
This is a great start for Home Depot but there is so much more that they can do with handheld if they really want to be a customer-centric retailer. 1. Why not have video access on the handhelds? When a customer asks them how a certain product should be used, or how a large piece of home repair should be installed, they could call up the video, right there on the handheld, and show the customer what is involved. 2. As a follow up on the the video, every inventory item–especially those items that require installation–should be cross-referenced in a database stating what tools will be needed for a proper install. Then, when the customer asks where an item is in the store, and the Home Depot employees pull it up on the locator, they can also recommend to the customer that they will need the following tools for installation. This could lead to a potential upsell. 3. The employee should have the ability to capture both the name and the email address of the… Read more »
Ben Sprecher
Guest
Ben Sprecher
7 years 10 months ago
I think there’s a great opportunity to use handheld devices to increase customer service in the store. I can’t remember the last time I went to a hardware store where I *didn’t* ask an employee for some kind of help. The simple stuff (“where can I find extension chords?”) should be easy, but often my questions are more intricate (“what type of nails should I use to re-attach my aluminum gutter?”). And often, that type of question leads to a shrug, or a 10-minute wait for the one guy in the store who knows something about gutter nails. I would love to see the store employees backed up by a call-center of experts who could quickly resolve these types of advice questions. If a customer asks an employee a question that they can’t answer well, they should immediately connect the customer to the experts for advice. Of course, this doesn’t have to be a handheld device…it could be a series of phones or kiosks around the store, but it’s often helpful to have the discussion… Read more »
Carol Spieckerman
Guest
7 years 10 months ago

Wise investment, Home Depot! To me, the most important feature is one of the most basic: having the ability to determine the amount and location of back stock. Twice in the past month, store associates have told me that they “know” they have more of an item but that they have no idea where to find it! Second to that would be knowing when additional stock will be available and/or quickly determining if another location has the stock and if so, presenting the option to ship it directly to the customer or to the store.

Paula Rosenblum
Guest
7 years 10 months ago

Way to go, Home Depot!

The choices above don’t get to the heart of the matter. The customer already has handheld devices in hand that educate and empower him or her. At least this puts the employee on a level playing field.

From there, real-time alerts to associates and managers will help the store meet customer expectations.

Well done, and a great beginning.

Brian Kelly
Guest
7 years 10 months ago

Here is what matters: access to data.

The device is an enabler of that data. Good news is THD now has access to its data. It is available at POS and now in an aisle too. A SINGLE VIEW. As consumer expectations shift, due to Apple (handheld devices) or WalMart (order online, pick up in store), THD now can meet or exceed that consumer expectation in service.

Well done, Home Depot; it cost a lot of money and hours to pull it off. Blake has learned, retail ain’t for sissies.

Now what to do with all that data….

James Tenser
Guest
7 years 10 months ago
I’m a bit skeptical about this huge investment to support somewhat pedestrian capabilities. Helping shoppers locate desired items is good service to be sure, but what does “manage inventory” mean in the context of these $600 devices? And in-aisle cashiering is a nice-to-do, but how often is this likely to be of interest to the HD shopper? The real customer service payback from equipping HD employees with mobile devices would come from maintaining optimal selling conditions at the shelf, especially item availability (aka “in-stock”). If these devices support a feedback process that supports store staff detecting and correcting shelf conditions, then we’re talking innovation. Handhelds and their associated network may also support some workforce and store execution management functions–pushing tasks out to the right people at the right time. Ideally this would include the myriad supplier reps who perform merchandising tasks inside HD stores. With all this potential, deploying just five devices per store seems woefully inadequate, which implies to me that the unit cost is a huge limitation. Wouldn’t it be wiser to use… Read more »
Cathy Hotka
Guest
7 years 10 months ago

Vahe’s right. One important opportunity here is to give key associates a unique phone number, so that expertise inquiries can be answered by a highly qualified and knowledgeable expert, and questions from customers who speak Vietnamese or Portuguese can be answered by a native speaker. Good move!

Mark Burr
Guest
7 years 10 months ago
Getting served at a HD hasn’t been my problem in their stores. Finding product has, as well as product that is not broken, all the parts are included, or haven’t already been returned. I’ve yet to buy a larger purchase item at HD that hasn’t had to be returned. Yes, never, ever. They’ve made huge leaps in service level but their lack of quality products beyond the lowest price point available hinders me more in their stores. While I believe they are doing a good thing with these devices and encourage it, it’s not the area of focus that I see necessary. Why would I want to check out remotely and then stop again to prove that I checked out remotely? Why not save the hassle and reproach of feeling like a thief simply by checking out normally? And, as I mentioned, I’ve never seen problems with their service levels of late. The devices would be a huge help in managing inventory and determining whether inventory was available at a another location. Yet, I wonder… Read more »
Ted Hurlbut
Guest
Ted Hurlbut
7 years 10 months ago

I think the biggest boost will be that it creates a greater focus on inventory management. Associates will be able to address out-of-stock issues in a more direct manner, and make them more aware of inventory-related issues. This will improve the service customers receive.

Remote checkout is also a big plus, and may end up being the most visible customer benefit, especially for those customers with oversized items and carts.

Richard Beal
Guest
Richard Beal
7 years 10 months ago

Home Depot’s present inventory system allows only one location code per SKU, therefore, back stock locations cannot be tracked. Finding back stock in the overhead is strictly a manual exercise and countless man hours are wasted as employees roam the aisles gawking at the ceilings in hopes of filling an empty bin.

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