Home Depot Inc.’s next refurbishment project: building out the capability to offer same-day delivery.
The retailer plans to spend at least $300 million on supply chain, technology and online improvements, including building new fulfillment centers and overhauling its warehouse technology systems. It plans to open three new fulfillment centers in California, Atlanta and Ohio over the next two years.
The moves are aimed at boosting online sales, including a same-day delivery service aimed at customers and professional contractors who might be in the midst of a home improvement product and want lumber, tiles or screws in a matter of hours.
“It’s a big investment,” Chief Financial Officer Carol Tome said during the retailer’s investor conference on Wednesday.
Retail heavyweights Wal-Mart Stores Inc. WMT +0.22% and Amazon.com Inc.AMZN -0.09% have both been testing same-day delivery in certain markets, but neither has rolled out the option to customers nationwide. Wal-Mart, which offers same-day delivery service in five markets, said customers have until noon to place orders on about 10,000 top-selling items and can choose a four-hour window to receive delivery.
Home Depot wants to allow shoppers to place orders by 5 p.m. and choose a one-hour delivery window. Customers will be able to receive real-time delivery updates via their mobile phones and choose from 100,000 items, said Mark Holifield, Home Depot’s senior vice president of supply chain.
Home Depot has all but halted its construction of new brick and mortar stores in the U.S. and is turning its focus to building out its online business. One key factor will be setting up a delivery and supply chain system that will enable same-day delivery. The big-box retailer also plans to begin fulfilling online orders from within its stores, rather than a warehouse or distribution center, to enable it to deliver 90% of orders to customers within two days. Currently, it takes between two and seven days for customers to get most orders, the chain said.
Home Depot said it expects its sales to hit $79 billion this fiscal year, returning to its 2006 peak sales levels. While a large part of that sales growth has come from the burgeoning housing recovery, online sales are also helping.
“In 2008, upon reaching what we believed to be market saturation, we slowed new store openings,” Ms. Tome said. “Now we believe our sales growth will be driven by a continued recovery in the housing market, as well as interconnected retail.”
In 2012, online sales represented 2.4% of the company’s $74.8 billion in 2012 net sales. Home Depot’s web sales are expected to increase by 50% this year to $2.7 billion.
The company also said it is looking at expanding in-home assembly and installation programs from appliances to patio furniture, grills and other items.
Earlier Wednesday, Home Depot for the year ending in January 2015 projected growth of about 17% in per-share earnings, while analysts polled by Thomson Reuters expected an 18% increase. It also sees sales rising about 5%, matching the consensus view, and operating margins to widen by 0.7 percentage points.
Meanwhile, the company expects to buy back about $5 billion in stock in the new year, up from this year’s target of about $4.5 billion, and projected capital spending of about $1.5 billion, matching the goal for the current year.
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Costco stands out over the holidays
/in Costco Wholesale, General Industry News, Warehouse Clubs /by tashmanHeavy discounting and slow traffic weighed on retailers’ December sales results, but Costco Wholesale Corp. ( COST ) was among the few that bucked the trend.
The wholesale club reported sales at stores open at least a year rose 5% for the month, topping expectations for a 2.6% increase. Among the stronger performing categories were garden, automotive, apparel, small appliances and home furnishings. The consumer electronics category posted improvement from recent months, but the metric still declined slightly.
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Costco co-founder Sinegal honored with top retail award
/in Costco Wholesale, Warehouse Clubs /by tashmanCostco Wholesale co-founder Jim Sinegal has been awarded the National Retail Federation’s Gold Medal Award, the organization said Tuesday. The trade association said that under Sinegal’s long tenure as chief executive the Issaquah-based company grew into the biggest warehouse-club retailer in the U.S.
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Lowe’s unveils latest features in Iris Smart Home Solutions at CES
/in Lowe's Home Improvement Warehouse /by tashmanNew Iris products and services will include a water shut-off valve that cuts supply when a leak is detected, a voice control feature,smart sprinkler systems, smart meter add-ons, universal garage door openers, additional energy saving devices and more.
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What is a Costco membership really worth?
/in Costco Wholesale, Warehouse Clubs /by tashmanCostco , Sam’s Club of Wal-Mart , and privately owned BJ’s Wholesale offer over 1,475 membership-only warehouse club locations throughout the world. In contrast to much of the rest of the retail industry, Costco has continued to outperform while increasing its membership and net sales annually. This is despite the pressure from online retailers like Amazon.com on the retail industry. Going forward, though, what is a Costco membership really worth?
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What has Walmart worried
/in Retailing Today, Sams, Walmart, Warehouse Clubs /by tashmanAsk six senior merchandising executives from Walmart and Sam’s Club what keeps them up at night and be prepared for an interesting collection of answers relating to key competitors and assorted challenges.
