Home Depot Is Cutting Prices In A Recession
Home Depot’s response to the economy and fierce competition from Lowe’s and Walmart?
Slash prices. Brilliant huh? Read the full story here.
The discounts will begin showing up in stores this week and will last at least through the next quarter as the Atlanta-based chain tries to retain its top spot in the sector by striking back at competitors such as Lowe’s Cos. Inc. and Wal-Mart Stores Inc.
“We’re trying to gain market share in the process,” Craig Menear, Home Depot’s executive vice president of merchandising, told the Associated Press.
“Absolutely, we’re trying to drive sales and productivity,” he added.
Let’s look at this just from a branding perspective. Walmart OWNS, repeat, OWNS low prices. Home Depot doesn’t want to try and compete there right? Lowe’s is a copy cat of Home Depot with no identifiable brand identity. Answer me this, what does Lowe’s stand for?
So what should Home Depot do? Service, service, service.
Take a page from Zappos and dedicate the organization to helping customers make the best choices. Do you think the average consumer really cares if something may cost slightly more if you help them find a solution? Better yet, have your service people offer alternative solutions.
None of this is done on a consistent basis by anyone. There’s the differentiator. But you really have to dedicate the organization to it, not just say you’ll do it. How many times have you wandered into a Home Depot and have to hunt, beg and plead with someone to help you? I would say for me it’s always a given.
Playing in Walmart’s pond is not going to get you brand ambassadors, differentiating will.
Home Depot, dare to be different!
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September 17th, 2008 at 2:07 pm
Gives the message their prices were too high before. And customers will wonder, will service suffer?
September 17th, 2008 at 2:18 pm
Here are a few things reasonable marketers tend to agree with.
1) Competing on price is a terrible strategy, someone will always find a way to sell for less.
2) People eventually “trade-up” / go for quality.
3) It is easy to reduce a price but it is difficult to raise a price.
What will Home Depot do when the recession is over? Screw their new customers by raising prices?
I think it would be easier to offer a loyalty program that had the same net effect as lowering prices, but the prices wouldn?t be lower (directly). Home Depot’s solution seems to be too simplistic.
I totally agree with the service comment. People don’t go to Walmart for service. I’m not sure if HomeDepot needs Walmart’s customers so badly that Home Depot reduces itself to a Walmart.
October 3rd, 2008 at 8:46 pm
I think that before we start bashing we need to look at common sense, If you had the opportunity to buy gasoline at a cheaoer price would you do it?
Home Depot sells basic needs, where would you purchase a water heater if you needed one today. The reduced prices are on selected items for the home owner.
Do your home work before you run your mouth.
You must be a short seller or one that has put themselves in a morgage they cant afford.
October 4th, 2008 at 10:29 am
FWOB,
Let’s look at what you’re saying:
“If you had the opportunity to buy gasoline at a cheaoer price would you do it?”
Yes, I would, but isn’t gas a commodity? Is Home Depot now a commodity to you?
As far as me “doing my homework before I run my mouth” I would say I know branding and that’s my opinion. I’m pretty sure we still get to have those. You can agree to disagree but we shouldn’t be disagreeable.
As far as this comment from you:
“You must be a short seller or one that has put themselves in a morgage they cant afford.”
Not sure why you would be so rude but I can afford BOTH my mortgages.