Getting serious about pros: Depot focuses on attracting more professional customers by rolling out a new format - Home Depot: A Different Direction - new Phoenix store debuting services and products for the construction industry

Home Channel News, Dec 17, 2001 by Brae Canlen

It's not a position Home Depot finds itself in very of ten: that of the underdog, the smaller player, the nascent retailer facing a steep learning curve.

The Home Depot pro store, which opened in Phoenix last July, is only the company's second pilot of a format that caters exclusively to the building trades. Four more will open next year, when Home Depot will begin, on a test basis, to hire an outside sales force. In addition, Home Depot will roll out its "pro initiative" program, now in nearly 500 stores, to 966 units by the end of 2002. The "pros only" stores, combined with the "pro initiative" program, signal a new determination on the part of the Atlanta retailer to woo the professional customer, who spends three times more than consumers on a typical Home Depot shopping trip. But can Home Depot really change its DIY spots, especially in the eyes of the average contractor?.

Home Depot has been dancing around the $276 billion professional market for several years now. In 1998, the company opened its first Home Depot pro store in Colma, Calif., just outside San Francisco. But the purpose of the unit, according to company officials at the time, was to siphon off traffic from an exceptionally busy Home Depot store across the street. In 1997, pro customers accounted for 25 percent to 30 percent of a typical store's sales, according to the company. That same year, Home Depot also launched its "pro initiative," an offering of contractor-oriented merchandise and services, in four stores in Austin and San Antonio, Texas.

But job site deliveries and free coffee at the pro desk won't bring in the bulk of a contractor's business. "We haven't really connected on this as we should," said Tom Taylor, senior vp-professional business at Home Depot. "What we learned in Colma is that the store has to be different from a service aspect," he explained. The store must also look different, Taylor said, adding: "Each department should feel like a little supply house."

To achieve these goals, Home Depot installed a "dedicated trade desk" in each department of its new 95,000-square-foot pro store in Phoenix. Plumbing, electrical, paint, and other core categories have their own staff and separate fax lines. The main aisles of the store are 10 feet wide (regular Home Depots are only eight feet) and uncluttered with pallet displays and other merchandise obstacles. The pro stores have their own logo and color scheme (yellow and black) that brands everything from aisle markers to business cards. The most noticeable difference about the pro stores, however, is the lack of foot traffic. On a recent Friday, only a few customers milled about the pro unit in Phoenix. Less than a half mile away, a sister Home Depot served a bustling crowd of DIYers and contractors.

This didn't seem to bother assistant store manager Gary Lewallen. "I'm not looking for foot traffic," said Lewallen. "I want to see my order pullers running around." His staff can put together a whole house package, if necessary -- in fact they can do 12 on any given day, including the trusses. (These are manufactured and delivered by a third party.) Lumber is displayed three stacks deep, and it is available in 20-foot lengths. Kitchen and bath cabinets are sold in boxes, not vignettes. The light cloud is non-existent and the flooring selection is geared toward landlords. There are no house-wares or window treatments and cleaning supplies come in five-gallon buckets.

"We're not catering to the homeowners, and I think they pick up on that," said Lewallen, diplomatically. "They feel kind of lost in here." Some might be put off by the hours (5 a.m. to 6 p.m., closed Sundays) or the urinals on prominent display.

Brooks Ravenscroft, a general contractor who specializes in tenant and commercial improvements, said he drove 40 miles to visit the Home Depot pro store in Phoenix. "They have everything I need in stock, so I don't have to special order," he explained. On his list that day was a handicapped-accessible toilet, a commercial-sized hot water heater and job-lot quantities of a particular shut-off valve.

In addition to the specialized assortment, the pro store offers a number of services that include bid pricing, blueprint take-offs and same-day delivery. Special credit accounts allow separate billing for separate jobs, making it easier to track spending and profitability. But these offerings mean nothing if the orders are incomplete, the deliveries are late and the staff doesn't know what they're talking about.

"We've pissed off too many [contractors]," said one Home Depot employee. "They're not used to Home Depot being able to take care of their needs. That's something we have to overcome."

One thing Home Depot has figured out, at least in Phoenix, is the need to hire experienced people to staff its pro store. Lewallen is a former field superintendent for a home building firm, and the other assistant manager, Darryl Simons, worked in sales for Dunn Edwards. Dave Fundis, the outside sales manager, left Payless Cashways after 11 years to help launch the store in July. The three men keep using words like "hand picked" to describe their recruiting efforts: pro store employees came from local supply houses, the pro desks at other Home Depots and the building trades. At least a dozen employees worked for Payless Cashways, which liquidated a nearby lumberyard this fall.