Home Depot Transforms Systems for Same Day Delivery
Add Home Depot (NYSE: HD) to the growing list of major U.S retail chains offering same day delivery. Starting next year, the national home improvement retailer plans to spend at least $300 million on supply chain improvements to increase online sales and offer same day delivery service. Home Depot plans to open three new fulfillment centers in California, Atlanta and Ohio over the next two years, The Wall Street Journal reported. It will also transform its warehouse technology systems and add same-day delivery service for professional contractors as well as customers who are in the middle of projects and need supplies within hours. "It's a big investment," CFO Carol Tome said during Home Depot’s recent investor conference call, The Wall Street Journal reported. Home Depot joins Amazon (NASDAQ: AMZN), eBay (NASDAQ: EBAY) and brick-and-mortar stores such as Walmart (NYSE: WMT) now offering same day delivery. eBay is expanding its same-day delivery service to 25 cities next year, after purchasing London-based delivery platform Shutl. The online retail giant’s eBay Now delivery service is already live in New York, San Francisco, and Chicago, and will be available in Dallas in a few weeks. Next year, cities such as London will receive the service, bringing the total to 25. And this fall, Walmart said it is expanding its same-day grocery delivery service, to Denver, Colo., after testing the service in San Jose and San Francisco for two years. The move by the world’s largest retailer allows it to boost grocery orders from its web site during the busy holiday season. For its same-day delivery service, Mark Holifield, Home Depot's senior vice president of supply chain, said shoppers will be able to receive real-time delivery updates via their mobile phones and choose from 100,000 items. In addition to offering same-day delivery, Home Depot is building out warehouse systems and technology so it can begin fulfilling more online orders from within its stores. Its goal is to deliver 90 percent of orders to customers within two days, instead of the current two- to seven-day window it takes for customers to get most orders. Unlike some other national brick-and-mortar chains, Home Depot executives are smartly focusing the company’s financial investment on growing online sales, rather than its brick-and-mortar stores. "In 2008, upon reaching what we believed to be market saturation, we slowed new store openings," Tome said during the conference call. "Now we believe our sales growth will be driven by a continued recovery in the housing market, as well as interconnected retail."