November 20, 2013, 12:05 PM

Web sales thrive at Home Depot in Q3

E-commerce grew 50% backed by a slew of new initiatives.

Mark Brohan

Research Director

Lead Photo

E-commerce sales at The Home Depot Inc. grew at a brisk pace mainly because of a growing number of orders that are placed online and picked up in stores, CEO Frank Blake says.

Speaking to Wall Street analysts on the company’s third quarter earnings call, Blake noted that web sales grew 50% in the third quarter and accounted for about 3% of total sales. Home Depot, No. 46 in the 2013 Internet Retailer Top 500, doesn’t break out quarterly e-commerce metrics. But based on the data points Blake did disclose, Internet Retailer estimates that Home Depot generated web sales in the third quarter of $584.1 million, up 50% from an estimated $389.3 million in the prior year.

“Sales from our online channels, including those picked up in our stores, were up over 50% and are now approximately 3% of our total sales,” Blake told analysts. “We know that our customers are expecting a simple and easy experience shopping online and in our stores and in the intersection between the two.”

Web sales are growing because Home Depot continues to add enhancements to its e-commerce channel, Blake told analysts. In the third quarter, Home Depot rolled out a new program it calls First Phone. Previously if a Home Depot sales associate went to process a customer’s online order for in-store pickup, the process required going to a particular terminal. Now with First Phone online orders for in-store pickup are flagged in Home Depot’s integrated store and online order management systems, and sales associates are now trained and equipped with more wireless devices such as computer tablets to help customers get their order identified and picked up more quickly. “Previously an associate would have to go to a terminal for this activity, adding time to the customer’s business and complexity to our process,” Blake told analysts. “Now with the First Phone, our associates can close the transaction immediately from wherever they are in the store.”

Other e-commerce improvements Home Depot made in the third quarter included expanding the number of appliances stocked online and rolling out a new mobile app for contractors that helps them identify, place orders and pick up supplies more quickly. “The app enables pros to see multiple store inventory at one time, provides them direct access to our pro desks,” Blake told analysts.

For the quarter ended Nov. 3, Home Depot also reported:

  • Net sales increased 7.4% to $19.47 billion from $18.13 billion in the prior year.
  • Net earnings increased 42.6% to $1.35 billion from $947 million in the third quarter of 2012.
  • Comparable-store sales increased 7.4%.

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