Home Depot banks on more aggressive holiday operation
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Next to the unwelcome display of Toro snow throwers, elves in orange polo shirts are on the job at the Home Depot store in Cranberry. They've brought their own snowflake ornaments and sprayable snow.
So what if Congress is still squabbling over how to keep the government running and local unemployment numbers rose again last month and the stock market has kept investors nauseous with its wild up and downs?
The holiday season must go on.
Home Depot is depending on it. The retailer, which didn't sell much more than a few lights and lots of live trees until six years ago, has expanded its holiday merchandise offerings and turned the arrival of its seasonal goods into a well-organized project worthy of Santa Claus and his global operation.
A 14-person merchandising executive team descended on the Cranberry story at 5 a.m. Monday and spent two days checking confidential "plan-o-grams" as they created the Christmas department, even as another team worked on the West Mifflin store. In Butler, shoppers can expect their store to get the holiday treatment starting today.
By late October, most of the hardware chain's Pittsburgh area locations will be a wonderland of acrylic snowmen, Martha Stewart ornaments and easy-to-assemble artificial trees.
This comes even as report after report details how consumers are cutting back on spending every way they can. Deloitte this week predicted holiday sales -- those between November and January -- might grow between 2.5 and 3 percent, down from last year's 5.9 percent gain.
"Despite some relief in energy prices, consumers may feel the strain from food, apparel and other categories where prices are markedly higher compared to the previous holiday season," said Carl Steidtmann, the New York accounting firm's chief economist, in his official analysis.
For hardware chains such as Home Depot, a good seasonal pop can help offset sales that have been pinched by a rough housing market in recent years.
Home Depot is counting on consumers to need a little holiday cheer -- and maybe to fall in love with the $19.98 stocking that has Elmo singing "Jingle Bells" or the $19.98 stuffed Mickey Mouse squeaking out a medley of familiar tunes.
"Holiday has grown for us," said Jennifer King, senior manager, public relations for the Atlanta-based retailer's northern division. "We have bought more this year.
"People want to feel good."
Nothing spurs good feelings like a 15-foot-tall inflatable lighted hot air balloon or a 16-foot lighted Santa's sleigh, both available for $169. Displayed on top of the store's towering shelves, they reach almost to the ceiling.
Chris Raehn, merchandising execution manager for this particular team, spent time in July talking with the store manager about where everything would go, from the five bays of lights to the display of pieces for miniature train aficionados.
Most of the year his team works the aisles of nine area stores, making sure vendors items are stocked correctly. Home Depot used to have third-party service groups setting up displays. "As you might expect, the level of execution delivered from these numerous organizations vary dramatically," Marc Powers, Home Depot's senior vice president of operations, told investors and analysts in Boston last December.
Mr. Powers added, "The merchandising execution teams have proven to be very efficient in delivering consistent execution of opportunistic sales events across all of our stores."
On Tuesday, the merchandising execution team working the Cranberry reset was still fine-tuning its effort, which will be repeated again and again.
A new corporate system of putting big color-coded stripes on the cardboard shipping boxes won raves for making it easier to sort the artificial trees from the lights from the yard displays.
As boxes were ripped open, trees lugged into place and pricing stickers placed on shelves, every once in awhile, an item would break into song. "Honestly, we do test them to make sure they all work," said Mr. Raehn.
There were buttons to push on the expanded LED lights displays, where colors change and light flash. Buttons on cardboard signs to be set up near artificial trees triggered instructional commentary. "The GE tree features a quick and easy assembly," explained one in a woman's voice familiar to transit riders.
Technology, both in sales systems and merchandise manufacturing, has helped drive sales in holiday decor, even if most Americans already have a pile of decorations in the attic.
Consumers like the displays that allow them to try out the new goods, and the addition of QR codes, read by smartphone apps, offer more information. Manufacturers now promise warmer colors in the new LED lights and hope that tinkering with time-honored items such as wreaths -- lights fueled by batteries, anyone? -- will drive sales.
Is the holiday merchandise here too early?
Ms. King said Home Depot is actually starting a week later than last year. And customers have told the retailer that they want to the decorations to arrive about now and all at once -- not to trickle in. They want to see what is available, so they can make their plans as they budget expenses, said Ms. King.
"Even in a tough season, people want to decorate," she said.
First Published September 28, 2011 12:00 am