How Home Depot and Lowe's are Capturing the $450 Billion B2B Pros Market

Large home improvement retailers like Home Depot and Lowes are focusing aggressively on B2B building professionals and contractors. This new customer segment is driving growth for both retailers as Home Depot’s most recent earnings report showcased the highest quarterly sales and earnings in the company’s history. Perhaps most illustrative of home improvement retailer’s buy-in to capture B2B customers is Home Depot’s updated TAM calculations. Home Depot President and CEO Ted Decker announced the company had updated its TAM to $900 billion earlier this year, with $450 billion of that being in Pros. The CEO noted B2B channels as a “tremendous opportunity”.

Part of the retailer's strategy to capitalize on this opportunity is by tech-enabled offerings to better facilitate B2B transactions. Home Depot president and CEO Ted Decker boasted “record downloads, traffic, and sales via [Home Depot’s] mobile app” this past quarter. Both Home Depot and Lowes are investing in digital tools to offer B2B customers efficient and tech enabled fulfillment, financing, and business management tools. Based on past earnings calls and our research, Home Depot has already surpassed 50% of sales coming from B2B customers while around 25% of Lowes’ revenue is from B2B Pros. Home Depot and Lowes haven’t achieved this massive growth solely in-house, both retailers have forged a number of tech partnerships or made acquisitions in B2B distribution, IoT, logistics, AI, and more.

#B2B #homedepot #homeimprovement
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