How Home Depot Was Started : Arthur Blank and Bernie Marcus’ Start Up Story
Whenever you visit the Home Depot, do you ever wonder how it started? How did it rise to become a one-stop shop that has everything you could ever need for your home?
It was in 1978 when Arthur Blank and Bernie Marcus established The Home Depot (HD) in Atlanta, Georgia with the help of Ken Langone and Pat Farrah. The company started with a vision of providing a store for do-it-yourself (DIY) home improvements. There were other home improvement giants in the market during that time, but Home Depot’s founders believed in their goal of becoming the best and this was what fueled their vision and mission. They wanted to be different than their competitor and also wanted to be the biggest among them. Arthur Blank once said: ‘Bernie and I founded The Home Depot with a special vision – to create a company that would keep alive the values that were important to us. Values like respect among all people, excellent customer service and giving back to communities and society.’
When they opened their first few stores, each being about 60,000 square feet, they made a tremendous impact overnight that belittled their competitors. They filled their warehouses with thousands of products and even stacked piles of empty cartons to make it appear that they have thousands of products that clients can choose from. Even at the start of their business venture, Home Depot was able to revolutionize the DIY market. They were creating waves in a matter of days.
In 1981, Home Depot listed their company on the New York Stock Exchange (NYSE), and by 1986, the company was able to report sales amounting to about $1 billion. In 1997, Home Depot’s sales rose to $20 billion that made the company the fastest growing home improvement retailer. This success is attributed to the strategic pillars that the founders strictly follow: high service, low price, and market saturation.
Since their founding, the company worked on providing the best service for their customers. They made sure that all of their associates undergo in-depth product training to better assist customers in their projects. You can expect each associate would give you the proper information like how to change an angle valve or how to operate a power tool. Another good thing is that Home Depot has their own Customer Bill of Rights that they strictly adhere to. Customers feel that aside from the quality products that they buy, they can also get a good deal by getting the proper information about the products.
To most customers, getting the best customer service is a major come on. This is what Home Depot maximized, as they build their company. They rely on person-to-person interaction to give the maximum satisfaction to their customers because they know that when customers are satisfied, they will keep returning and recommending – this will further increase their visibility.
Home Depot, as mentioned, became the fastest growing company in their field. This allowed them to get significant indulgence from manufacturers and suppliers to give them the lowest price possible. As their acquisition price is lower, they are able to offer it to their customers at a more affordable price compared to their competitors.
Home Depot’s marketing strategy of getting the most suppliers and manufacturers to trust them is the envy of their competitors. Since they made an impact from the beginning that they have almost everything you need for home improvement, it was easier for this retail giant to negotiate lower prices from their suppliers, saturating the industry by getting a larger percentage of the products available in their stores.
Additionally, Home Depot is home to several exclusive brands like Martha Stewart Living, GAF Roofing, BEHR Paint, and Sur La Table to name a few, which made them one of the most trusted retailers for home improvement products. They also added a slogan to communicate to consumers that the company is there to help them in home improvement and save money at the same time.
Their slogans include: “The Home Depot, Low prices are just the beginning;” “When you’re at the Home Depot, You’ll feel right at home;” “The Home Depot: First In Home Improvement!” “You can do it. We can help.” and“More saving. More doing.” These said slogans enabled the company to reach more clientele.
Home Depot Credit Cards
Home Depot offers customer credit cards to their clients, allowing them to buy goods on credit. This makes the purchases there easier and helps the chain realize bigger sales. The company offers different types of financing to its customers. Currently, a buyer could take an interest-free loan for six months and this is only one of the things the management does to make it easier for everyone to buy stuff there.
At the start, Home Depot’s clientele is mainly from the non-professional sectors that do mostly DIY projects. Now, the company, with their lower price, is also attracting the professionals. There are home building contractors who now rely on Home Depot’s collection of home improvement products for their materials. Home Depot is also a favorite for the up and coming designers who want to be in the home building industry because they can learn from the associates’ knowledge, especially when it comes to novel products.
This home improvement giant is now one of the world’s most valuable brands, ranking number 48 according to a Forbes.com study. The company’s value is estimated to steadily increase in the coming years. Their ability to revolutionize the home improvement market and cater to their customer’s needs is one of their strengths. They even invaded the online market when they launched their online store that easily manages to attract about 100 million visitors yearly.