Home Depot Canada’s ‘customer-centric’ tech transformation

Sauntering through a store that carries in the neighbourhood of 30 million items can be exciting, but not a little daunting as well.

Then factor in an inventory that includes 40,000 – 50,000 different kinds of building materials, home improvement supplies and lawn and garden products, and you have some idea of what the average shopper at a Home Depot Canada store is up against.

The big box retailer says it’s on a mission to make the “buying” experience easier, more empowering, and much more fun for customers – with a little help (make that a lot of help) from information technology (IT).

To accomplish that, Home Depot stores across the country are relying on a smorgasbord of IT tools – from sophisticated forecasting and scheduling systems to mobile order carts, from radios and call boxes to a “Special Services” system on steroids, from integrated merchandizing to centralized inventory management.

But as the ultimate goal is improved customer experience, a key focus area is improving the effectiveness of those who deal directly with the customer, says Harry Taylor, senior vice-president, operations at Home Depot Canada Inc.

Taylor was one of the keynote speakers at CIO Assembly, an event for senior Canadian IT executives held earlier this week at Niagara-on-the-Lake, Ont.

CIO Assembly was produced by CIO Canada in co-operation with the CIO Executive Council that seeks to give CIOs a united voice on technology matters, and enables them to act as resources to one another.

Cyber coaching

At Home Depot Canada, every associate’s tryst with technology happens right after they are hired, when they are put through a comprehensive Web-based training.

The company’s 20,000 associates, says Taylor, are “the lynchpins of customer service. We want them to engage with customers and be very knowledgeable.”

But the reality is most associates don’t come in with technical knowledge and skills.

“So we have to train them.”

And given that the retailer’s turnover rate is around 30 per cent (which is still better than the industry average) that’s lot of hiring…and training.

According to Taylor, one big advantage of Web-based training is that it can be suitably paced.

For instance, he says, 16 hours of training are required for someone to be certified as a garden consultant at Home Depot.

“You don’t want to do 16 hours in two days – sitting in front of a terminal, or you’re just going to zone out. But when you do it (say) over eight, two-hour increments, you get fabulous results.”

Consistency of content delivery across stores, and a reduction in the number of associate trainers required are other advantages of this e-training program, the Home Depot exec says.

“We can take those saved hours and invest them back on the floor – to serve customers better, and we’re still neutral in terms of payroll.” Taylor acknowledges, however, that a pure e-training program is not viable.

“Some of the stuff we sell is very complex and people can’t be trained on it using Web-based tools. We also need personal interaction.”

Make me a match

For a retailer as large as Home Depot – with thousands of full- and part-time associates – matching labour resources with departments and timings can be a huge logistical challenge.

According to Taylor, this task is not left up to individual managers because that would erode consistency, across Home Depot’s more than 2,000 stores, and bring a huge element of subjectivity into labour allotment.

“Scheduling would be too dependent on individual managers’ preferences– whether [they] wanted to maximize sales, or customer service or profits.”

Instead scheduling is closely linked to sales and transactions forecasts. And these forecasts are very granular, says Taylor.

“We have a bunch of tools that can forecast sales dollars and transactions by department, by day, and by hour. Based on these metrics, we can specify that we will need ‘x’ number of hours to provide expected levels of service.”

Wireless Technologies

According to Taylor, “mobile order carts” and “wireless radios” are a couple of wireless technologies that have boosted productivity and customer service, across several Home Depot stores.

Located at strategic spots around the store, the mobile order carts are used by inventory management associates to access stock information on various items, and determine what needs to be ordered and in what quantity.

Associates get a bunch of information on the screen when they do a scan, said Taylor. “That’s a great deal more efficient than referring to a paper [record] or running back and forth between store aisles and the computer room.”

Besides improving stock accuracy, he said, mobile order carts have reduced the number inventory management hours. Saved time, he said, has been channeled into customer-facing activities.

Likewise, technology is also playing a role in improving speed-to-service, Taylor says.

The products to accomplish this – wireless radios and call boxes – have not been deployed in many Canadian stores, but they’ve significantly improved customer service wherever they have been rolled out, Taylor said.

He described how.

“A customer who needs assistance presses a button on a call box. Every manager has a wireless radio on their belt, knows exactly where that call came from and has a minute or less to respond.”

These tools, said Taylor, have been particularly useful in lower-volume stores, with fewer associates who cover more territory.

From a customer perspective, waiting for service can be quite stressful, the Home Depot executive says, adding that the call boxes are a great stress reliever – “assuming that we do get someone there in a minute.”

Looking forward

A big IT project in the pipeline involves the creation of an Integrated Merchandizing Master Data Information System based on ERP modules from Walldorf, Germany-based SAP AG.

According to Taylor, this is a “dramatic step forward” for Home Depot.

The new ERP system will replace a mess of disparate home-grown apps that Taylor describes as an embarrassment to Home Depot.

“They are unwieldy and creaky,” he said. “They’re all patchwork, and the maintenance is so punitive that the pain of the status quo is worse than the pain of change.”

Once operational, he said, the SAP retail system will be used to drive better product assortment, better staffing decisions and much more.

The new system, he said, is being viewed as an enabler – “not just to enhance efficiency and systems productivity, but also the customer experience.”

And improved consistency will be yet another benefit, according to Taylor.

The average Home Depot store, he notes, has 35,000 stock keeping units (SKUs). “But we have more than 100,000 in our master database, and maintaining those is a nightmare. Because there isn’t one system, when you bump one system up against another it creates all sorts of problems.”

The integrated SAP system will help resolve these issues, he said. “It’s a huge benefit from our point of view.”

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