The Home Depot has bought a highly respected plumbing-and-heating wholesaler for a very straightforward reason. The retailer wants more business from professional contractors.
This development should surprise no one, least of all contractors. Readers have seen ads for Home Depot and Lowe’s in CONTRACTOR for months, and many have commented on their appearance here.
As we pointed out in this space more than a year ago, the professional contractor represents a growth market for the big-box home centers. Our numbers then showed that 81% of a $118 billion home remodeling market was being spent on jobs done by professionals. While both those numbers are going up, sales to do-it-yourselfers are expected to remain flat.
Home Depot’s purchase of a wholesaler was the next logical step for retailers to try to reach professional contractors. Home centers already have expanded inventories of name-brand products, lengthened store hours, dedicated sales counters to contractors and advertised in trade publications to try to appeal to professionals.
Home Depot hopes that Apex Supply will show it how to penetrate the plumbing-heating-cooling-piping market even further. Apex is a smart, well-run company that has had success in all the market segments just mentioned.
Like other wholesalers, Apex Supply competed head-to-head with Home Depot for years and felt the retailer’s impact on its bottom line. As it turns out, Apex can teach Home Depot quite a bit about the wholesale distribution business. Chances are that Home Depot will learn a lot from Apex about reaching the phcp contractor.
As Home Depot applies these lessons to its stores around the country, we’ll all get a chance to see just how much the home center has learned. But a bigger question may be how much will other wholesalers learn from Home Depot. Say what you will about Home Depot, the company is no slouch when it comes to marketing its products, serving its customers and using technology to lower its costs.
Those wholesalers that lag in any of these areas may well be forced to catch up. Their contractor customers, of course, will be more than interested bystanders.
Contractors will be in a position to be the beneficiary of change, if wholesalers improve upon their efficiency and their customer service. Even more, contractors can be a further catalyst for change if they require their suppliers to better meet their needs as customers.
Bob Miodonski is the Editorial Director for CONTRACTOR magazine. He can be reached at 847/390-2123 or by e-mail at [email protected] or by mail at 1350 E. Touhy Ave., Des Plaines, IL 60018.