How Home Depot navigated a demand boom during COVID-19

We caught up with Fahim Siddiqui, senior vice president of information technology at Home Depot, to talk e-commerce trends and digital transformation for the retailing giant.

Pandemic pivot: How Home Depot managed demand spikes

Fahim Siddiqui, senior vice president of information technology at Home Depot, has seen a blitz of demand for e-commerce, marketing, merchandising, and supply chain amid the COVID-19 pandemic.

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 Fahim Siddiqui

Home Depot

And Siddiqui's team and agility are some of the big reasons that Home Depot is one of the digital transformation winners. We caught up with Siddiqui to talk application development, digital transformation, and the new normal for retail.

Here are the highlights of our chat.

How COVID-19 affected demand  

Siddiqui said Home Depot saw a spike in its digital channels. In addition, the interaction between digital channels, customers, stores, and associates shifted.

He said:

We had to rearrange that whole equation, because we had to put crowd limiting in place, we had in places to really deliver on the curbside, which we had never done before and then to scale it.

Then we saw a lot more engagement on our digital channel. And engagement, in our case, in digital channel was not just about buying online and getting it delivered. It was around buying online, picking up in store on our easy to pick up lockers, as well as really offering express garden delivery services.

Curbside pickup in a hurry  

Home Depot has been on a journey in recent years to move to a One Home Depot architecture that connects logistics, delivery, supply chain, customers, digital channels, and associates. One key effort revolved around standing up curbside pickup quickly.

Also: Walmart, Target, Home Depot and Lowe's: How their digital strategies paid off | Home Depot digital transformation plan takes longer to pay off Home Depot plans to hire 1,000 IT pros as it builds the tech behind One Home Depot strategy  

Home Depot also used DataStax and Apache Cassandra to stand up curbside apps quickly.  Siddiqui said Home Depot is a big open source shop.

Siddiqui explained:

Some of the tenants of that One Home Depot journey has been creating a set of common services, a common API, a common compute environment. There will be shared decisions between all our different channels. As we've developed these common services, we have been able to really reconcile what a customer sees online, what an associate gets to see in store and how to connect it all together.

As those services were available, our mobile application, and our first phones, which are in our associates use in the stores. We did not offer by curbside pickup before all of this happened, but we were able to in a very agile manner, build a solution. The first solution was really in a matter of few hours.

And then with the rapid testing in two weeks, majority of our US stores implemented curbside pickup. And the first one, customers are manually checked in by a Greeter, and there was manual release of the order by the Runners. In the next iteration, customers could text us or call when they were in the parking lot. And associates had an app guiding through the order release using the first one mobile devices. Then we embedded the application of that into our app and brought geo-fencing in, automatically we can communicate to a customer in the parking lot, what car they are in, and our associate knows and can deliver the order.

Architecture

Home Depot said its technology stack revolves around the same common source of the truth, data management, and then followed by microservices, which can be utilized by multiple applications.

A cloud architecture also was critical to managing a 300% spike in traffic and 80% order volume increase. Siddiqui said:

Being on the cloud, made it all happen, basically on demand. We are able to deal with the spike. We were 100% available to all of our customers all the time, through all of this. And we continue to be, maybe say, Black Friday is not a day now, it's any given day of the week.

It's a season of shopping for us now. And last year we migrated entire data warehouse to the cloud. In doing that, a lot of good things happened. One is we have very connected view of all of our traffic, all of our financial picture, as well as our total volume, all available in one place on demand, constantly refreshed.

COVID-19 and accelerated digital transformation  

Home Depot had its One Home Depot strategy, but COVID-19 served as a great test of the plan and how it could come together. Siddiqui said:

I think what COVID did was exercise all the muscle that we had developed and put in place for the One Home Depot itself. And what it really showed is that the online and our apps have really become the front door to our stores. We saw lot more of our customer journey starting either on the app.

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Build vs. buy

Siddiqui said Home Depot buys if it is in best in class but often chooses to build applications based on its needs and strategy. Software tools that are bought include things like Workday, SAP, and Salesforce. The build side of the software equation goes like this:

When we see that we have unique challenges in terms of our unique business model, that we need to model in our applications, we go and build that. As you recall, we hired 2,000 new engineers and use that muscle to really build applications. For instance, on our e-commerce platform, we are now one of the top five e-commerce platforms in North America. And all of that is custom software that our teams have built and deployed and we have agility where now we are doing multiple deployments a day.

You've seen similar opportunity and developed capabilities for our warehouse systems. Our delivery warehouses are unique and we are now able to actually hire an associate and within five minutes they are productive on the warehouse, no more training required. That's the quality of the user experience or delivery.

Artificial intelligence and machine learning is another area where Home Depot will build its own applications.

All of Home Depot's home-grown apps are built on open source.

Multi-cloud

Home Depot manages its own private cloud and data center and uses both Google Cloud Platform and Microsoft Azure. Siddiqui said:

Think of us as a hybrid cloud, we actually have our private cloud in our data centers. We also have both Google Cloud, which was our first vendor for the cloud and Azure as well. Being able to really deploy into multiple clouds and have the resilience and competition is good. There's bunch of stuff that we've done in our data centers, which it is absolutely the right place for it to be. It's the best cost profile for us. It's the best in class operations organization with our data centers and we continue to leverage that.