Retail Loyalty Programs: How Home Depot Does Customer Loyalty

by Grace Miller |

Home Depot, the world’s largest home improvement retailer, is holding its own in this changing digital marketplace by staying on top of the multi-platform landscape, blurring the line between online and offline shopping and, most importantly, by offering some of the best retail loyalty programs in the industry to keep their customers coming back for more.

CEO Craig Menear recently said that the front door of Home Depot stores is no longer at their brick and mortar locations – it’s in the customer’s pocket. Clearly, he understands the value of retaining a broad customer base through multiple loyalty programs and discount offers sent directly to your phone, tablet or computer.

Among the big incentives for small businesses are volume discounts designed to entice you to spend more of your budget in one of their supercenters. All you have to do is spend over $1,500 (a mere pittance) on lumber, fencing, windows, drywall, insulation and more. Volume pricing is affordable to all at Home Depot, and the customer loyalty incentive is the feeling you get knowing you can compete with the biggest contractors. Now you can lowball bids on projects and, as a loyal member of Home Depot’s Pro Xtra program, you’ll get a quote on your materials within minutes via email, fax, phone, or in person at your local Pro Desk.

What’s the big deal, you ask? While many stores offer loyalty programs and volume discounts, Home Depot’s Pro Xtra advantage is that you can mix and match their discounts; your $1,500 minimum purchase doesn’t have to be all lumber or all drywall. In addition, any products can be considered, and you can combine their Pro Xtra bulk-pricing benefits with weekly specials and emailed coupons that go directly to your smartphone. If you’re tired of reading “Cannot be combined with other offers,” Home Depot has blurred those lines, too. Giving freedom of choice and flexibility to their customers is what makes Home Depot’s Pro Xtra program one of the best retail loyalty programs in the industry. It’s hard to resist discounts on top of discounts.

The Home Depot Pro Xtra Advantage

Speaking of mixing and matching, Home Depot has phenomenal customer loyalty programs for professional painters and painting contractors. For starters, they get a sizeable discount for volume purchases:

  • Spend $2000, get 10% off
  • Spend $4000, get 15% off
  • Spend $7500, get 20% off

When you’re enrolled in the Pro Xtra program, you also receive free direct-to-job site paint delivery, free factory tinting and color matching, and up to 5 years of color history by job. Even if you can’t remember what shade you painted the Henderson’s stairwell in 2013, Home Depot’s free database will remind you. That is not only a real convenience for the customer, it’s a very clever way for Home Depot to convert shoppers into lifelong loyal customers!

The Changing Digital Marketplace

Today, the digital landscape is so fast-paced and competitive that tech-savvy consumers are forcing retailers to cover all their bases using digital enticements and customer loyalty programs, and by hitting consumers where they live: on their mobile phones. Picture a couple descending on a Home Depot store glued to their smartphones, giving them instant access to an entire industry. They not only have the on-demand means to comparison shop across top consumer websites, they can also compare and contrast retail loyalty programs and digital coupons. In fact, consumers just have to scan the barcode on an item and their mobile phone shows them everything that’s out there. This makes it super-easy for consumers to feel like they are getting the best deal. However, it is not as easy for retailers to stay on top of changing trends, tastes, and platforms.


Home Depot Rising to the Occasion

Home Depot is elevating the experience of all shopping trajectories, allowing customers to choose freely and seamlessly. Home Depot customers can shop for over 300,000 products from the comfort and convenience of their homes to be picked up in-store immediately or shipped directly to them. According to Yahoo Finance, over 43 percent of all Home Depot online transactions are picked up in-store, partly because Home Depot home improvement centers are ubiquitous and easy to find, unlike Amazon’s new brick and mortar stores.

Remember that and rose from very different beginnings. The former started as an online bookstore, the latter began in 1978 in Atlanta, GA by a group of investors whose mission statement was to build a chain of home improvement superstores that would dwarf their competitors’ facilities. While Home Depot won’t be delivering lumber via drones anytime soon, it’s obvious that Amazon’s amazingly fast fulfillment and delivery system has changed the playing field for everyone. Consumers are now expecting same-day and next-day delivery, and Home Depot has responded by encouraging its suppliers to raise the bar on production schedules to accommodate its important customers, including contractors, builders and professional handymen. Add to that one of the best customer loyalty programs for professionals (Home Depot Pro Xtra) and you can see how tempting the incentive is.

Another innovative customer loyalty program waiting for Home Depot’s regular customers is the Fuel Rewards Program, which allows cents-per-gallon savings that you earn by making purchases with your Home Depot Credit Card – the more you spend, the lower each gallon of gas costs you at participating Shell gas stations.

The Home Depot (R)evolution

Home Depot’s evolution from a brick and mortar behemoth to a streamlined online retailer has been one long, arduous journey, culminating in the One Home Depot experience. It’s a catchy name and sounds like a physical address, One Home Depot, but it represents the complete integration of online and offline resources.

“Developing the One Home Depot experience by bringing the physical and digital worlds together, with the ability to handle the scale of Home Depot, required us to complete a re-platform of our website,” explained CEO Menear. “This re-platform gives us the ability to create differentiated experiences for the customers going forward. At the end of the day, product is why customers come to The Home Depot.”


[White Paper]
[White Paper]