The Home Depot:
Helping Customers Dream with
Web-based Imaging Technology
An IDC Infoimaging Case Study
THE SUBJECT
Headquartered in Atlanta, GA, The Home Depot is the leading home
improvement retailer with over 1,400 stores across North America. Each store
provides customers with 40,000 to 50,000 different products, ranging from
building materials to home improvement supplies and garden supplies. In 2001,
The Home Depot generated over $53.5 billion in revenue.
THE GOAL
To assist customers with redesigning their kitchens and bathrooms, The Home
Depot envisioned the creation of a Web-based imaging solution. This online tool
would allow customers to compare kitchen and bathroom products in a visual
template, and aid in their research and decision processes prior to entering a
local Home Depot store.
THE SOLUTION
The Home Depot Online Kitchen & Bath Design Center, developed and
implemented by Scene7, allows customers to configure kitchens and bathrooms
using “templates.” A customer can choose a template, select a feature within the
template, and change it in seconds to meet their design needs with a few mouse
clicks. Templates, along with a list of selected products, can be saved for later
reference, or printed as a shopping list for a trip to The Home Depot.
Sponsored by
Eastman Kodak Co.
Table of Contents
EXECUTIVE SUMMARY
1
SITUATION ANALYSIS
2
BUSINESS DRIVERS: HELPING CUSTOMERS VISUALIZE THEIR DREAMS
2
FIRST STEPS
3
KEY DECISION POINTS
3
INFOIMAGING SOLUTION OVERVIEW
4
OVERVIEW OF THE ONLINE KITCHEN & BATH DESIGN CENTER
4
KEY COMPONENTS OF HOME DEPOT’S SOLUTION
5
THE HOME DEPOT/SCENE7 I NFOIMAGING SOLUTION AT WORK
6
INFOIMAGING BENEFIT PROFILE
7
IDC ANALYSIS: A LOOK AT BROADER ERETAIL TRENDS
8
THE FUTURE OF INFOIMAGING AT THE HOME DEPOT
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Executive Summary
Situation Analysis
Customers engaged in the remodeling of a kitchen or bathroom are
faced with a daunting array of choices—from colors and brands of
appliances to the overall layout. The difficulty of envisioning the
many options open to a consumer often lengthening—and in some
cases derailing—the in-store purchasing process. As a major provider
of kitchen and bath products, Home Depot sought a Web-based
solution to address this issue.
Business Drivers
Home Depot’s key business driver was to establish a synergistic link
between its Web-based information resources and its brick and mortar
business operations. Specifically, the company sought to create an
interactive, image-based pre-sales experience that would both aid—
and be a catalyst to—its in-store sales. Another key driver was the
desire to use the solution to generate higher levels of volume at the
Home Depot site, thereby strengthening its brand image. The
company also saw the initiative as a way to improve satisfaction.
Technology
Home Depot’s Online Kitchen & Bath Design Center, based on
Scene7’s Infinite Imaging technology, allows customers to change the
color and texture of elements within a kitchen or bathroom image on
Home Depot’s Web site. The system is built around a number of
digital “vignettes,” or pictures of actual kitchens and bathrooms that
represented a wide variety of styles. By mapping the key elements
within each vignette, “intelligent” vignettes were created, allowing
customers to change the look of these elements to their tastes.
Benefit Profile
Home Depot’s online design center benefits customers by providing a
visual platform on which they can experiment and develop their design
preferences. The fact that it’s the company’s most visited site attests to
the high levels of customer satisfaction it has generated. The solution
has also provided operational benefits for Home Depot by shortening
its customers’ purchasing cycle, and by reducing the time customers
spend deliberating with Home Depot associates.
Future
Home Depot plans to enhance its online design center by
incorporating object-oriented image rendering capabilities. This will
enable more accurate perspectives and camera angles, thus improving
customers’ ability to place products anywhere within a virtual room.
Eastman Kodak commissioned IDC to identify and analyze examples of Infoimaging at work in the
marketplace today. This case study, and others in this series, demonstrates how the convergence of
imaging science and information technology is driving growth opportunities for vendors and enabling
companies using Infoimaging to improve their mission-critical processes and better serve their customers.
