ATLANTA, GA (Dec. 6, 1999) -- Last week, I started a series about home remodeling stores, such as Home Depot (NYSE: HD) and Lowe's (NYSE: LOW). "Home remodeling" is not a good term, but these stores are not the traditional "home centers" that many of us have dreaded. This week, I'll start with Home Depot and its concept.

Home Depot began in Atlanta in 1979. The founders of the company, Bernie Marcus and Arthur Blank, had an extensive background in retailing. When I look at a Home Depot, I see a store that combines the best of the building supply store I worked in with the convenience of a home center. These two guys had a different idea when they set up their company, which I never considered.

The idea was, and is, to sell huge quantities of merchandise, which would allow low gross margins. This would allow them to mark down prices aggressively, and home owners could purchase materials for prices only contractors could hope for in traditional stores. They used a few interesting concepts to move the merchandise in the quantities needed. One idea was to sell everything you needed for working on the home. You could buy two-by-fours, paint, tools, toilets, and lights all in the same store.

Let me divert here and tell you how great this concept was for me. About the time I was promoted to Base Engineer at the Pittsburgh Air National Guard Base, I was in a bit of a dilemma -- I didn't have any storage space. We were constantly out of the simple stuff we needed to do repairs, and the U.S. government supply system was awful to work with. It could take all day to push through the paperwork necessary to buy a two-by-four. Well, I was lucky. Acquisition reform had occurred, and we could make small purchases on a credit card. Even luckier, Home Depot opened a store near us.

Home Depot became our "storage yard." We kept very little on hand. If a toilet needed repairing, we ran to Home Depot and bought the items we needed, and maybe picked up some pipe or plywood. I wonder how many other small institutions (schools, hospitals, etc.) have made use of Home Depot in the same way.

In the building supply store I worked in, our lumber was out back in a warehouse, as was our wallboard, insulation, and other large items. This was fine for a contractor who knew what he wanted, but many people don't know what they really need (me included) until they look at it. So, the Home Depot guys decided to put everything out on the floor. Guess what this does? It leads you to make additional purchases. My attic is a perfect example. I was buying something else and saw precut OSB flooring for sale. I came home and built myself more storage space above my garage. That added a fluorescent light to my list, an attic fan to keep the area cooler, and so forth, all of which could be grabbed at Home Depot.

So, Home Depot is selling all sorts of stuff, and all of it is put on display inside the store. This calls for an amazing amount of floor space, which was also a part of the concept. You go in Home Depot and it feels like you could spend hours exploring the place, and many customers do. The final touch, and the master stroke of genius in my opinion, is the staff.

I've found it very frustrating to go to a home center and not be able to get even rudimentary help on how to solve a problem. Home Depot has a better idea; they have a well-trained staff that takes their jobs seriously. My wife bought the blinds for our house with the help of a woman in Home Depot. This woman really knew her job -- I never knew there was so much to know about window coverings.

I can go on for a long time with the excellent ideas that Home Depot has for marketing, such as the "how to" displays, the classes they give, the prominent display of impulse items, the rental of trucks to carry things to your house -- all combined, it's a very impressive concept, which makes me wonder why nobody else thought of it. Well, others did. The company I used to work for came up with a similar store, but it is a local, privately held company in Washington, D.C. -- you can't invest in it. However, you can invest in Lowe's, since it is not only public, but the company has a direct investment plan, as does Home Depot.

I think it's pretty obvious by now how much I love this type of store, and the performances of these two businesses (Home Depot and Lowe's) in particular shows I'm far from alone. For my next column in this series, I'm going to take a look at Lowe's (which will require several hours of on-site research -- no sacrifice is too great for my readers and the Fool). I'll wrap this series up with a look at the financials of the two companies. However, Scientific-Atlanta (NYSE: SFA) and I finally got a time and date to meet this week to discuss their finances. So, I'm going to cover them next Monday, and then after that we'll continue our fun in Home Depot and Lowe's. To discuss these companies, please visit the Drip Companies message board linked below.