Home Depot: Marketing Strategy Assignment

Home Depot: Marketing Strategy Assignment Words: 4966

The Home Depot store on 59th SST in Manhattan uses its storefront to attract its customers. In his book Why We Buy, Pace Undersell points out “the front of a store has utmost importance in determining who enters. ” When it comes to generating traffic, and attracting people to buy, the front of the store has the most pull. To attract people to its store, the Home Depot location took advantage of its bright orange colors against the surrounding bland cement buildings with bright orange balloons as flags.

The bright color pop on the East side, drawing peoples eyes and attention towards their store. This Hope Depot Location is appeal too more feminine, woman-based market. This is apparent as soon as you walk into the store. One main thing that stands out is the surplus of female workers that are scattered throughout the store. The more female workers in a store, the more comfortable and at ease a female shopper will be, causing her to potentially spend more money. As we rode the escalator down to the first floor or merchandise, we arrived in the section dedicated to bathrooms.

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It was then that it became apparent that this Home Depot was targeting a female-market. Undersell states, the “infusion of female energy changes even how the stores displays their good”. Entering the bathroom section of the store was like walking into to a museum that was displaying mini bathroom models. Each small area was complete with a toilet, tub, sing, and faucet, maybe even a towel rack. This is a much different set up than that of the tradition warehouse format where, toilets, showers, sinks, etc. Has their own different aisle.

This is because in order to capture and keep and female buyer’s attention “instead of displaying a box of bathroom faucets, stores now have to show the whole tub, complete with shower curtains and towel. This full display of merchandise could also be seen in on the lower level, in the lighting section, where fans and ceiling light fixtures are actually hung on the ceiling so that consumers can see how they look set up, and out of the bow. With a female market in mind “no longer can lighting fixture be hung on a rack or stood on a shelf.

Retailers have to show exactly how the lights will look in a room. The tone of this Home Depot is very upscale yet laid back and relaxing. Throughout the store, the merchandise is mostly brand named such as BEHR Paints, Martha Stewart Living outdoor furniture and Hampton Bay lighting fixtures, to name a ewe. Allowing a more enjoyable and relaxed shopping experience, the aisles are very spacious and wide. The spacious aisles makes it less likely that consumers will have to deal with what Undersell calls the “butt-brush” effect.

This effect will cause consumer to abandon his/her potential purchase. Usually “shoppers-women especially, though it [is] also true of men, to a lesser extent-don’t like to being brushed or touched from behind. They’ll even move away from merchandise they were interested in to avoid it”. Another factor that helped to make the atmosphere seem more relaxed was the use of greeters throughout the store rather than all at he front entrance. Undersell states “greet people too early, and you scare them away.

Talk to them too late and you get a whole lot of frustrated customers”. At the entrance, there are no greeters. But as soon as you step off the escalator and onto the main merchandising floor the, there is almost a surplus of greeters; but not all approaching at the same. Trying to navigate the vast array to merchandise, I was confident that if I ever needed to find anything, I would not have to search far to find a greeter to show me the right direction. Although the greeters seemed dependable, without them navigating the store would be a challenge.

There are signs that direct you to each section, but they are way above eye level, and the font is relatively small. Undersell speaks about how important the consideration of sight lines is: If you don’t see a display from a distance-say ten or twenty feet-then you won’t approach it except by accident. We were glad to see that there were signs that gave some type of navigation, but they were so far up above my sightline, I hadn’t noticed them until I was already feeling lost. We knew where the Flat Iron location of the Home Depot was before we even looked up the address.

My sister lives in that same area, so ranted this wasn’t a complete miracle, but still, something about the unique building had stuck out to me long before I even knew I would be investigating it. Surrounded by generic looking shops and apartment buildings, the Home Depot stood out as a pristine white building, bearing ornate columns and huge orange signs, stark against their white backgrounds. After a few seconds, we remembered our mission, and bustled into the store that was surprisingly full for a beautiful Wednesday afternoon.

After wandering around for a while, we were left with a mental list of possible reasons why so many people return to Home Depot. What does Home Depot do to encourage its patrons to shop there? After further thought, we came to the conclusion that there are primarily four main reasons. They are as simple, and as difficult as this. First, luring the customer in with a well-crafted and easily accessible layout, then making the customer feel completely at home and at ease in their stores, and finally, supplying excellent customer service.

