Home Depot (HD) has grown into a giant retail chain by helping consumers fix up their own houses. It's also getting an overhaul of its own.
The country's largest home-improvement chain said on Friday that Craig Menear, its president of U.S. retail operations, will succeed chief executive Frank Blake, who will keep his chairman title.
The change puts a 34-year retail veteran with stints at Ikea and Builders Emporium at the helm. Investors will be looking for Menear to continue Home Depot's recent strong financial performance, which may come under pressure from lagging U.S. consumer income and higher interest rates.
Still, the company has come a long way since just 2007, when Blake took over from Robert Nardelli, a former General Electric (GE) executive with no retail experience. While Nardelli boosted the company's sales, he also pared costs -- and employees -- leading to customer complaints about inadequately staffed stores.
In the last few years, Home Depot has sought to shift gears in response to the industry's challenges, and its shares have lifted off as the U.S. economy, particularly the housing sector, rebound. Below are five ways the company is upgrading its own house.
Boosting online shopping. Known as the place to pick up a carload of tools and supplies, Home Depot also wants to be thought of as a source for online purchases. In 2013, the company rolled out its "buy online, ship to store" service, and earlier this year bought online window coverings company Blinds.com. About 4 percent of its $79 billion in sales now stem from online orders, which rose 38 percent in the second quarter alone.
"Our online business continued to show strong growth," Menear said this week in an analyst call to discuss the company's latest results.
Giving employees more time with customers. Realizing that customers who shop at Home Depot often are looking for some helpful advice, the company has sought to give its employees more time with shoppers. At the end of 2013, the company reached its goal of dedicating 60 percent of its store labor hours to helping customers, according to its annual report. To further enhance customer service, the company later this year will start equipping workers with Internet-enabled phones they can use to help customers and process purchases right on store floors.
Halting new store openings. After a huge national expansion, the company this year hit the brakes. Why? "As you added stores to a finite group of households, each store becomes less profitable," Blake told The Wall Street Journal in April. Instead, the retailer is focusing on boosting sales at its existing stores and online operations.
Adding innovative products. Home Depot has sought to add distinctive products that will drive consumers into its stores, such as Wifi-enabled home equipment, as well as proprietary or exclusive brands.
Tapping into data analysis. The company has invested in upgrading its back-end technology, including buying data analytics company BlackLocus in 2012. That's helped the firm make "focused merchandising decisions based on complex sets of large amounts of data," its annual report notes.