Home Depot Rides the Gray Wave
By Rick Moss
Acknowledging the National Retail Federation’s 2006 outlook calling for a cooling off in the housing boom to 4.7 percent growth from last year’s 6.1 percent, Home Depot CEO Robert
Nardelli expressed confidence in the spending power of baby boomers to keep the DIY market churning.
Addressing a standing room only “Super Session” at the NRF’s annual convention in Manhattan yesterday morning, Nardelli predicted that “as homes get older, consumers will move
from discretionary spending to refurbishing of homes.”
“On a macro level we are always sensitive to the economy and to interest rates but if you drilled down we’re also focused on change. Change is the only constant in our business.
We have to (constantly) address the evolving preferences of our customers,” Nardelli was quoted as saying in a CNN/Money article this morning.
How does Home Depot plan to mine the boomer segment as sales to contractors potentially slow? Among the strategies mentioned by Nardelli were technological advances, those claims
backed from the dais by John Chambers, president and chief executive of Cisco Systems, which is assisting the chain with systems upgrades.
Home Depot currently lays out $500 million to $600 million per year on technology, a large portion of which goes Cisco for website, in-store kiosk development and much that will
Highlighting the tech partnership with Cisco, Nardelli demonstrated how a customer could design a deck via the Home Depot website, creating a three-dimensional rendering, including
material and tools lists. Carrying the lists to the store on paper or PDA, the customer could also use an RFID-enabled cellphone that would trigger a greeting on the store monitors,
call up a store map on a kiosk yielding the location of products needed, and alert a store associate who would be waiting to answer questions.
Nardelli also saw growth potential for his company in the maturing ethnic market and what he identified as “do-it-for-me” services, a particularly important enhancement to cater
to the needs of older customers.
“The service market is a $110 billion market and we see it as another major trend,” he said. “We average 1.3 billion in-store transactions we want to equal this out of stores.”
Moderator’s Comment: How do you see the next 3 years for the D-I-Y channel? Will Robert Nardelli’s strategies to appeal more strongly to aging baby boomers
keep the momentum going while housing starts slow? –
Rick Moss – Moderator