On first entering a Home Depot, there isn’t actually much of anything. A few shopping baskets are placed near the front for convenience, there are shopping carts a little further way, but other than that there is a good couple feet of pure nothing before the first display is spotted. Waste of space, some might argue. That’s an area where a whole slew of products could be crammed in, Just waiting to be swept up by a prospective buyer. However, Home Depot knows better. They have not fallen subject to the trap that many other retailers fall into, and that Pace Undersell warns against.

He proves that the average buyer rarely looks at the displays they are bombarded with the second they walk into the store. In fact most of the time, these are completely lost on them. As Undersell succinctly puts it, “shoppers need a landing strip. ” Home Depot has got this down. Move a little way through the store, and the mastery of the layout is even more evident. The aisles are large and easily accessible. Perfect for moving shopping carts through with ease. One shopper stalling to look at something does not create an irritating traffic Jam. Bigger aisles mean happier customers.

The shelves in Home Depot further struck us. You would think for a home goods store, it would be almost inescapable to resist the sky high stacking of the various different products. However, none of the shelves were sky high and crammed. Most were on eye level and the products easily in view. This is a crucial part of any store layout. Products that are packed and hard to access, or stacked so high a customer has to crane his neck to see them are simply less likely to sell. 1 After all, shopping is all about convenience. Finally, we couldn’t help but notice the aesthetics of the Home Depot.

Although it was no “Crate and Baa the deterrent sections were attractive and easy to find. The lights twinkled from the lighting aisles, the tiles and paints were clearly displayed and vibrant, and the vast garden section on the lower level offered a leasing aroma as well as supplying a useful product. The layout managed to be clean and easily accessible, without looking like a large and unattractive factory. Due to Home Depot’s excellence in these features, their layout would be sure to encourage any patrons looking to buy their next refrigerator, light fixture, or any number of different appliances.

Home Depot also impressed me with their ability to make customers feel completely at ease and comfortable in their stores. As Undersell describes, any customer who feels rushed and anxious will be much less likely to tick around a store for to long. Obviously this translates to the longer a customer stays in a store, the more likely they are to buy something. It is easy to feel frustrated when shopping, especially for expensive objects that sometimes are complicated in nature. For example, most people would see going out to buy a refrigerator as sort of a hassle.

They are expensive, there is often a large selection, and sometimes, sales people are crabby and unhelpful. Home Depot does a great Job in make this type of process as painless as possible. First off, they have an excellent website. This may me unrelated, but in fact having a good website can be the first meaner of attracting potential customers to your store. Let’s go with the refrigerator example for a second. A young couple looking to buy a refrigerator might first go on the Home Depot website while lounging around on a Sunday morning.

They might see that Home Depot has a great selection, that they offer “how tot’s ” and explanations, and that they have long hours almost every day. After easily navigating through their website, and hesitantly picking out a few refrigerators they might like and be able to afford, the process suddenly Just got a lot easier. Now, if this couple goes to the store, Home Depot can prove itself yet again. Home Depot will continue to make their costumers feel comfortable with their excellent costumer service.

There is always a fine line, as Pace Undersell describes, between feeling like a sales person is being pushy, and feeling resentful that they aren’t being helpful enough. 1 Home Depot strikes a good balance. Within about three minutes of entering the store, a sales person asking if you need help will almost certainly approach you. The sales people are well versed in their approach, making it clear that any questions are welcome and that they are ere to help with whatever you might need. For the imaginary couple buying the refrigerator, their work has become even easier.

They tell the sales person about their research, and he or she can lead them right to the section, discuss various details with them, and let the customers fiddle around with the different types of refrigerators. Even this miniscule step can be important. Customers like to engage all their different sense is evaluating a product. 1 They don’t want to feel like they can’t investigate using their hands, eyes, smell, (hopefully not taste), etc. Finally, the customer feels as if this was a much lower level hassle process than if they had gone somewhere else. They are able to pay for their expensive product without feeling resentful to the company.

This part is key. They will have a favorable memory of going into Home Depot, and will be much more likely to return again. Through these examples, we see Just how adept Home Depot is at encouraging patrons to come back to their store again and again. Home Depot Promote and Implement Consumer Loyalty Strategies: Home Depot is known as being one of the premier retailer outlets for home improvement and construction products and services. Home Depot launched as a “do-it-yourself” style retailer and essentially spawned an entire industry centered around this simple concept.

