Home Depot's Marketing Comes Full Circle

John Costello is Executive Vice President of Merchandising and Marketing for The Home Depot, Atlanta. He joined the company in November 2002 as Executive Vice President - Chief Marketing Officer. In August 2003, he assumed responsibility for merchandising, which includes visual presentation, store design and global sourcing groups. Costello was elected to the Retail Marketing Hall of Fame in 1997.Costello will deliver the Wednesday, Dec. 3 keynote address, "360 Degree Marketing: Driving Today's Brands by Maximizing the In-Store Environment," at the 2003 P-O-P Show/New York. A Q&A with Costello follows.What is 360 Degree Marketing?360 degree marketing is built on the premise that everything that touches the customer defines our brand, from the TV ads we run to the merchandise we carry to how we greet customers when they walk in the store. The in-store experience is critical, so we continue to place an increased emphasis on it, including all of our P-O-P materials. We want to create an environment that provides inspiration, information and the motivation for customers to make their homes better.How does The Home Depot practice this theory?I've been a believer in 360 degree marketing for years, and we've applied that in a number of ways across The Home Depot. One example is the rollout of our Color Solutions Center for paint in March 2003. It begins with great brands like Ralph Lauren, Behr, Glidden and Disney and is supported by an innovative, easy-to-shop in-store presentation. It contains unique color-matching technology that enables customers to build a room around the fabric from a favorite piece of furniture or wallcovering. Through computer technology, customers can create the most pleasing palette. We've also introduced larger paint chips that customers can take home to see exactly how the color looks on their wall. This concept also carries over to our hardware department, where our merchandise selection and P-O-P materials make it easy for customers to select just the right tool. Right now we're rolling out our new line of Rigid professional tools designed for pros and the serious do-it-yourselfer. The tools have added features that are backed up by very informative P-O-P.With competition like Menard's and Lowe's, how does The Home Depot set itself apart in-store?I think the key to long-term success in retail is focusing on the customer. It begins with understanding customers' needs and meeting those better than any of the other alternatives. The Home Depot does it by the combination of breadth and depth of merchandise, great everyday value and the know-how to get the job done. It's really summarized in the new advertising campaign that we launched last February: "The Home Depot is more than a store. You can do it, we can help." It was built on the premise that we are more than a store to our customers. We can help you select products and then install them through our at-home services division. Another important aspect of this is our 300,000-plus associates, who are very knowledgeable in their product categories and are very focused on helping customers get the merchandise and the product knowledge they need to complete their project.How can suppliers improve their working relationship with The Home Depot?Our suppliers are a critical partner in the whole process. First, they need to embrace our desire to meet customer needs better than anybody else. Second, bring us ideas and solutions along with best-in-class focus and service. Third, partner with The Home Depot from concept to execution and all initiatives, and finally, leverage their strengths with ours. We're looking for vendors that have the potential to be long-term partners with us. On the P-O-P side, our best partners are working very closely with us to understand what customers want and are translating that into the in-store experience.How has P-O-P changed over the years in the hardware industry?I think that P-O-P is taking an increasingly important role. Customers are looking for information but are more time-pressed than ever before. Retailers need to provide knowledgeable service for customers who want help, but also a very clear, easy-to-shop environment for customers who like to navigate the store on their own.Can merchandising still improve in the hardware industry?In general, merchandising has done a good job of responding to customer needs in the hardware industry. The challenge is to recognize that both the homeowner and pro are evolving, so we need to make sure that we are on the forefront of anticipating their needs. For example, the Rigid pro line was developed after extensive interviews with professionals on the job site. We asked them what they were looking for in ideal tools in key areas like power, durability and value, and then worked with our vendor partners to help develop the best products and merchandising possible.

Home Depot's Marketing Comes Full Circle

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