Home Depot is installing lockers in its stores for pickup of customers' online orders, part of a more than $11 billion, three-year investment into the future of the business, the retailer said in an email to Retail Dive. Lockers were first tested in early 2016, and were rolled out more widely late last year. All stores will get them over the next few years, the company said.
The lockers offer three compartment sizes that can hold more than 60% of items available through the retailer's "Buy Online, Pickup In Store" program. Items that don't fit can be picked up at the customer service desk.
About 45% of Home Depot's online orders can be picked up in store, and the lockers allow the retailer to simplify that process, the company said.
Home improvement sales are finally making their mark as a growing e-commerce niche, and, while Home Depot's high level of service for professionals and amateurs alike protects it somewhat from online competition, the company doesn't have much choice but to foster its own online channel.
Home Depot's first quarter e-commerce sales rose 20% this year, while Lowe's said it saw comp sales growth of 20% online in its first quarter, or about 5% of sales.
Amazon remains a small player in the space, although its marketplace gives shoppers a range of products that rival the big box players, according to a benchmark report emailed to Retail Dive from product experience platform Salsify. Home Depot's $24.9 billion in sales in the first quarter alone vastly outpaces Amazon's $6 billion take in the segment for all of last year, so the home improvement giant isn't likely feeling Amazon's impact at the moment.
But Amazon's growth is outpacing everyone in the category, and it has a smooth path upward. Analysts predict that traditional home improvement and hardware stores may not be immune to the "Amazon Effect" forever, and that makes in-store pickup options like lockers crucial.
Home Depot's move also marks a growing trend for self-service pickup lockers. Walmart, United Parcel Service and Amazon have all expanded their versions of the concept, and more than half (52%) of specialty retailers offer in-store pickup options to meet customer demand for speed and convenience, according to research from Astound Commerce.
While Amazon has expanded lockers at places like college campuses, apartment buildings and its own Whole Foods stores, a retailer like Home Depot with a vast network of stores has something of an advantage when it comes to in-store pickup. The option meets the consumer desire to avoid shipping charges on their online orders, according to Astound, which found that 57% of shoppers hunt for free shipping offers, making "low shipping rates" too expensive for most.