Home Depot Caters to Click-and-Mortar™ Shoppers to Boost Spending

As retailers look to drive omnichannel engagement to boost customers’ spending, Home Depot is linking the online shopping experience to its physical stores, catering to high-value Click-and-Mortar™ shoppers.

The home improvement retail giant, which has more than 2,300 locations across North America, shared on a call with analysts Tuesday (Feb. 20) discussing its fourth-quarter and full-year fiscal 2023 earnings results that it is fulfilling a share of eCommerce orders through its brick-and-mortar locations.

“Turning to total company online sales, sales leveraging our digital platforms increased approximately 2% compared to the fourth quarter of last year,” Billy Bastek, the retailer’s executive vice president of merchandising, said on the call. “… For those customers that transacted with us online during the fourth quarter, nearly half of our online orders were fulfilled through our stores.”

PYMNTS Intelligence’s new study “2024 Global Digital Shopping Index: The Rise of the Click-and-Mortar™ Shopper and What It Means for Merchants,” commissioned by Visa Acceptance Solutions, found that 39% of consumers are now Click-and-Mortar shoppers, engaging across digital and physical channels. These shoppers think of the physical store as an extension of their digital experience.

Retailers ranging from grocers to sporting goods stores noted that omnichannel customers are the highest-value shoppers, spending more than those who make purchases exclusively via either brick-and-mortar or digital platforms.

Plus, digital purchases tend to be of greater value overall than those made in stores.

Findings from PYMNTS Intelligence’s study “Tracking the Digital Payments Takeover: Catching the Coming eCommerce Wave,” which drew from a survey of nearly 2,700 U.S. consumers, revealed that the average money spent per online purchase is $127, while in-store purchases amount to $87, such that the former is 46% more.

In a further bid to boost omnichannel engagement, Home Depot is also merging the digital and in-store experience to drive more efficient returns.

“In 2024, we will focus on building more robust capabilities to support an interconnected self-service returns process, where customers will have the ability to start a return online and complete that return via mail or in-store,” Ann-Marie Campbell, senior executive vice president, told analysts during the call. “We have just begun all of this work in earnest and are very excited about the friction we will remove through this process while realizing significant productivity benefits over the long term.”

The returns process is a top-of-mind concern for merchants, with the National Retail Federation estimating that shoppers returned 16.5% of items purchased online and in stores last year.

Additionally, the chain is also looking to digital to drive its B2B sales, building out its complex Pro business, working with professional customers on more involved tasks, and improving its online platforms to drive usage.

“In 2024, we will continue learning and building out new capabilities for the complex Pro,” Ted Decker, the company’s CEO and president, stated on the call. “… For the complex Pro opportunity, this means that by the end of 2024, we will have 17 of our top Pro markets equipped with new fulfillment options, localized product assortment, and expanded sales force and enhanced digital capabilities.”

Home Depot’s strategic focus on omnichannel engagement comes as merging online shopping experiences with physical stores becomes increasingly essential for retailers looking to drive spending per customer. Furthermore, by streamlining the returns process and enhancing digital platforms to support B2B sales, the retailer is looking to digital to boost efficiency and drive engagement across different parts of its business.

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.