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Home Depot accelerates delivery with new distribution centers

A customer wears a protective mask as he unloads purchases from a shopping cart outside a Home Depot Inc. store in Reston, Virginia on Thursday, May 21, 2020.

Andew Harrer | Bloomberg | Getty Images

Like many other buyers, Home Depot customers have little patience with long waiting times and shipping delays.

The hardware store announced on Tuesday that it would open three distribution centers in the Atlanta region over the next 1

8 months to meet expectations that have only increased since the pandemic.

“We want to say that retail has changed more in the past four years than in our 40-year history,” said Stephanie Smith, senior vice president of supply chain. “Covid has made this even clearer. Customers expect to be able to shop whenever and wherever they want.”

Smith said the pandemic emphasized the importance of a strong and flexible supply chain. As the corona virus spread, customers became even more interested in online purchases.

Home Depot has managed to meet customer demand for speed and convenience. Roadside pick-up started in late March and service is now available in most stores. Before the end of March, customers had to go in to pick up online purchases.

Home Depot’s online sales increased approximately 80% year over year in the first quarter that ended May 3. Around $ 4.2 billion, or about 15% of net sales, came from the online area. In more than 60% of cases, customers picked up these online orders from a store.

Online sales accelerated even before the pandemic. As of 2018, Home Depot launched an investment of $ 1.2 billion to open around 150 supply chain facilities in five years. The company builds various types of distribution centers to handle its wide range of products, from small drills to bulky items such as wooden pallets, and serves its mix of home improvement and professional home customers.

Home Depot wants to offer 90% of the US population same-day and next-day delivery. At the company’s analyst conference in December, it was said that approximately 50% of the US population had one-day delivery options.

The retailer has 2,293 stores and over 400,000 employees in the United States, Canada and Mexico. Almost half of sales – around 45% – come from home professionals, although they make up less than 5% of the customer base. These electricians, contractors, plumbers, and other professionals are one of the reasons why Home Depot focuses on finding ways to move bulky or heavy items such as closet doors or concrete quickly.

“It is a very strategic, important customer that we expect to grow a lot,” said Smith. “And in general, in our company’s history, it also works very well for our DIY customers if we develop something for our contractor or professional customers and do it right.”

One of Home Depot’s new facilities in Georgia will be a 657,600 square meter distribution center that will open by the end of the year. This helps to quickly replenish the stores in the southeast so that the products customers want are more in stock.

Another new facility is focused on products carried by panel vans, e.g. B. Local deliveries of vanities, cabinets and equipment.

The third is a flatbed delivery center that will open next year. This helps in the delivery of oversized building materials such as roofs, fences or drywall on the same day and the next day. Some deliveries go to the stores, others go directly to the construction sites of home professionals or home improvement customers.

Home Depot opened the first flatbed delivery center in Dallas earlier this year. It has since opened another one in Baltimore and plans to have around 30-35 in major US markets, Smith said. Platform trucks or railway wagons can be accommodated in the large buildings.

The company announced plans to hire 1,000 full-time and part-time employees for the three new facilities.

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