Home Depot is revamping its supply chain and is investing $1.2 billion in the process. Over the next five years, the retailer aims to speed up delivery of goods to homes and job sites as e-commerce continues to dominate the way that consumers shop.
According to the Wall Street Journal, Home Depot will add 170 distribution facilities across the US in hopes of reaching 90 percent of the country's population in one day or less. The new sites will contain direct fulfillment centers for next-day or same-day delivery of commonly ordered products, as well as 100 local hubs where bulky items will be consolidated for direct shipment to customers, the Wall Street Journal reports.
The overhaul comes as the company is trying to tamp down transportation costs and improve inventory managements by integrating its growing online business, the Wall Street Journal reports. Online orders reported made up 6.7 percent of the retailer's sales last year. Around 45 percent of online orders are picked up in stores, and the company is planning out installing self-service lockers at the front of stores to speed up order retrieval, according to the Wall Street Journal.
Home Depot is feeling the pressure from Amazon when it comes to delivery practices. The company is looking toward drop-shipping where supplier ship online orders directly to customers and opening warehouses closer to their customers.
The Wall Street Journal reports that the retailer is also in the process of testing the use of cars and vans for lower-cost delivery of smaller orders in some markets and expanding its network of flatbed trucks that can deliver loads of concrete and other building materials to professional customers.