The success of Home Depot has been driven by its ability to offer a wide range of products and very competitive prices. However, if Home Depot wants to remain the industry leader and fend off major competitors such as Low’s, it must retain its customer base. In this regard, Home Depot cannot rely solely on its ability to deliver competitive prices, but must also improve upon its ability to liver superior services that will ensure consumer loyalty. The services aspect of Home Depot’s business directly impacts consumer loyalty retention, by aiding in creating customer delight.

While delivering competitive prices appeases the initial reason the customer may decide to shop at Home Depot versus its competitors, delivering superior services will make the biggest difference in whether or not they will return. For Home Depot, there are two essential aspects of services that the company can provide for their customers. The first aspect is the “in-store experience,” most notably in the customer’s selection. That is to say, helping and guiding customers in the store as to what products they should purchase helps provide a better shopping experience for the customer.

The selection process is the first real chance for the customer to have a face-to-face interaction with the company and those who represent it. Creating an atmosphere in the store that makes shopping at Home Depot an easy, effective, and efficient process is paramount to increasing the customer’s satisfaction and creating customer delight. In-store specialists should be readily noticeable and available to the customers. The specialists should be well rained and qualified individuals who can help customers understand what products they need, how they work, and how to use them.

Additionally, these specialists should be able to assess the goals of whatever product the customer needs and be able to guide them and even inform them as to what products they will need in order to accomplish whatever task the customer faces. For example, if a customer tells the specialist they are building a deck in their backyard, the specialist should be able to inform the customer as to what tools and products would be necessary to accomplish such a task. The second aspect of services that Home Depot can supply is “in-home services. The assembly and installation process can be a frustrating experience for many customers who buy products at a “do-it-yourself” styled store. Home Depot currently has a strong in-home installation service program. Home Depot’s in-home installation program brings licensed and insured contractors to the customer’s doorstep. Additionally, the in-home installation service program guarantees at least a one-year warranty, giving the customer comfort that the product will be installed properly and also stands the test of time. Maintaining a top-tier installation program will help ensure customer loyalty.

Continuing to refine the process to make it run more efficiently, effectively, and smoothly will increase customer delight. Home Depot, like all other companies, should strive to understand their customer base as well as possible. There are two effective ways that Home Depot can go about mapping and analyzing their customer base. Home Depot should analyze boot t past purchasing history of its customers and their demographic make-up. The combination of understanding the demographics of their customer’s and their archiving history will allow them to target certain groups, and even individuals.

The analysis and information stemming from these two areas will greatly increase the effectiveness of targeted offerings, which will increase the customer’s perceived value and overall satisfaction. Targeted offerings allow Home Depot to strategically deliver effective offers that will lure customers back into Home Depot, greatly helping boost customer retention and loyalty. Home Depot can analyze customer past purchases to discover if a client may be renovating a house, or possibly starting a family.

Using this analysis, Home Depot can send offerings that will entice the customer the return to Home Depot for products related to their needs and goals. In order to gain access to Home Depot’s customer demographic and purchasing information, Home Depot should create a Customer Loyalty Rewards Program. They can entice customer’s to sign up for the membership by granting small rewards and sales. The application for the program will tell Home Depot where the customer lives, their age, their occupation, their sex, and other important demographic information.

Additionally, it will enable Home Depot to compare the past purchasing patterns of some of their cost loyal and valuable customers with a map of who their customers are, what they do, and where they live. This analysis will increase the efficacy of tailored offerings. Another type of offering that Home Depot can deliver to its customers in order to help better customer satisfaction and create customer delight is “situational offerings. ” Situational offerings will bring Home Depot customers “In the Moment” deals while they are in the store, based off of demographic and past-purchases analysis.

One way to enact this marketing strategy is to create a free Home Depot semaphore app and providing free Wife in all Home Depot stores. The application will allow Home Depot to see the specific location of a customer while they are in the store. For example, if the customer is shopping in a specific aisle, the app will be able to recognize that location and deliver instantaneous targeted offerings to the customer, which will entice them to purchase products while simultaneously increasing their satisfaction.

In order to increase customer retention and loyalty, it is important to keep in mind that it is generally believed that only 20% of a company’s customer account for over 80% of their business. In keeping with this belief, Home Depot must main a strong understanding of what their most valuable customers value most. Home Depot should strive to know what is in their most valuable customer’s baskets while they shop. For example, if the company is able to see that their most valuable costumers prefer a specific brand of lighting fixtures, then it is very important to make sure that that particular brand is always in stock.

