Home Depot Learns The Best Laid Plans Lesson, In Spanish

It's human nature for business executives to take comfort in the belief that any major failure is the result of insufficient prep or someone having made the wrong assumptions. But Home Depot this month pulled the plug on a Spanish language version of its E-Commerce site after only six months, following an extensive seemingly properly executed series of consumer studies, surveys, focus groups and marketplace analysis.

The original goal was simply to make the site more appealing to Spanish-speaking customers of the $71 billion home improvement chain, who often prefer shopping in Spanish. But when the site launched, it had far fewer visitors than expected and many of the consumers who did visit clicked from other countries.

"Most notably, the visitors were not in a country where we do business," said Ron DeFeo, Home Depot's director of corporate communications. "The traffic overall was low so when you add in the fact that half aren't even going to be customers," the project quickly started to not make any sense.

But given that the overwhelming majority of the programming and design investment had already been paid, why pull the plug only six months after the site's November launch? "Web sales are traditionally higher during the holiday season and we didn't see the site performing to our expectations. The cost to update and maintain the site exceeded the amount of profit generated. The dollars can be used in more effective ways."

DeFeo then sounded a tune that is becoming quite familiar in these economic crunch months. Joining the ranks of Borders and Canadian Tire, Home Depot has decided to now give unconditional priority to in-store operations. "I'm not saying that we're not going to revisit (the Web), but our focus now is at the store level. The bulk of our sales are from the stores."

Accepting for the moment—and given Home Depot's reputation for thoroughness, it's a very likely scenario—that the chain did everything that could have reasonably been done before launch, could the site have suffered from an overabundance of "if we build it, they shall come" attitude?The visits from Spanish-speakers consumers in other countries is certainly not surprising, given the pathetically small number of major E-Commerce sites that exist globally that are not in English. The hunger for Spanish sites from major retailers is huge. But why so few U.S. visitors? Was the new site insufficiently marketed to the Spanish-speaking world? Or was it more along the lines that sites such as this spread by word-of-mouth and that it simply takes time. Had Home Depot waited another five months, would it have been more likely to see a return?

We've written before about the recession-fueled panic that we're seeing in retail today, a panic that is pushing decisions that are often too fast or too non-strategic. When the smoke clears, will the survivors celebrate? Or will they more likely say, "Uh-oh. What were we thinking?"

Also, the conclusion that most of the visitors were from countries that did have any Home Depots—and that, therefore, they were worthless and posed no potential for future sales—may have been flawed. Presumably, it was based on IP addresses located elsewhere. Could some of those have been Americans visiting friends or family in other countries? Or perhaps residents of those countries planning to visit—or even to move to—the U.S.? It's easy to overinterpret Web stats.

To Home Depot's point, though, why would people in countries where the chain doesn't exist, why would they visit Home Depot's site? With all due respect to our friends at Home Depot's Atlanta headquarters, their site is useful and informative, but it's hard to think of it as fun and entertaining. Presumably, the visitors had a reason for looking and, presumably, those visitors likely thought they might be able to visit a Home Depot store soon. Either that or they're really bored.

If a chain like Home Depot can get panicked in shutting down a Spanish language version of its site so quickly, the chance for calm and strategic decisions from the rest of the industry is looking increasingly less likely.

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