Branding Home Improvement

Rachelle GinsbergIrene TzouganakisAdam BerkWayne AndermanVince Rubiera

Home Depot

• Founded in Atlanta by Bernie Marcus and Arthur Blank.

• Worlds largest home improvement chain; second largest retailer in the U.S.

• 40,000 products - 2,100 stores.

• Grew into five states within the first five years.

• Targets the DIY and pro markets with a broad product assortment.

Lowe’s

• founded in N.C. by H. Carl Buchan

• #2 U.S. home improvement chain

• 40,000 products - 1380 stores

• 1961, Lowe’s went public @ $12.25 a share.

• 1979, had 200 stores and was listed on the NYSE.

• 1982, had its first billion dollars in sales.

ACE Hardware

• Founded in 1924 by Richard Hesse, E. Gunnard Lindquist, Frank Burke and Oscar Fisher in Chicago

• 4700 stores • 1928: 11 retailers joined the cooperative• 1929: first warehouse, 25,000 square feet in Chicago. • 1986: Jon Madden became spokesperson (positioning)• #1 hardware cooperative in sales in the U.S.

Annual Sales

( $ millions)

90,837 46,927 3,770

Employees 364,000 210,000 5,000

Market Cap

( $ millions)

70,575 45,738 N/A

1 Yr Sales

Growth

11.4% 8.5% 8.8%

Market info

Schlage Double Keyed Deadbolt,

All Finishes

Target Product

Home Depot Experience

• Sample: 5 (Miami & Broward)• Inventory - target brand - mean: 25• Inventory - alternate brands - mean: 29• Negotiation – on sales > $5,000• Aisle configuration and presentation

• Closest to Aisle entrance at eye level or just below• Displayed on swivel boards after inventory , eye level • Display organized by finish, but crowded• Easy to find• Touch screen display (Kwikset)• Dimly lit and dirty

• Service provided• Product knowledge: Poor• Qualified associates, hard to find• Overall service: shallow and hasty

• Sample: 4 (Miami, Atlanta, Memphis & Broward)• Inventory - target brand - mean: 11• Inventory - alternate brands - mean: 8• Negotiation - None• Aisle configuration and presentation

• Displayed on swivel boards eye level, product hanging below• Organized with great detail• Easy to find• Well lit

• Service provided• Product knowledge: extensive• Qualified associates: greeted by master locksmith• Overall service: patient and thorough (personal shopper)

Lowe’s Experience

ACE Experience

• Sample: 6 (Miami & Broward)• Inventory - target brand - mean: 8 (2 stores had 0)• Inventory - alternate brands - mean: 16• Negotiation – Volume (manager discretion)

Service provided Good Bad

Knowledge High Very poor

Qualified Associates Patient and experienced None

Overall Service Excellent Very poor

Aisle configuration/presentation Good Bad

Display Pottery barn Very dirty, messy & on floor

Lighting Well lit Not well lit; ambient light

Aisle Clean and spacious Cluttered and narrow

Price Ranges

HD Lowes Ace

Schlage $31.54 – &42.84 $38.97 - $43.97 $45.99 – $49.99

Kwikset $15.47 – $25.97 $16.97 – $29.97 $24.99

Guard $14.99

Ace Brand $16.99 – $21.99

Ultra Security Plus $16.99 – $20.79

Oultra $22.39

Defiant $9.97

Pegasus $32.99 – $34.99

Baldwin $49.98

Tell $27.78

Gatehouse $11.97

Metrics

MetricMean Time

Home Depot Lowes ACE

Starting point to store parking lot 6:10 9:30 8:27

Parking lot to space 0:28 0:15 0:23

Space to front door 1:04 0:45 0:58

Total travel to store 7:42 10:30 9:48

Door to product aisle 1:21 1:00 0:47

Time to find product in aisle 1:50 0:12 0:31

Total product search 3:01 1:12 1:18

Collecting product to check-out line 0:30 0:48 0:21

Time thru line- self checkout 3:24 2:07* N/A

Time thru line- employee checkout 5:00 1:48 2:03

Service wait time- in aisle 4:20 Stationed 2:50

Service wait time- from another aisle 7:06 None N/A

Total Service wait 11:06 None 2:50