The Home Depot plans to invest $1.1 billion over three years in technology and its supply chain. A large chunk of that money is predicted to go towards web initiatives.
The company typically opens nearly 200 stores a year, but will only open less than 10 in 2011. The focus on the web is designed to increase web sales by 4% to 7% within the next four years. To reach this goal, the company must increase internet sales by five before by 2015, if total sales does not grow.
Sales on the web were about 0.8% of the company's total sales.
According to Forrester Research, the web will impact about 48% of Home Depot's sales in 2011, and that number is predicted to increase to 53% by 2014. Shoppers tend to seek information regarding goods online before purchasing in store locations, and recognizing this, Home Depot has decided to pour more money into its online presence.
Home Depot is also gearing up to provide additional products on its website for customers who prefer to buy online. It already has a feature that allows customers to check online to see if inventory is in stock. The company plans to create a feature that will let people buy merchandise online and pick their purchases up at the store, said Hal Lawton, president of Home Depot's online division.
Following the Web Trend
Other companies are following the trend, investing funds into the web to promote sales: Toys R Us, for example, opened an additional distribution center for orders placed on the web. The change was to accommodate web sales, which increased by 29.9% year-over-year for the year ended January 29, according to Toys R Us.
Key Statistics – US E-Commerce
- In 2011 the number of people in the US who use the internet will reach about 230 million, which is more than 70% of the population, according to yStats.
- At least 58% of users who shopped online in 2010 were women, yStats reports.
- Online retailers were the fasting-growing group in retail in 2010, having a compound annual growth rate of 15.84%, according to ICD Research.