The Home Depot is sharpening its focus on the professional contractor market, leveraging a dual strategy of digital innovation and strategic acquisitions to grow its B2B business.
The company highlighted considerable progress in its “Pro ecosystem,” a series of initiatives designed to streamline the complex needs of its most valuable customers.
“We are growing market share with these initiatives,” CEO Ted Decker told analysts on a recent earnings call.
The Home Depot Inc. ranks No. 4 in the Top 2000 Database. The Digital Commerce 360 database ranks North America’s largest online retailers by their annual ecommerce sales. Home Depot is also the top-ranked retailer in the Top 2000’s Hardware & Home Improvement category.
How Home Depot is improving B2B sales
Home Depot also uses technology to remove friction from the Pro digital purchasing experience. According to senior vice president Ann-Marie Campbell, Home Depot is “maturing the new capabilities we have built for Pros working on complex projects.”
A key development is the expansion of the company’s trade credit program. Campbell reported a “double-digit lift in their spending across channels” from Pros who have adopted the new credit accounts. The company is working to allow Pro customers to “seamlessly use trade credit for in-store purchases,” creating a unified experience. In addition, a new order management system provides critical flexibility. It enables Pros to “reserve inventory, modify orders before fulfillment and invoice upon delivery.”
The company is also using machine learning to create what Campbell described as “the fastest delivery speeds across the greatest number of products in company history, both on the same day and next day.”
This technology optimizes delivery routes and locations. It helps ensure that products get to the job site as quickly as possible, a crucial factor for time-sensitive projects. This approach has led to a “double-digit lift in spending” with customers who utilize the faster delivery options, as they “return more frequently to shop in stores and online.”
Home Depot’s focus on Pro customers
Beyond its digital efforts, Home Depot’s Pro growth strategy is significantly bolstered by strategic acquisitions that expand its physical footprint and product assortment.
Decker highlighted the successful integration of SRS, a distributor of specialty building products. He noted that the acquisition “has exceeded our expectations, driving market-leading growth, accelerating our organic ecosystem efforts and driving revenue synergies.”
He explained that SRS has given Home Depot the “right to win with the specialty TradePro, enhanced development of our Pro ecosystem and provided a number of cross-selling opportunities.”
Building on that success, the company is now pursuing the acquisition of GMS, another leading distributor. Decker explained that this move will add a “highly complementary adjacent vertical to SRS’ business with differentiated capabilities.” It would broadening the company’s distribution network with over 1,200 locations and a fleet of 8,000 trucks.
This expansion is designed to provide Pros with a deeper and broader assortment of products and services. That would ensure the company can meet the demands of even the most complex construction projects. Decker stated that the GMS acquisition will be “additive to our organic efforts to better serve Pros working on complex projects, enabling us to offer a deeper and broader assortment of interior building products and services as well as additional fulfillment options.”
Home Depot’s strategy and outlook
As the retail landscape continues to shift, Home Depot is betting on a blend of technology and strategic acquisitions. It seeks to cement its position as the go-to partner for the professional contractor, a key pillar of its long-term growth strategy.
Home Depot executive vice president of merchandising Billy Bastek noted the strength in “many Pro-heavy categories like dimensional lumber, concrete and decking.”
Home Depot reported Q2 gains and reaffirmed its fiscal 2025 outlook. Meanwhile, it’s moving forward with a transformative acquisition that would significantly expand its reach in professional building materials distribution.
For its fiscal Q2 ending Aug. 3, sales rose 4.9% to $45.3 billion. That’s up from $43.2 billion a year earlier. Net income remained flat at $4.55 billion, compared with $4.56 billion last year.
For the first half of fiscal 2025, Home Depot reported sales of $85.1 billion. That’s up 7% from $79.6 billion in the prior-year period. Net income declined 2.2% to $7.98 billion.
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