Home Depot plans to spend $1.2 billion over the next five years to improve its delivery and supply chain capabilities, according to The Wall Street Journal. The retailer will open 170 distribution facilities across the U.S., allowing it to reach 90% of the population in one day or less. The new facilities will include dozens of direct fulfillment centers for commonly ordered products, along with 100 hubs where bulky items can be consolidated for shipment to customers.
Home Depot’s e-Commerce revenue grew 21% in 2017 from 2016, accounting for 6.7% of all sales in 2017.
The retailer wants to cut transportation costs as well, for example using cars and vans to deliver smaller orders in some markets. For professional customers, the retailer is building 40 additional flatbed distribution centers to handle larger building material shipments.
Shoppers “expect delivery to be free, they expect it to be timely,” said Mark Holifield, EVP of Supply Chain and Product Development, who discussed the plans at 3PL & Supply Chain Summit, which was held June 5 to 7. The supply chain investment is part of a larger $11 billion plan to “re-engineer” the entire company and prepare it for the future of retail.
The growing emphasis on e-Commerce will by assisted by the hiring of an additional 1,000 technology professionals in 2018. Other aspects of the $11 billion plan include melding the company’s digital and physical shopping experiences and improving in-store checkout speed.