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Situation Analysis
Imagine your dream kitchen. Perhaps it contains a center island with
dual basin sinks sitting under an array of hanging pots and pans. The
white tile floor reflects the recessed lighting, providing a sharp
contrast to the jet-black double door refrigerator and matching stove.
And the cabinets are, well, hard to describe. In fact, you might want to
change the cabinets, and go for a more natural color and alter the door
style from flat panel to arched raised. But, then, the refrigerator needs
be changed to match the new cabinets’ style, which means the stove
has to go, too. Suddenly, trying to visualize this dream kitchen is
starting to sound like a nightmare. In reality, are you really able to
picture accurately how each of these elements will look together in one
space? If so, can you adequately describe this vision to the sales
associate at the local home improvement store before you have even
seen the available products?
Business Drivers: Helping Customers Visualize Their Dreams
These are challenges that The Home Depot faces on a daily basis.
Considering these challenges, Home Depot’s ecommerce department
began to wonder: what if there was a tool to help you visualize your
dream kitchen (or bathroom, for that matter)? What if this tool could
The Home Depot is the world's largest home improvement
retailer, currently operating 1,437 stores
Source: The Home Depot
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be found online, and it allowed you to alter the elements of your
kitchen with a click of a mouse?
With these questions in mind, The Home Depot set out to create an
online visualization tool that would help its customers “dream” about
their new kitchens or bathrooms. The Home Depot, along with its
product vendors, made this vision a reality by using Scene7’s Infinite
Imaging software. Formally launched in June 2002, the Home Depot
Online Kitchen & Bath Center provides customers with 75 visual
templates of kitchens and bathrooms that can be modified to compare
11,000 products in a variety of combinations.
This case study presents the business challenges that The Home Depot
faced related to facilitating customers’ major design purchases and
how Infoimaging was used to solve these problems. Specifically, this
study discusses The Home Depot’s key decision points, the core value
proposition of the Home Depot Online Kitchen & Bath Design Center,
the functionality and architecture of the solution, the implementation
process, key metrics, and future outlook for this solution.
First Steps
“What we wanted to
accomplish with the
Online Kitchen & Bath
Design Center was to
create an ‘inspiration’
tool, a tool that allowed
our customers to dream,
something that we hadn’t
seen anywhere else in
the marketplace.”
— David Rollo, eBusiness
Manager, The Home Depot
Redesigning an entire kitchen or bathroom is a major project that
requires customers to make decisions that lead to large purchases.
When facing a major purchasing decision, most consumers prefer to
conduct research on products to determine the best choices prior to
making a purchase. As the leading home improvement retailer, The
Home Depot works with numerous customers as they set out to
redesign their kitchens and bathrooms. Over time, Home Depot had
identified an interesting trend: many customers came into their stores
with pages ripped out of magazines to show store associates the
pictures of products that they wanted for their new kitchens and
bathrooms. Home Depot decided that it wanted to find a way to help
customers visualize all of their “dream” components for new kitchens
or bathrooms in one picture. This decision led Home Depot to turn to
Infoimaging technology for a solution.
“The Home Depot Web site has always been a destination for our
customers to gather information about home improvement products,”
said David Rollo, eBusiness Manager for Home Depot’s eCommerce
department. “What we wanted to accomplish with the Online Kitchen
& Bath Design Center was to create an ‘inspiration’ tool, a tool that
allowed our customers to dream, something that we hadn’t seen
anywhere else in the marketplace.”
Key Decision Points
First, Home Depot conducted customer research to confirm its
hypothesis: customers wanted to see a preview of their new kitchen or
bathroom before making a major purchase. Based on this verification,
the home improvement retailer decided to create a research tool that
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customers could access via the Internet to piece together the
components of their new kitchens or bathrooms with photo-realistic
qualities. In selecting the software solution required to make this
vision a reality, Home Depot looked for a combination of strong
technology and an understanding of its customer service issues.
