As the housing market continues to rebound, Home Depot (NYSE:HD) is making some improvements of its own. The company announced that it is planning to launch a same-day delivery service to provide homeowners and contractors with building supplies in a cinch.
Home Depot wants its shoppers to have the ability to have orders placed by 5 p.m. to be shipped out that same evening. Customers will have access to real-time updates through mobile devices and will be able to choose from 100,000 items. The world's largest home improvement retailer made the announcement Wednesday during its investors conference.
In order to make way for the service, Home Depot said it plans to spend at least $300 million on supply chain, technology and online improvements in the fiscal year that begins in February. The funds will go toward revamping its warehouse technology systems and building three new fulfillment centers in California, Atlanta and Ohio. The warehouses will range in size from under 1 million to over 1.5 million square feet.
Home Depot execs began thinking about same-day service after noticing that online sales have surged 50 percent year-over-year and account for 3 percent of total sales. As more customers head to the Web to stock up on home supplies, the company said it is halting construction on bricks-and-mortar stores to invest more resources into e-commerce.
Home Depot also noted that it is on track to meet its long-term financial goals a year earlier than expected. The do-it-yourself chain said it anticipates reaching an operating margin of around 12 percent and a return on invested capital of 24 percent by the end of 2014.
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