The aftermarket’s reaction to the announcement that Home Depot would start selling selected automotive products was immediate and mixed. There are those who will now view Home Depot as being a villainous despot taking some business to which it’s not entitled, while others viewed the news with a roaring yawn.
My first reaction was that this makes sense for Home Depot because their customers are largely DIY males. It’s reasonable to think that if they’re inclined to do home improvements themselves, they’re likely to want to do some car maintenance as well. Being able to pick up items for the home and car at the same place is certainly efficient and, if some of those items cost less (reportedly as much as 22 percent less), then customers would have to be stupid to drive to other stores to pick up the same items. In essence, we may be starting the Western Auto cycle all over again. If so, bicycles might not be far behind. (And perhaps we’ll have to go back to the future by reverting to our former name, Home & Auto.)
Although the rollout of automotive offerings was introduced as a pilot program in 10 Jacksonville-area stores, Home Depot did provide Aftermarket Business a couple clues as to its long-term intentions.
First, the company is offering much more than the originally reported appearance and maintenance chemicals. Besides those low-margin, quick turn items, the spokesperson told us that the company will offer hundreds of other products, which will include electronics, interior accessories, towing accessories and truck accessories.
Second, and more revealing, is that the Home Depot spokesperson told us that he expects the company’s automotive offerings will appeal to both DIYers and professionals. Is the professional automotive counter far behind?
There’s been some speculation that one of the major auto parts store chains would partner with Home Depot, possibly even setting up a branded section in Home Depot. A scenario like that certainly would be beneficial for Home Depot, but could have a detrimental effect on an auto parts chain. Why would an auto parts chain want to drive more business away from its own core business for lower margins? In my humble opinion, it ain’t going to happen.
For the moment, Home Depot’s efforts will be regarded as a bit of a joke. Customers may not even be able to find the 500 sq. feet of automotive products in stores that feature 100,000 sq. feet of retail space unless the company puts them in the entry way and advertises heavily (which it will).
Even if Home Depot has moderate success, multiplying it by 1,500 stores will impact many aftermarket businesses to some degree. Maybe yours. So rather than worrying about how Home Depot will fare, spend your time contemplating your next strategic move to grow your own business.
