Home Depot: Leveraging its “late mover advantage” … huh?

Once heralded for its in-store customer service, Home Depot cost-reduced itself into 2nd place in the retailing category it created.

Now, it tries leverage it “late mover advantage”.  Say what ?

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Excerpted from WSJ: Home Depot Undergoes Renovation, Feb. 24, 2010

Home Depot is regaining momentum after belatedly tackling its biggest fix-it task to date: remodeling itself.

The world’s largest home improvement chain  is redesigning the way it ships merchandise to stores, answers customers’ questions, and showcases its wares on the Internet.

The goal is to improve productivity and expand profits by revamping a slew of business practices that never changed during the company’s mushrooming growth in the 1980s and 1990s, and that look primitive compared to current trends in retailing.

The most dramatic change is that Home Depot is phasing out the antiquated practice of having suppliers send dozens of half-empty trucks directly to its more than 2,200 stores.

A network of “rapid deployment” warehouse centers being completed this year will combine shipments, trim costs and cut truck trips to stores by up to 50%. That will let more of Home Depot’s orange-apron-wearing workers shift from shipping docks to store aisles, in hopes of tackling a festering reputation for bad service.

Home Depot is claiming a “late-mover” advantage will allow it to avoid the costly mistakes that other retailers made modernizing operations.

Home Depot executives concede that the company’s supply chain still won’t be state of the art after the upgrade, though it will be a big step forward.

To tackle the perception that Home Depot workers are always too busy to help customers, the company is spending $60 million on hand-held devices that will help workers check on the spot if something is in stock.

Communication was also a problem at Home Depot. Mr. Ellison said he was stunned to discover that store managers were drowning in hundreds of emails from headquarters.

So Mr. Ellison says he cut it to one email a week, on Monday, and set up a hotline for managers to complain if the edict is violated.

In addition to its supply chain fixes, Home Depot is waking up to the Internet after being embarrassed that Amazon.com — which sells more drills online than Home Depot. Now the company is building a site that not only sells what stores do, but features do-it-yourself videos to help customers with projects. “We’re now building a site that fixes people’s problems.”

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