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Costco Slowly Shifting Sights to International Shores
/in Costco Wholesale, Uncategorized /by tashmanIssaquah-based Costco is giving more weight to international stores in its plans for expansion, as recovery in Europe presents new opportunities.
Costco Wholesale is gradually putting more chips overseas as it outgrows the U.S. market and green sprouts in a still shaky European economy present opportunities to the retail giant.
Fourteen of the 30 warehouses the Issaquah-based company plans to open during its fiscal 2014 are overseas, including two in Spain, the company’s first foray into continental Europe.
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Home Depot To Offer Same Day Delivery
/in The Home Depot, Uncategorized /by tashmanHome Depot Inc.’s next refurbishment project: building out the capability to offer same-day delivery.
The retailer plans to spend at least $300 million on supply chain, technology and online improvements, including building new fulfillment centers and overhauling its warehouse technology systems. It plans to open three new fulfillment centers in California, Atlanta and Ohio over the next two years.
The moves are aimed at boosting online sales, including a same-day delivery service aimed at customers and professional contractors who might be in the midst of a home improvement product and want lumber, tiles or screws in a matter of hours.
“It’s a big investment,” Chief Financial Officer Carol Tome said during the retailer’s investor conference on Wednesday.
Retail heavyweights Wal-Mart Stores Inc. WMT +0.22% and Amazon.com Inc.AMZN -0.09% have both been testing same-day delivery in certain markets, but neither has rolled out the option to customers nationwide. Wal-Mart, which offers same-day delivery service in five markets, said customers have until noon to place orders on about 10,000 top-selling items and can choose a four-hour window to receive delivery.
Home Depot wants to allow shoppers to place orders by 5 p.m. and choose a one-hour delivery window. Customers will be able to receive real-time delivery updates via their mobile phones and choose from 100,000 items, said Mark Holifield, Home Depot’s senior vice president of supply chain.
Home Depot has all but halted its construction of new brick and mortar stores in the U.S. and is turning its focus to building out its online business. One key factor will be setting up a delivery and supply chain system that will enable same-day delivery. The big-box retailer also plans to begin fulfilling online orders from within its stores, rather than a warehouse or distribution center, to enable it to deliver 90% of orders to customers within two days. Currently, it takes between two and seven days for customers to get most orders, the chain said.
Home Depot said it expects its sales to hit $79 billion this fiscal year, returning to its 2006 peak sales levels. While a large part of that sales growth has come from the burgeoning housing recovery, online sales are also helping.
“In 2008, upon reaching what we believed to be market saturation, we slowed new store openings,” Ms. Tome said. “Now we believe our sales growth will be driven by a continued recovery in the housing market, as well as interconnected retail.”
In 2012, online sales represented 2.4% of the company’s $74.8 billion in 2012 net sales. Home Depot’s web sales are expected to increase by 50% this year to $2.7 billion.
The company also said it is looking at expanding in-home assembly and installation programs from appliances to patio furniture, grills and other items.
Earlier Wednesday, Home Depot for the year ending in January 2015 projected growth of about 17% in per-share earnings, while analysts polled by Thomson Reuters expected an 18% increase. It also sees sales rising about 5%, matching the consensus view, and operating margins to widen by 0.7 percentage points.
Meanwhile, the company expects to buy back about $5 billion in stock in the new year, up from this year’s target of about $4.5 billion, and projected capital spending of about $1.5 billion, matching the goal for the current year.
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Amazon’s Pantry to take on Costco and Sam’s
/in Amazon.com, Costco Wholesale, Sams, Uncategorized /by tashmanSAN FRANCISCO — Amazon.com is working on a new business called Pantry that will help it expand further into the giant consumer package goods market and take on warehouse club stores Costco and Wal-Mart’s Sam’s Club, according to three people familiar with the effort.
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Home Depot Partners with Uber
/in Uncategorized /by tashmanHome Depot and Uber are joining forces to deliver Christmas trees provided by the big-box hardware retailer to the users of the app-based car service in 10 U.S. cities, the companies said Wednesday.
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Lowe’s Introduces Product Locator
/in Lowe's Home Improvement Warehouse /by tashmanMOORESVILLE, N.C., Nov. 27, 2013 /PRNewswire via COMTEX/ — Lowe’s Companies, Inc. LOW -0.04% and Point Inside, Inc. (www.pointinside.com) today announced that Lowe’s has integrated Point Inside’s StoreMode(TM) mobile shopper engagement platform into the Lowe’s mobile app to improve the in-store customer experience. Shoppers at all Lowe’s locations can use the Product Locator capability to search for products and instantly see the items’ locations on a detailed store map using Lowe’s iOS and Android mobile apps or Lowe’s mobile-optimized website.
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