Home Depot 2011 Annual Report Download - page 8

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Our Business
Operating Strategy
In fiscal 2011, we continued to execute on our strategy focused on the following key initiatives:
•Customer Service. Our customer service initiative is anchored on the principles of putting customers first, taking
care of our associates and simplifying the business. To enhance customer service, we introduced new information
technology and optimized certain elements of our supply chain to eliminate tasks and give associates more time with
customers. We also sought to maintain competitive wages and incentive opportunities to attract, retain and motivate
our associates.
•Product Authority. Our product authority initiative is facilitated by our merchandising transformation and portfolio
strategy, focused on delivering product innovation, assortment and value. In fiscal 2011, we introduced a wide range
of new products to our customers, while remaining focused on offering every day values in our stores.
•Productivity and Efficiency. Our productivity and efficiency initiative is advanced through building best-in-class
competitive advantages in information technology and supply chain, as well as building shareholder value through
higher returns on invested capital and total value returned to shareholders. By the start of fiscal 2011, we had
completed our Rapid Deployment Center ("RDC") rollout, and our focus turned to operating and optimizing our
supply chain network. We continued our focus on disciplined capital allocation, expense control and increasing
shareholder returns, both through share repurchases and increased dividend payments.
•Interconnected Retail. As customers increasingly expect to be able to buy how, when and where they want, we
believe that providing a seamless shopping experience across multiple channels will be a key enabler for future
success. The interconnected retail initiative is woven throughout our business and connects our other three key
initiatives. In fiscal 2011, we focused in particular on enhancements to our online presence and other customer-
facing technology, leveraging multiple channels to expand product assortment and simultaneously simplifying the
process of locating and ordering products.
Customer Service
Our Customers. The Home Depot stores serve three primary customer groups, and we have different customer service
approaches to meet their particular needs:
•Do-It-Yourself ("D-I-Y") Customers. These customers are typically home owners who purchase products and
complete their own projects and installations. Our associates assist these customers with specific product and
installation questions both in our stores and through online resources and other media designed to provide product
and project knowledge.
•Do-It-For-Me ("D-I-F-M") Customers. These customers are typically home owners who purchase materials
themselves and hire third parties to complete the project or installation. Our stores offer a variety of installation
services targeted at D-I-F-M customers who select and purchase products and installation of those products from us
in the store. Our installation programs include products such as carpeting, flooring, cabinets, countertops and water
heaters. In addition, we provide professional installation of a number of products sold through our in-home sales
programs, such as roofing, siding, windows, furnaces and central air systems.
•Professional Customers. These customers are primarily professional remodelers, general contractors, repairmen,
small business owners and tradesmen. We offer a variety of special programs to these customers, including delivery
and will-call services, dedicated staff and expanded credit programs. We recognize the unique service needs of the
professional customer and use our expertise to facilitate their buying experience.
In fiscal 2011, we introduced new information technology to serve our customers more effectively and enhance the overall
shopping environment. To improve our labor efficiency, we completed the roll out of our new associate forecast and
scheduling system and a centralized returns system in fiscal 2011. These systems allow us to take tasks out of the stores and
allocate more associate hours to assisting customers and to better align our labor hours with customer traffic patterns. As of
the end of fiscal 2011, approximately 53% of our store labor hours were dedicated to customer-facing activity, with a goal of
reaching 60% by the end of fiscal 2013. During fiscal 2011, we also implemented enhancements to our website to improve
our customers' experience when shopping online. These include Buy Online, Pick-up In Store ("BOPIS"), which allows our
customers to choose how they would like to receive merchandise ordered online, and "SuperSku," which provides greater
flexibility in how items are displayed online and minimizes the number of clicks necessary to find a product. In February
2012, we rolled out a significant upgrade of our website, which enhances the layout, visual appearance and responsiveness of
the site, as well as further reducing the number of clicks necessary to navigate our pages.