Home Depot Announces $1.2B Supply Chain Overhaul

This week, Home Depot announced plans to spend $1.2 billion over the next five years to speed up and improve its supply chain process. The Wall Street Journal reports the home improvement retailer is spending the majority of the budget on solutions to improve delivery of goods to homes and job sites as the rise of online shopping resets consumer expectations. Home Depot will add 170 distribution facilities across the U.S. so that it can reach 90 percent of the U.S. population in one day or less, said Mark Holifield, the company’s executive vice president of supply chain and product development.

Total Retail’s Take: Phase one of Home Depot’s $11 billion overhaul plan has started. Home Depot's decision to start with its supply chain is smart, especially to keep up with on-demand consumer expectations. The home improvement retailer is aiming to have 40 flatbed distribution centers in its 40 largest markets, making next-day shipping a norm and not an exception. That feature alone could strengthen Home Depot’s fight against Amazon.com and other online retailers in the home improvement space. Today's consumers are increasingly basing purchasing decisions on convenience over price, and Home Depot's decision to invest in its supply chain speaks to that reality.