Specific features cited include:
•
•
•
•
breadth of features
ease of integration with Home Depot’s in-store CAD application
to upload customer profiles (for future initiatives)
ability to render images without the use of browser plug-ins such
as Flash
bandwidth efficiency, specifically the ability to download
quickly over 28.8K modem lines
To launch this project, Home Depot also needed the commitment of 25
manufacturers whose products together comprised 11,000 SKUs
(stock-keeping units) for the retailer. Because this tool would allow
customers to mix and match specific products, Home Depot designed
this solution as a venue to advertise manufacturers’ products. This
allowed Home Depot to work with these manufacturers to sponsor the
project in exchange for branded product placements within the tool.
With manufacturer sponsorships, Home Depot had the necessary
financing to initiate the project with Scene7 in June 2001.
Infoimaging Solution Overview
Overview of the Online Kitchen & Bath Design Center
The Home Depot Online Kitchen & Bath Design Center leverages
Scene7’s Infinite Imaging technology to let customers instantly
change the color and texture of elements within a kitchen or bathroom
image on Home Depot’s Web site. This section provides details on
how Home Depot and Scene7 collaborated to implement this
Infoimaging solution and provides an overview of how this solution
works.
Through its manufacturer sponsorships, Home Depot collected JPEG
images of products from manfacturers and forwarded them to Scene7.
For any product that a manufacturer did not have a digital image, the
product was sent directly to Scene7, which then created and stored a
JPEG-format image. Each of these product images were linked to
SKUs within Home Depot stores. Home Depot also provided Scene7
with 75 digital “vignettes,” or pictures of actual kitchens and
bathrooms that represented a wide variety of styles. Scene7 then
mapped each key element within each vignette that could be changed
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Home Depot Kitchen & Bath Design Center Sample Vignettes
Source: The Home Depot, 2002
by a customer (e.g., cabinets, countertops, floors, appliances, etc.) to
create “intelligent vignettes.”
Each intelligent vignette and product image were saved in an SQL
database on Home Depot’s Web servers running Windows NT. Scene7
then installed its rendering software on the Web servers to execute
user commands from the browser window. One challenge that arose
during implementation was the emulation of traffic load to mimic the
actual usage of the Home Depot Web site. “Home Depot’s strong
brand awareness among consumers drives a high volume of traffic to
its site,” said Priscilla Lawrence, Director of Marketing and Business
Development for Scene7. “Although it was difficult to create testing
scenarios that would represent this traffic load, our technical
counterparts at Home Depot were able to put together simulations to
meet these needs during beta testing,” added Lawrence.
Key Components of Home Depot’s Solution
IDC classifies Home Depot’s solution as an example of “Infoimaging”
by virtue of its use of imaging technology to improve the
communication, presentation or interpretation of information. Under
the Infoimaging framework, components used to develop such a
solution fall under three categories:
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•
Devices, which are used to capture, process, or output images
(e.g., scanners, digital cameras, printers, and hand-held devices);
•
Infrastructure (including IT and networking resources) which is
used to store, process and deliver image-based information.
•
Services/Media (including the software, film and services) which
are used to access, analyze and print images.
5
Key Infoimaging Components of the Home Depot Solution
Devices
Infrastructure
Services/Media
Image digitization
outsourced to Scene 7
Home Depot's Internal
intranet infrastructure
Scene 7's
software assets
Kiosks for display
Source: IDC, Home Depot, 2002
To put its solution in place, the majority of Home Depot’s investment
was in the area of Services/Media , reflecting the cost of Scene 7’s
software assets and the associated deployment costs (see chart below).
Key investments in the area of Infrastructure were additional server
hardware on which to deploy and run the solution. The company’s
required investment in Devices was fairly minimal, chiefly the kiosks
required to access the site within Home Depot stores. While the
capture of product images used in the solution involved the use of
digital cameras, these tasks were performed by Scene 7 and (in some
cases) the manufacturers whose products were used on the site.
The Home Depot/Scene7 Infoimaging Solution at Work
When users open the Home Depot Online Kitchen & Bath Design
Center on their browser, they choose a vignette from a visual menu.
