The Home Depot Inc.’s E-Commerce Strategy

Subject: Case Studies
Pages: 6
Words: 1386
Reading time:
6 min
Study level: Bachelor

Alternatives that The Home Depot must consider to realize growth

The Home Depot must consider establishing its online stores within other online stores that are already established. Although the company already has a presence on e-commerce with its ‘buy online, pick in store’ concept, the company still lags behind other businesses like Amazon that have a fully established online retail store. A full online store allows customers to shop and ship goods to their addresses at their convenience. Moreover, the store can ensure that goods are delivered within the specified duration as expected by customers. As people become busier in their individual lives, the need for having additional support in shopping continues to rise. The concept of buying online and picking at the store is good and has served The Home Depot well for a while. However, the concept is easy to copy and does not give the company a significant boost in its competitiveness (Edmiston, 2015).

With a partnership for online retailing that also caters for shipping, The Home Depot can leapfrog its competitors who seek to establish full online retailing alternatives. It will not lose significant control over its merchandise and customer intelligence options. With the prescribed partnership, the company will still get notifications about stock movements and be in charge of shipping or making shipping arrangements with third-party logistics providers to ensure that customers get goods orders in time. Besides, it can keep on building its brand reputation by establishing a call center to handle online queries for its ‘buy online, pick in store’ concept, as well as the full online store option. This will be an extension of the company’s current strategy of using holistic multichannel option for offering retail services (Wallace, 2015).

Best Value Discipline for The Home Depot

The Home Depot continues to define the value for customers, and it should continue using the strategy. The action continues to raise customer expectations beyond what the competition can offer, which is the main reason why the business has succeeded so far. The best value discipline for The Home Depot is to pursue customer intimacy so that it targets particular groups of clients or individual customers with offers, services, and relationships that are meaningful to both the business and the customer. Customer intimacy as a value discipline will ensure that differentiation attempts by the company bring favorable outcomes in customer numbers, sales revenues, and employee engagement (Hill, Jones, & Schilling, 2014).

In essence, The Home Depot will align its operating model to serve customer intimacy by focusing on customer intimacy and working to meet industry standards in other disciplines at the same time. The company culture and business practices will be executed in terms of what is best for clients and what can lead to improved customer intimacy. The advantage of this approach is that it will lead to a unique understanding of clients and a buildup of a serious relationship that will help The Home Depot to create a brand personality which is hard to imitate.

Customer intimacy requires spending now and building loyalty in the long-term. Rather than concentrate on one-time purchases, The Home Depot can instead be focused on the lifetime value it gets from customers due to its focus on better customer interactions. When customers get the right product and receive the correct information about the product they get, they have a pleasant consumption experience, which leads to their attachment to the store where they bought the product. The customers are more likely to recommend and influence others to use the same store, which causes an increase in the demand for The Home Depot services (Nasir, 2015).

Best Generic Strategy for The Home Depot

The Home Depot entered its market with an emphasis on low prices for conventional consumer goods daily, and it has been able to defend its market position with the same strategy. However, other companies are also using the same strategy. At the same time, other companies are investing in chain growth to give them significant economies of scale. The rivalry in the industry is very tough. Consequently, The Home Depot will have to embrace customer service improvements to continue enjoying favorable returns. In this regard, the company should pursue a generic strategy of differentiation. The company needs to focus more on delivering high quality customer care so that it can differentiate itself from the rival companies that can quickly copy its low-cost strategy by having centralized purchasing and distribution centers that use technological advances to keep the retailing costs low (Goodman, 2009).

For customer services, The Home Depot needs to move beyond the service that customers get when they are checking out, and instead present a holistic view of customer experience when dealing with The Home Depot brand. This will entail spending more time listening to customers and improving the turnaround for customer complaints’ feedback. It will also require having support workers who are experts in different fields to give customers informed advice about their purchases and working with suppliers and manufacturers to ensure that there is sufficient communication of product features and value to customers when they shop at The Home Depot.

Best Grand Strategy for The Home Depot

The best grand strategy for The Home Depot is market growth. This low-risk approach will allow it to focus on growing its market as a retail business, with the focus being on the expansion of the current business. Investing in any other strategy, such as product development, might appear lucrative, but it will also carry a high risk of derailing the company from its primary objective of ensuring that it dominates the retail business sector and supports customer intimacy with all the products and services it offers. Working with a market growth grand strategy will enable The Home Depot to improve its services and products and embrace new opportunities for growth, such as expansion of its physical stores and adoption of new retailing avenues like internet commerce without having to incur significant costs of development.

The cost-effective attribute of the market growth strategy also ensures that the business does not succumb to cash limitations that can cause it to make abrupt stops to ongoing developments. Market growth also ensures that the employee culture and organization traditions are not affected by changes in the business structure. The continuity of these factors translates to commitment for customer intimacy, which eventually rewards the business with improved revenue growth. The Home Depot’s retail business is at a mature stage that requires improvement rather than overhauls. It implies that there is a need to focus on growth rather than alternative grand strategy options.

As a dominant retailer in the United States, with about 60% of the revenues and a growing stock price, the company needs to ensure that it retains its growth momentum. Therefore, the recommended strategy for The Home Depot is to focus on differentiation in its customer service. The strategy will be a combination of customer intimacy and use of technology to improve the overall customer experience while shopping. The company is currently at an advanced stage of implementing new technological solutions that can cut the time spent by customers queuing to check out in its physical stores (Team, 2015). It is equipping its in-store staff with smart devices that allow mobile checkout options and allow workers to make random checks on inventory, customer information, and production information. These devices will continue assisting the company to achieve its objective of ensuring that employees become experts in the products that they sell to customers. It will also ensure that the enterprise gains additional information about customers by providing various options for collecting customer feedback.

The overall result of the differentiation strategy for The Home Depot will be improved decision making, which will extend to shipping and sales forecasting. In retailing, a reduction in the lag between product selection and product consumption improves customer experience dramatically. Therefore, continuing with this strategy will ensure that The Home Depot retains its number one retailer position in its home market. A focus on customer service will also allow the company to withstand economic recession shocks that tend to increase the rivalry of retail businesses negatively. Differentiation will also contribute to additional competitiveness for The Home Depot, which will give it a competitive edge over the rivals.


Edmiston, D. (2015). Strategic digital marketing. Journal of Product & Brand Management, 24(1), 90-91.

Goodman, J. A. (2009). Strategic customer service. New York, NY: AMACOM.

Hill, C., Jones, G., & Schilling, M. (2014). Strategic management theory: An integrated approach (11th ed.). Stamford, CT: Cengage Learning.

Nasir, S. (2015). Customer relationship management in the digital era. Hershey, PA: Business Science Reference.

Team, T. (2015). Home Depot: four factors to watch out for in 2015. Forbes. Web.

Wallace, T. (2015). Home Depot’s innovative, successful multichannel strategy your brand should copy now. Business 2 Community. Web.