home depot Craig Menear Presentation


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home depot Craig Menear Presentation

  1. 1. 2008 Investor & Analyst Conference Merchandising Craig Menear EVP - Merchandising
  2. 2. Merchandising Roots of Leadership in Home Improvement Built on National Brands Exclusive and Proprietary Brands Focus on Our Core Customers Knowledge Transfer to the Customer Aggressively Attacked the Market Strong Every Day Value Proposition 2
  3. 3. Brand Strategy Proprietary Differentiate Brands Exclusive Preference Brands National Selection Brands Home The Depot Foundation Built on National Brands 3
  4. 4. Merchandising Strategy Going Forward Add Key National Brands Exclusive and Proprietary Brands Focus on Our Core Customers Drive Knowledge Transfer to the Customer Aggressively Attack the Market The Best of Our Past with a Focused Approach 4
  5. 5. Brand Strategy: National Brands Market share leader in Most recognizable brand overall power tool share in garden Largest share of gypsum Pro choice for power tools #1 preferred brand by wallboard market in US DIY customers Most used wallboard Proprietary brand by Pros Brands Exclusive Brands National Brands #1 brand in #1 dollar market share cooking products 42% unaided faucet #1 appliance Home brand awareness brand in mkt share Depot among builders Built on National Brands 5
  6. 6. Brand Strategy: National Brands Proprietary Brands Exclusive Brands National Brands Home Depot Built on National Brands 6
  7. 7. Brand Strategy: Exclusive Brands #1 Window brand preferred #1 Consumer brand Highest consumer by Pros & Consumers of paint brand recognition 12% market share 27% market share Over a century of craftsmanship Proprietary Brands Exclusive Gaining consumer Brands Largest producer power tool share of tile & stone National Affordable price installation materials Brands approach in N.A. 40% market share Home Depot Innovation at a Value 7
  8. 8. Brand Strategy: Exclusive Brands Proprietary Brands Exclusive Brands National Brands Home Depot Innovation at a Value 8
  9. 9. Brand Strategy: Proprietary Brands #1 selling brand of ceiling fans in the world >$2 billion in brand sales Innovation: Over 200 new products since 2005 Fastest growing lawn & garden brand at HD Proprietary Brands Exclusive Brands Meets or exceeds National Brand quality National Brands >$1billion in annual sales Home Depot Innovation at a Value 9
  10. 10. Brand Strategy: Proprietary Brands Proprietary Brands Exclusive Brands National Brands Home Depot Innovation at a Value 10
  11. 11. Establishing the Focused Approach Merchandising Transformation Redefining How We Run Our Business Re-Establishing Product Authority Through Focused Bay Approach Building Tools to Enable Execution Success = Profitable Sales + Share Gain 11
  12. 12. Merchandising Transformation: People Key Investments in People New Outside Talent − Gordy Erickson – SVP Décor − Dave Voss – Lumber MVP − Frank Bifulco – CMO Field Talent − Divisional Sales Managers (DSMs) − Bruce Merino – SVP Merchandising Services − Dan Paris – MVP − Pete Capel – MVP − Jane Roten – VP Store Environment Merchandising Execution Team (MET) Building on an Experienced Team 12
  13. 13. Merchandising Transformation: Process Focused merchants on what customers want and created better alignment with operations, supply chain teams. Focused Bay Approach Seasonal Planning Merchandising Presentation Driving Sales Productivity in the Box 13
  14. 14. Process: Focused Bay Approach Assortment / In-Store Customer Advertising / In-Store Space/ Visual Inventory Sales Service Marketing Merchandising Deployment Frequent & Dominant, Prominent, Premium Destination Dominant Exclusive Visible Service, Solution Selling Complementary Consistent Co-Locate with Consistent Core & Competitive Mkt., Breadth Destination Svc., Solution Selling Focused, Minimal Service, Prominent Drive Desired Traffic Target Highest Facilitate Sale Marketing Traffic Pattern Freq. Convenience, Opportunistic, Minimal Service, Limited / No Impulse High Traffic Minimal Breadth Replen. & Display Marketing Awareness Building, Education, Store Preference & Conversion Emerging Roles Help Determine Appropriate Merchandising Tactics 14
  15. 15. Process: Focused Bay Approach Identified assortment gap ~ 800 Bays Reallocated space ~ 85,000 Square Feet Reset in ~ 90 days Drive more value out of 60% more productive than every bay in the store under previous program 15
  16. 16. 2008 Seasonal Productivity Improvement Assort Closer to the Customer Fix Information Flow Improve In-Stock Faster Response to Demand Enhance Inventory Productivity 16
  17. 17. Merchandising Presentation Field merchants partner with merchants in Atlanta to offer more localized products Natural Stone Metro Set 17
  18. 18. Merchandising Transformation: Systems Providing our merchants with the tools they need to more effectively do their jobs. Better Merchandising Tools: Assortment Planning Forecasting MAP Event Tool New MST Platform More Granular Data = Quicker Response Time 18
  19. 19. Merchandising Scorecard Then (Q1’07) Now (Q1’08) Gained/sustained market Gaining/sustaining market share in half of our merchandised share in a quarter of our categories categories Average comp store inventory Comp store inventory down 7% SAP Core Retail being piloted in Evaluated Core Retail and Canada; new merchandising U.S. merchandising tools tools for U.S. Reduced promotional activity Higher rate of by 25% promotional activity More effective smaller resets Major store resets Website disconnected Website more integrated with the business from the business 19
  20. 20. Merchandising Transformation: Results Driving Understanding Driving Improving More Customers’ Market Share Gross Margin Sales Preferences Gains Dollars Q1’08 Garden Results Sales GM % Inventory GMROI Good Inventory Management = More Gross Margin $ 20
  21. 21. Sustaining Sales & Margin Gross Margin Long Term Short Term • Refined merchandising This Year transformation • Focused bay – Price philosophy approach • Seasonal – Line structure inventory flow – Marketing integration • Project business – Space allocation • Rationalize • Supply Chain benefits • Line structure promotions • Better customer insight 2008 2009 2010 2011+ Building Tools to Drive Sustained Execution 21