Home Depot 2012 Annual Report Download - page 8

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Our Business
Operating Strategy
In fiscal 2012, 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 creating an emotional connection
with our customers, putting customers first, taking care of our associates and simplifying the business. We
underscored the importance of this initiative in fiscal 2012 by retraining all U.S. store associates on our Customers
FIRST program prior to the Spring selling season. During fiscal 2012, we continued to invest in information
technology and made certain strategic acquisitions to serve our customers more effectively. Through these efforts,
we have continually improved our customer satisfaction survey results. 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, which is focused on delivering product innovation, assortment and value. In fiscal 2012, we introduced a
wide range of innovative new products to our professional and do-it-yourself customers, while remaining focused on
offering every day values in our stores.
• Disciplined Capital Allocation, Productivity and Efficiency. We have advanced this initiative through building best-
in-class competitive advantages in information technology and supply chain. During fiscal 2012, we completed the
mechanization of our Rapid Deployment Center ("RDC") network, and we continue to focus on operating and
optimizing our supply chain network. We also advanced this initiative through our continued focus on disciplined
capital allocation and expense control, which drove higher returns on invested capital and allowed us to return value
to shareholders through share repurchases and dividends.
• 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, with an expanded array of
merchandise, 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 2012, we launched several projects to support this
initiative, starting in the first quarter with the rollout of a significant upgrade to our website, which enhanced the
layout, visual appearance and responsiveness of the site. We also began construction of a new distribution center to
support direct-to-customer fulfillment, with a second distribution center also under development, and we added new
customer call centers in Utah and Georgia. Lastly, we introduced new programs, such as Buy Online, Return In
Store ("BORIS") and Buy Online, Ship to Store ("BOSS"), to expand upon Buy Online, Pick-Up In Store
("BOPIS"), which we introduced in fiscal 2011.
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. We also offer a variety of clinics and workshops both to impart this knowledge and to build
an emotional connection with our D-I-Y customers.
• 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, expanded credit programs, designated parking spaces close to store entrances
and bulk pricing programs for both online and in-store purchases. We recognize the unique service needs of the
professional customer and use our expertise to facilitate their buying experience.
In fiscal 2012, we undertook a number of projects and new developments to enhance our customers' shopping experiences. In
addition to retraining our associates on the Customers FIRST program, we rolled out the "First Phone Junior" to all of our