Home Depot Shows Growing Share Sometimes Requires Adding Capabilities

It happens a lot in business. You have a traditional segment (say the consumer/SMB). Now you have a fast-growing segment (the professional/Enterprise). While growth in this new segment might continue for a while, sometimes unlocking the next phase of growth requires doing business differently.

In Home Depot's case, the traditional organization can offer stores and digital tools, but if you are an independent professional building contractor, you need improved and deeper selection, and improved fulfillment and service options.

In it's announcement, Home Depot mentioned being able to serve "a complex project purchase occasion". This means buying many different items, with dependencies and fit concerns, over a number of months, sometimes across multiple job sites. Home Depot realized there was an adjacent network of independent distributors and service locations that it could grow into, and so it did.

In the eCommerce software world there is not an exact analogy but this would be like Adobe or Oracle acquiring someone like Accenture. Owning the sale, configuration, and distribution into large accounts.

Could it happen? Sure. Will it happen? Not likely. Most software companies want to stick to their lane.

The retail world, on the other hand is changing. Building service, fulfillment and distribution is becoming table stakes. What's likely to happen in a case like this is Home Depot will make further similar acquisitions, perhaps across other verticals, and its competitors and partners in private equity will take notice too.

More value chain verticalization seems on the horizon in this environment.

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
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