November 20, 2006
Home Depot continues to move away from core business
Will the sales associate be knowledgeable about this new product?
What about the space needed to merchandise , will it be the same in all stores or will customers have to search for it.
Analysis: I think home depot is diluting its core business by expanding into non traditional candy and electronics. I don't think the public will be fooled into purchasing items that are not traditional for this type of store. If I want electronics I go to best buy or Radioshack. When I want home improvement items I shop Lowes or home depot. I don't think its a natural fit and I think customers will reject it.
Secondly I don't see the sales associate being as knowledgeable about electronics as they are about home improvement. I don't forsee the training needed to sell this complicated line of merchandise.
Lastly space, I don't see a common place for this merchandise throughout the store, therefore the consumer will have to search out this new category. I also think this space could be utilized for a hot home improvement item, if there is one to be found.
Home depot might learn from Lowes venture into electronics in the late 1990's. It wasn't pretty. What wasn't lost due to theft was given away as consumers perceived this as a lost leader and drove prices down. Without margin to be made Lowe's quietly went out of the electronics business.
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