This has nothing to do with the profitability of selling that brand. This is important because it ensures that the most valuable costumers do not have to go to other competing businesses in order to find what they want. While demographic and past-purchases analysis done through a loyalty-rewards program gives great insight in what customers buy at Home Depot, it is important to note that it does not shed light as to what things they are purchasing elsewhere. Home Depot should gain a strong understanding of their “share of wallet. Home Depot can gain a better understanding of their share of wallet by gaining access to external databases, which will detail what Home Depot customers are buying and where they are buying them. For example, in the Consumer-packaged-Goods industry, there are consumer panels that allow impasses to see where consumer in a specific region are shopping and what they are buying. Home Depot could use these databases and the information on them in order to better tailor ad programs and direct marketing. . How Does Home Depot Deliver Superior Customer Satisfaction? Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as “the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services ratings) exceeds specified satisfaction goals”.

Home Depot ensures the delivery of superior customer satisfaction through various meaner: conducting surveys, making return policy smooth and accessible, giving professional with repair advice, having complimentary services like moving and installation done by licensed professionals, having low price guarantee, providing convenient shipping and delivery, availability of tool rentals, sophisticated and easy-to-use website, providing managers on spot, and having a customer service hotlist.

Home improvement giants such as Home Depot Inc. Is ramping up their customer arrive in a big way, and it’s paying off in sales, profits and shopper satisfaction. Over the last year, the price of Home Depot shares has increased 74%. On Tuesday, Home Depot’s shares gained 3. 6% after reporting that its net income rose 1 . 7% for its fiscal second quarter compared with the same quarter last year. The company, citing the uncharacteristically warm spring, said consumers spent more money fixing up their homes.

The big home improvement companies have been busy directing store clerks to spend more time with customers, improving the information and advice they offer in inline catalogs, installing Wi-If computer service in stores and improving do-it- yourself instructions. They are coming up with ways to reach consumers with smaller budgets through multiple avenues, mostly online. Additionally, how-to workshops have largely moved to Youth channels, and photos on Faceable and Pinsetters, an online photo-sharing pin board, have replaced clippings from a magazine or catalog. Take a step back and see where the two major players were seven years ago when the housing market was booming,” said Peter Hailstorm, a senior analyst at Mornings Inc. There was a lot of new construction, and the stores were so busy that they didn’t have to cater to the regular customer and bend over backward for them. ” “Then we get into the economic downturn and people stop spending. Construction goes from bigger projects to smaller renovations, and customers shift from contractors to those wanting to do it themselves,” he said.

In terms of customer service, the giant home improvement chains are catching up with smaller competitors such as Ace Hardware Corp., which has ranked highest in customer service for the last six years in an annual survey by J. D. Power & Associates. In he most recent survey of home improvement retailers, Ace ranked first, followed respectively by Low’s, Midwest chain Innards, Home Depot, True Value Co. And Sears Holdings Corp.. Home Depot moved up trot number 6 to number 4 in the last year. While many retailers have struggled to right-size their staff with the down economy, Ace Hardware and Low’s clearly have kept the focus on their customers,” said Christina Cooley, senior manager at J. D. Power. “What’s been pretty clear with Home Depot is they’re trying to address their problems and making progress. ” 4. What does Home Depot Do To Generate Traffic and Encourage Re-buy? In order to receive the most profit as possible, customer relationship management is essential. When managing customer relationships, this includes attracting new customers and encouraging customers to continue to buy.

In generating traffic and encouraging new customers to come into a store, the front of the store is key. In the Home depot Flatiron store on 23 streets and 7 avenues the front of their stores stands out from the other businesses on the street. Because of their signature colors, which are orange and white the front of the store and the building attracts potential customers. The all white building, equipped with decorated columns is accented with orange flags. Also, in the front of the store, Undersell advises to have merchandising that changes in the day to attract the most customers.

Home Depot’s front display incorporated several ads. The ads promoted the CEO-friendly products offered in the store, along with the customer services and installment advertisements. These are ads that could generate traffic, but are changed more than once in a day. Undersell also suggests that business keep track of how often their loyal customers come in, so that the front of the store displays change that often. I’m not sure how often Home Depot changes their display, but while I was there the displayed remained the same. The main add Home Depot choose to display showed off the slogan, “spring into Doing”.

