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OCT 2008

Home Depot Learns to Go Local†

Uniform Approach Didn't Cut It; Unsold Mowers in Arizona, Too Few Power Tools Out West

Wall Street Journal, October 7, 2008 — Shortly after taking command of Home Depot Inc. in early 2007, Frank Blake found a pyramid of riding lawn mowers outside a store in Arizona, where lush lawns are uncommon. It turned out the store had sold only one such mower in two years. Then, he learned that the retailer was chronically short of Makita power tools on the West Coast, where they sell particularly well.

Mr. Blake ordered changes in Home Depot's purchasing system, which had favored national uniformity at the expense of local customer preferences... The shift in Home Depot's buying patterns highlights a tricky problem for national retailers: balancing local demand with national efficiency. In Home Depot's case, the new, more targeted buying has helped lower merchandise costs by reducing unsold goods.

Category: Marketing Strategy
Tags: Home Depot, JC Penney, Lowe's, Safeway, Wal-Mart, centralization, customer demographics, customer preferences, decentralization, Marketing Operations, Marketing Organization, national brands, regional brands, targeted buying

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