The Home Depot logo. (PRNewsFoto/The Home Depot)
The Home Depot logo. (PRNewsFoto/The Home Depot)

This article originally appeared on the PROSALES website.

Home Depot is continuing investments to improve capabilities for professional customers, by onboarding more pros onto its B2B website, broadening tool rental capabilities, and expanding its shipping capability from direct fulfillment centers. In the company’s first quarter 2019 earnings conference call, Home Depot announced pro sales once again outpaced DIY sales and contributed to the 5.7% increase in sales year over year (YOY). Home Depot’s definition of pro includes remodelers and builders, as well as maintenance, repair, and operating supply workers.

With pros reporting being busier than ever, Home Depot president and CEO Craig Menear said investing in the pro customer portfolio is increasingly important. In addition to having the brands pros “care about” in stock, Menear said the value proposition for pros via the company’s B2B website experience is “unique to the marketplace.” After onboarding 100,000 pros during the fourth quarter of 2018, the retailer hired an additional 35,000 in the first quarter of 2019. Menear said the company plans to garner more than 1 million customers by the end of the year.

The pro-focused, B2B online experience is part of the retailer’s plan to enhance its digital offerings and offer an interconnected shopping experience for all customer groups. Home Depot added several elements to the B2B website during the first quarter according to William Lennie, executive vice president of outside sales and services.

“We added an administrator in user hierarchy, which allows administrators or account owners to add purchasers or users. We also now allow customers to easily link their purchases to QuickBooks and upload their purchase history,” Lennie said. “And then in Q2, next up, we'll enable the Pro purchase card. [Pro’s will] be able to use that Pro purchase card online and have their purchases attributed back to their account.”

The investment was part of Home Depot’s wholesale effort to improve its interconnected platforms in the first quarter. As a result, online sales grew 23% YOY for the retailer.

Home Depot’s tool rental program also offers an engagement point for pro customers. Menear said the retailer is increasing investment into the rental program and added “the more dimensional the relationship is with our pro customers, the more they spend.” Menear said one in four pros rent tools from Home Depot, up from 10% of pro customers seven years ago. Executive vice president of merchandising Ted Decker said the company has 1,110 tool rental centers in North America. Decker said the company is investing in more space, more tools, and better technology to improve the customer experience with the tool rental program.

The retailer’s market delivery coverage also is expanding, increasing the capacity to serve pro customers. Home Depot opened its first market delivery operation in the second quarter of 2018, as part of the retailer’s plan to expand fulfillment centers and serve the pro market. The direct fulfillment centers provide one- and two-day service to over 90% of the population.

Mark Holifield, executive vice president of supply chain and product development, said Home Depot now offers one- and two-day delivery service to all pro customers in every major metropolitan area in the U.S. Holifield said next-day parcel shipping from direct fulfillment centers has the capacity to reach 36% of the population.

“We've begun to retrofit our Hagerstown, Maryland direct fulfillment center for further parcel shipping,” Holifield said on the call. Because of its proximity to the population centers of the Northeast, that will get us to next-day delivery of parcel for 50% of the U.S. population by the end of this quarter.”

The retailer has planned new direct fulfillment centers in development in Dallas, Texas and Seattle, Wash. Holifield said Home Depot plans to open a flatbed delivery center out of Dallas, Texas, later this year, catering directly to pro customers. The retailer also has car and van delivery available to DIY and pro customers, with the capacity to reach 40% of the population via car and 70% of the population via van, Holifield said.

Big-ticket sales—transactions of $1,000 or greater—were up 3.9% in the first quarter and represent approximately 20% of all sales in the U.S. Excluding hurricane-related markets, big-ticket sales were up 5.1%. Decker said wet weather in February had a “significant impact” on big-ticket performance and big-ticket comps were flat in the month of February. Decker also said lumber price deflation negatively impacted big-ticket comps. Weather and lumber prices also negatively impact sales growth overall in the first quarter. Decker said average ticket comps increased 2% in the first quarter YOY, but growth would have been closer to 3% without lumber price deflation.