Home Depot Inc.: Management Meeting Takeaways

Research evidence excerpt

Home Depot Inc.: Management Meeting Takeaways

Barclays | Home Depot Inc.

Online: Online sales now represent ~20% of core U.S. sales, and growth continues to outpace

the industry. HD will re-platform its app in 2H, which will help improve the customer experience.

Retail media seems to be growing fast, with more opportunities ahead. Marketplace also seems

to be a focus, with an opportunity to expand the assortment, although in a disciplined way.

Delivery speed and accuracy remain major investment areas, particularly for driving complex

Pro sales. Same-day/next-day delivery reached ~55% of total deliveries in December, up from

~13% in 2022, and seems to be trending above that now. HD is also piloting two-hour delivery in

Atlanta and seems pleased with early results. While online margins are still lower, cost per order

is declining as delivery scales and other offsets ramp. HD highlighted better order management

and batching capabilities and is working on leveraging assets across its various channels to

optimize delivery.

AI: The near term opportunity seems more focused on productivity, along with improvements

to the company’s website/mobile app rather than from offsite agentic commerce. HD discussed

increased consumer and associate usage of its Magic Apron AI assistant and is currently piloting

a new AI tool with enhanced features and in-store functionality. Referral traffic from LLMs

remains low, and actual offsite transactions have been immaterial.

The store tour reinforced that HD is leveraging tech and AI to drive more real time decision-

making and greater productivity. The company showcased new tools that provide store leaders

and management greater visibility across stores and markets, identify product trends, optimize

labor, and improve on-shelf availability.