It’s that time of year when the weather turns cold and we’re spending more time indoors. And we’re beginning to notice all the little things that need to be repaired or rejuvenated or completely remodeled. Some projects require a can of paint and some time. Others may require large materials like sheetrock that won’t fit in most of our cars. Well, there is now a solution Home Depot is expanding to help our DIY projects get done.
Home Depot launches a new pro customer delivery system in Dallas
The retailer created a flatbed distribution center where big semi trucks and rail cars roll through the building.
Home Depot is revamping distribution to better serve its professional customers, and it’s starting out with a new facility in Dallas, one of its largest markets.
The home improvement retailer has opened a new 800,000-square-foot flatbed truck distribution center in Dallas and plans to open similar ones in other cities as part of a $1.2 billion, five-year investment in its supply chain.
Home Depot executives like to say if they get it right for professional customers, it’s good for the DIY customers, too. Here’s why: While only 4% of the company’s customers are people who make a living remodeling and maintaining the residential market, they represent 45% of Home Depot’s annual sales.
“Customer expectations are definitely rising, and pros want speed and reliable service,” said Stephanie Smith, Home Depot’s senior vice president of supply chain.
Flatbed trucks roll through the middle of the massive building as heavy products such as lumber, ladders, pipes and roofing materials are added from either side.
Flatbeds can hold multiple deliveries, and the facility can handle up to 65 to 75 trucks going out per day. That’s thousands of deliveries per week to customers within a 75-mile radius of Dallas, Smith said.
That compares with smaller trucks loading a couple of orders from each store and then returning and doing it again and again, she said.
Stores try to make next-day deliveries, she said, “but now we can guarantee it.”
Home Depot has discovered that as the largest purchaser of lumber in the U.S., it can leverage its position to manage the rail and truck inbound deliveries to distribution centers.
The flatbed fulfillment center at 9222 W. Jefferson Blvd. in Dallas is on a rail line that’s been extended into the building and can hold 10 railcars. An outside yard can handle 20 more railcars.
The system allows Home Depot to take control of that entire supply chain, from the lumber mill all the way to the customer, Smith said.
Bill Lennie, executive vice president of outside sales and service for Home Depot, said the pro customer in the old days operated with a tape measure on his belt, but today’s pro is shopping online and looking for reliable deliveries.
“The younger pro in the market is coming in with their touch screen devices. And with a shortage of people in the trades such as plumbing, everyone is trying to make their crews more efficient,” Lennie said.
Online shopping is another big focus. Almost 10% of Home Depot’s U.S. retail sales are online, and more than half of those sales are picked up in its 2,300 stores. The retailer’s annual sales exceed $100 billion and it’s the fifth largest U.S. retailer online. It’s also the largest retailer in the home improvement business with a 15% share in the annual $650 billion U.S. market. Lowe’s is the second with sales of more than $70 billion. But the business is fragmented, and both retailers also compete with manufacturers that serve customers directly.
Last month, Home Depot lowered its sales targets for the year, saying some of its investments are taking time to pay off. It has missed sales targets in recent quarters but said the housing market remains healthy.
It’s also building a 1.6 million-square-foot fulfillment center for online shopping next to the Dallas flatbed facility. When completed, Home Depot will have 4.5 million square feet of distribution space in Dallas, Smith said.
Home Depot’s distrbution campus is on the site of the old Vought Aircraft Division, which was built in 1940 for World War II aircraft manufacturing. That West Dallas operation was closed in 2013.
There are two aircraft hangers on the property with a historic designation, Smith said. “We’re using them on rainy days to put tarps on loaded flatbeds on their way out for deliveries.”
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