This slogan could generate more customers because of its simplicity and effectiveness. Undersell that having a sign that is under words would ensure that the customer reads it. Therefore the “Spring into Doing” sign is useful, but the other ads that explain the CEO-friendly products and services in over three words might not be read and would not be an effective way of bringing new customers into the store. Another way Home Depot encourages customers to come into their store is their very flexible hours. When I first arrived to the store is was one of the first things that caught my attention.

Displayed on the front store on a sticker in eye view Home Depot displays their hours. On Monday through Friday they are open from seven in the morning until ten at night and On Sundays they are open from eight to eight. The process of generating traffic does not stop with the front display it must continue in the store. One of the first ways to promote a customer to buy is to greet them at the door. When I visited Home Depot, I was never greeted or was asked if I needed help. The three hours I was in the store observing their three floors I was never approached.

According to Undersell, greeting a customer will “Start the seduction” and will encourage them to buy. It will also discourage them to shoplift. Another option of encouraging people to become customers is to offer them a basket. Similar to the previous observation, during my time at Home Depot I was offered neither a basket nor a cart. Take into consideration; I did not have any items, so I suppose they weren’t prompt to offer me one. According to Undersell, shoppers are more likely to actually buy something when they have a basket. Home Depot would generate more RA c t they and employers tottering baskets to customers in the store.

Along with drawing traffic to their store, a business must also encourage they customers that have to re-buy. The most obvious way to encourage customers to buy again is to have sales promotions, which are short-term incentives to encourage the purchase or sales of a product. According to Undersell, one of the best and most important ways of conveying to customers about sales and other messages is in the aisles and other laces inside the store. The reason for this is because in present day most customers make their shopping decision in the store by impulse.

Home Depot encourages customer to re-buy by placing posters through out the store and on the walls of the aisles. In the flatiron store, on the right side of store in the carpet section, each individual brand of carpet has its own display. On each displays accompanied with samples is a sign that reads, “Why Choose The Home Depot? ” Under that question lists points that highlights it’s long warranty, Installers muff can trust”, and asks customer to ask an associate for more details. Signs like this one are throughout the whole store, and in my opinion, do a good Job of reeling customers in.

Also, each individual aisle has a sign displaying its number. Under the number reads the slogan, “Nobody beats our prices. Guaranteed” and it similar displays the prompt to go ask an associate for details. In addition, on the upper level where the kitchen displays are, on the counter of each kitchen set are displays that consist of different pamphlets and signs promoting buying. On one of these signs it reads, “More Saving. More Doing”. Throughout the store, it seems as if home Depot’s main message is to remote it’s many choices and their installment option.

On every product section, from washing machines, to grills, I found a sign that promote their many options and a prompt to go the website to view their choices. Along with the “Endless Choices” signs, there were also “Get installed” choices in every product section installment that applies too. In the store there were at least two service desks in each product section that would encourage customers to buy. Also, Home Depot does a good Job of incorporating things that according to Undersell, shoppers “Love”. By incorporating hinges shoppers love, they would ultimately are more prone to re-buy.

One of these things that Home Depot incorporates is “touch”. Home Depot incorporates opened display of all their products in every product section. For example, in the carpet section, there are million of squares of carpet that the customer could touch and in the bathroom/kitchen section there are displayed opened faucets, toilets, and more. The Second “Customer loves” Home Depot incorporates is “Asking Dumb Questions”. Undersell explains that products should not be behind glass and out where customers can get to them. Also, the products should have information, signs, and articles to give the customer information before they ask a question.

Home Depot does this perfectly, under all the product displays, which are have price tags, there are displays that explains what the product is, and how they can use it, and what there selections are. All in all, Home Depot is a very successful store and obvious promotes lots of revenue, but there is also room for improvement in every business. First, our group believes that Home Depot could do more to encourage re-buys. According to Kettle, two ways to encourage re-buys are sales promotion and nonuser promotion. While we were in Home Depot, we did not see them take advantage of those two ideas.

Sales Promotions consist of short-term incentives to encourage customer to buy now. For example, the display conveys to the customer the sales is going on for a limited time. Consumer promotions consist of samples, coupons, cash refunds, price packs, and sweepstakes to name a few.

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