Home Depot Supplies Everything for Job Sites
By George Anderson
If you’re going to work on a construction job in the Nashville, Tenn. area, Home Depot has everything you need — tools, lumber, paint, lighting, gasoline and beer. Beer?
The leading DIY store announced it plans to begin testing four convenience stores with gas stations and car washes (two locations) this December at properties located in Hermitage, Brentwood, Franklin and Lebanon, Tenn.
“Now, they’ll be able to get everything they need for the job site from lumber and tools to breakfast and lunch,” said Home Depot spokesperson Paula Smith. “They’ll be able to keep their whole crew at the site all day, because time is money for them.”
In a released statement, the company said it was undertaking the test because it believes the convenience store concept could add to its “top line growth” and bring in additional consumer traffic to its stores.
Moderator’s Comment: What do you think about Home Depot’s test of convenience/gas stores? What will be different
about running this business compared to the company’s core business? –
George Anderson – Moderator
Go for it. If you’ve got the real estate not being used, there’s no reason not to try. Key will be to keep the c-store distinct from the main store. If they start blending SKUs between the c-store and the main store, it will be a quick downward spiral. Their better option would be to have an existing c-store operator develop and run the sites for them. This would allow everyone to keep their focus on the part they do best.
Home Depot interviewed a friend with proven expertise in c-stores several months ago and they had a team of MBA’s on the case. These MBA’s didn’t want the stores to sell tobacco; didn’t understand the importance of a good coffee program or even how much space it takes to sell coffee to 20 people at the same time. A long way to execution.
When a company (Home Depot) gets so large and captures huge SOM, it must continually try out new ideas to sustain its leadership role. While we can challenge (or poo poo) whether this idea can be successfully implemented, we must remind ourselves that you cannot shoot an idea. An idea, once it is with us, will grow or die by its own substance.
With all the parking lot real estate surrounding most of their stores, Home Depot is smart to test gas station installations and — by extension — all the goodies that blue-collar males like to buy. It’s about time that a DIY chain realized they shared this demographic that’s so important to convenience stores.
Those of us who’ve worked in or near the construction industry, however, are critically aware of the on-the-job alcohol consumption that’s already rife in the business. Construction workers don’t need any encouragement — or a more convenient supply source — in this area.
There are many 7-Eleven expatriates in the job market who are expert C-Store veterans. Home Depot would be wise to locate some of them. C-Store expertise is absorbed over the years, not from a book or research findings.
Well, if the particular MBAs cited get their mitts on this project, it’s doomed. But it’s a great idea. You will definitely need cigs and coffee, no question. I do suspect a lot of the work crews I see at Home Depot in the morning would just as soon not have to make a second stop for their lunches and drinks and cigs. And never mind the work crews, the demographic I see shopping Home Depots (me included) are just the types who also hit C-Stores. So in my book, Home Depot should do this. May have to tweak it a bit as they go along, but I see strong potential here.
What a great bit of lateral thinking.
HD is to be congratulated for “thinking outside the box.” But I have a feeling they’d do better to sell products/services that relate more directly to their core competencies and customers’ needs. Costco is starting to sell insurance, for example. If HD sold insurance to contractors at discount prices, there’d be no inventory investment…and finding experienced insurance salespeople is not hard. With the graying of America, if HD used its web site to connect contractors/craftspeople with homeowners who need them (not everyone can “do it her/him self”), the core business would be reinforced. (And this suggestion requires no new inventory or real estate, either.) These 2 ideas might not be optimal, but surely there ought to be new ways to grow that relate more closely to reinforcing the main business.