Home Depot’s Innovative, Successful Multichannel Strategy Your Brand Should Copy –– Now

We live in a multichannel world –– that much is clear. We work on computers when at a desk, a tablet when lounging at home and on our phones when on-the-go (though state laws are increasingly reminding us that this is not a good idea). In fact, not only is our attention spread thin across multiple technologies, but we ourselves have become multichannel –– with profiles, interactions and personal transactions that take place across Facebook, Twitter, Instagram and LinkedIn, to name only a few.

This natural evolution into multichannel management in both our personal and professional lives is causing quite the disruption in the commerce industry. Long heralded as the strategie extraordinaire, retailers have worked hard to gain ground in the perfect physical space, bought search engine optimized domains and integrated feeds into their ecommerce technology backends to ensure products that work well on marketplaces (like Amazon or Etsy) automatically show up there. You know this strategy well as a life-long consumer living in a capitalist world. After all, it is marketing 101: be everywhere your customers are.

It is marketing 101: be everywhere your customers are.

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The issue isn’t the managing of multichannel commerce. No, the issue is instead the seamless integration and cohesion of those channels. Retailers are testing every possible idea in order to provide a digital experience in the physical world, and a physical experience in the digital world. Many ecommerce stores feature videos of their products to give online customers a more in-store feel of the product. Others, like Neiman Marcus, have built in-store tablets, so to speak, so that customers can order the exact product they want whether or not the store they are in currently has it in stock.

One strategy working consistently well for retailers with both a brick-and-mortar and online presence is in-store pickup –– and an unlikely brand is leading the charge.

Home Depot’s Holistic Multichannel Strategy

Over the past several years, Home Depot has invested nearly $300 million into upgrading its ecommerce offering –– specifically focusing on distribution capability, supply chain management and fully integrating their web and store inventory. In 2014, the company’s investment began to seriously pay off, to the tune of $3.5 billion in online sales –– an increase of $1 billion from the year prior.

Home Depot has invested nearly $300 million into upgrading its ecommerce offering.

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More impressive, though, than the supplier’s ecommerce revenue is that nearly half of their ecommerce transactions involve in-store pickup.

“About 40% of our orders leverage our existing physical assets,” said Kevin Hofmann, Home Depot senior vice president and president of online, at last week’s sixth annual Goldman Sachs dotCommerce conference.

And with the buy online, pickup in store option continuing to be the brand’s fastest growing ecommerce channel, the company is focusing on another area as well: figuring out how to use those fleeting in-store moments to remind customers of the additional value-adds available mere feet from where they are picking up an online order.

40% of our online orders leverage our existing physical assets.

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“We always talk about Home Depot [as a store] for what you thought you wanted but you leave with what you really needed. So, as you come into pick up that order, [we’re thinking about] how we can remind you of the other great values and the other great offers we’ve got in our store. That’s another area of focus for us: how we leverage and monetize those footsteps.”

Of course, Home Depot isn’t the only retailer succeeding in combining online and offline commerce. Indeed, brands from Walmart to Apple are testing out the order online, pickup in store option, and to impressive results.

Walmart, for instance, began testing out grocery pickup facilities in five U.S. cities over the course of the last eight months. These facilities allow customers to order online and drive-thru to pick up their items in as little as two hours after the digital purchase. These facilities will also deliver groceries to central offices including campuses, for instance. So far, Walmart executives are pleased with the results of interweaving digital and physical offerings.

We’re uniquely positioned to allow customers to shop how, where and when they want.

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“Our customers needs are changing very rapidly. They’re more digitally engaged than ever before. They have more choices than ever before. And they are telling us they want more convenience and more simplicity and that’s what we’re trying to achieve with this test,” said Jane Ewing, SVP of central operations for Walmart U.S. “We believe we’re uniquely positioned to allow our customers to shop how they want, where they want and when they want.”

Uber and Amazon are also testing out local, speedy delivery options for online customers. While apps including Instacart and Drizly, the former dedicated to grocery delivery and the latter to alcohol delivery, have been gaining mass popularity throughout 2015.

It is now a customer expectation that your brand be multichannel.

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In all, the multichannel movement has come and gone. It is now a customer expectation that your brand be on social media, have its own website, be easily findable on Amazon and perhaps even have a brick-and-mortar the customer can visit, whether they are a local or just a passing tourist. And now, customer-centric brands are taking multichannel one step further –– fully integrating the online and offline experiences to maximize convenience, brand awareness, customer service and even average order value.

If you are a brick-and-mortar with an online presence, it is a wise time to begin offering in-store pickup for your digital customers. After all, the big box brands are continuing to prove its value.

Here are 31 expert tips on multichannel retail to help you dominate this ever-changing world.

Photo: Flickr, Mike Mozart