Joining the conga line of retailers offering consumers home delivery is do-it-yourself home-improvement warehouse Home Depot (NYSE:HD), which last month secured service mark protection for "Home Depot Delivers." Although the big-box retailer has offered a delivery service for pros, and consumers can take advantage of the Home Depot truck rental for small loads, the expansion into home delivery for the average consumer represents a new push to maintain an edge over rival Lowe's (NYSE:LOW).
The Atlanta Business Chronicle reported that Home Depot filed an application to trademark the service on Oct. 14. In an emailed statement to the news outlet, the company said it wasn't for any one particular program offered, but rather would be the umbrella designation for all of its delivery services.
Delivery has quickly become the service that defines retail. What began with simple options like ship-to-store, pioneered by mass marketers such as Wal-Mart (NYSE:WMT) , is now becoming more widespread across the retail spectrum.
Wal-Mart, Amazon.com (NASDAQ:AMZN), and the post office are delivering groceries to your doorstep. Burger King Worldwide (UNKNOWN:BKW.DL) is experimenting with home delivery of fast food. Meanwhile, Google (NASDAQ:GOOG) and eBay (NASDAQ:EBAY) are pledging same-day delivery for purchases. The service is blurring the lines of distinction between e-commerce and the physical world.
Omnichannel marketing is becoming the rule retailers must live by. Consumers, whether offline or online, are reaching for similar tools to make a purchase no matter where they are: in a store, on a mobile device, or flipping through a catalog. Those companies that best provide a seamless approach to the consumer experience have a better chance to succeed.
A change in direction?
CEO Frank Blake charted a steady course of meeting or exceeding analyst earnings expectations for six straight years. Following years seemingly adrift at sea under ex-CEO Bob Nardelli, it was a welcome change for investors. But on Nov. 1 Home Depot passed the chief executive torch again, this time to Craig Menear, who previously served as the big-box store's U.S. retail president.
He enters the position at a challenging time for Home Depot. The retailer is still confronted with a data breach from this past September that put 56 million credit card accounts at risk and also compromised 53 million email addresses (I was just notified the other day I was one of them). While the stolen data didn't contain passwords, payment card information, or other sensitive personal information, and the retailer has since eradicated the malware from its system, Menear has his work cut out for him.
Although Home Depot hasn't experienced the same customer backlash as Target (NYSE: TGT) did following its own data breach, perhaps making patching up relations with customers easier, it also doesn't face the same economic conditions Menear's predecessor had when the retailer grew its business on the back of a recovering housing market.
The rise in housing prices has slowed in 2014, the Federal Reserve ended its quantitative easing bond buying program (meaning interest rates will rise), and real incomes continue to fall. The conditions that have been good for Home Depot over the past few years might not continue going forward, and Menear may need to steer a new course once more.
Delivering the goods
With a solid foundation of growth behind it and a stock that's surged more than 250% over the past five years, more than doubling the performance of the stock indexes over that time frame, Home Depot has to meet the future head on.
Home delivery might be just one avenue to keep customers coming back, though it's not a sure-fire success. Target, for example, reluctantly entered the delivery business and found that as its website became the company's "front door" for consumers, it needed to make the online shopping experience more relevant to its customers. But it also just announced its biggest round of store closings in years as competition and a faulty entry into the Canadian market hurt performance.
While challenging business conditions and new leadership may scare some investors, Home Depot's filing indicates it's planning to innovate and stay ahead of the competition.