These images are served up from Home Depot’s Web server. Within
this vignette, users can change the look of an item by clicking on it in
the vignette’s image. This sends a command to the Web server to send
images of all of the related products to the user’s browser in searchable
groups of 10. For example, if the user clicks on the cabinets in a
vignette, a series of digital images of cabinet styles will appear on the
right side of the screen. The user then clicks on a new cabinet style
from the right menu, which sends a command to the rendering software
on the Web server to tile the digital image of this particular SKU into
the vignette. A moment later, the user sees a photo-realistic rendering
of the new cabinet choice in the existing vignette. The user can also
enlarge the vignette for closer examination.
Since its recent debut in June 2002, this tool has been the hottest area
for the past month on The Home Depot Web site. “When my motherin-law spent all night using the tool during beta testing, I knew we had
a winner,” says Rollo. The Home Depot Online Kitchen & Bath
Design Center creates a list of branded products that users select while
creating their dream kitchen or bathroom. The user can save a
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customized vignette as well as print it out along with the itemized,
branded product list. The user can then bring this list to a local Home
Depot to purchase their selected products with the knowledge of how
each item looks in concert based on the digital image the user created
online.
Infoimaging Benefit Profile
Home Depot’s Online Kitchen & Bath Design Center has delivered
major benefits both for customers as well as internal benefits. For
customers, the most basic benefit of the solution is that it provides a
visual platform on which they can research their options, experiment
and further develop their design preferences. By saving customers
time and effort, the solution has positioned Home Depot as a true
partner in its customers’ kitchen and bath design efforts. Moreover,
the fact that the design center is the company’s most visited site is a
testament to the high levels of customer satisfaction it has generated.
The solution has also provided operational benefits for Home Depot by
shortening its customers’ purchasing cycle, and by reducing the time
customers spend deliberating with Home Depot associates. At the root
of this more efficient interaction is a vast improvement in customers’
Home Depot’s Online Kitchen & Bath Design Center saves time
for both the consumer and the associate.
Source: The Home Depot
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ability to communicate their design vision. Indeed, under a typical
scenario, customers had previously struggled to articulate their plan to
an associate, often relying on such ad hoc “tools” as pages ripped out
of magazines. By providing a rich visual tool, the online design center
streamlines the customer/associate collaboration process. The result:
associates spend less time on an average sale, increasing sales
productivity—while at the same time increasing customer satisfaction.
The online design center has also advanced one of Home Depot’s most
fundamental strategic goals: reinforcing the Home Depot brand and
the message it stands for. In measuring the success of Web-based
services designed to strengthen brand identity, Web site volume
arguably represents the best proxy. For Home Depot, the fact that the
online design solution has emerged as the company’s most heavily
trafficked site is in many ways a testament to its powerful imaging
capabilities as well as its ease of use.
IDC Analysis: A Look at Broader eRetail Trends
In examining Home Depot’s online strategy, a similar examination of
the trends in the broader eRetail market can provide a valuable sense
of perspective. IDC forecasts that overall revenue from eRetail will
reach $40 billion in 2002 and nearly $70 billion in 2005, growing at
an average rate of more than 25 percent. Within the overall market,
online spending in the Home and Garden Products segments (within
which Home Depot is classified) is expected to reach just over $1.5
billion by year-end 2002 and $3.5 billion by 2005. Other major
categories include:
•
consumer electronics (projected to grow from $4.1 billion in 2002
to $6.8 billion in 2005)
•
apparel (projected to grow from $2.6 billion in 2002 to $4.0
billion in 2005)
•
groceries (projected to grow from $2.3 billion in 2002 to $6.5
billion in 2005)
•
prescription drugs, health, and beauty products (projected to grow
from $4 billion in 2002 to $20.1 billion in 2005)
Within all retailer categories, IDC expects growth among multichannel retailers (retailers employing a combination of brick-andmortar, catalog and Web-based channels) to exceed that of “pureplay” e-Retailers. While online-only merchants will increase sales to
$23.6 billion in 2005, multichannel merchants will grow to $45.8
billion in 2005. Within the market as a whole, retail-enhancing
technologies like kiosks, smart shopping assistants, co-shopping, and
online visual tools (such as Home Depot’s solution) will continue to
evolve.
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Among multichannel merchants, IDC expects to see a shift toward
using the Internet for pre-sales activities—to inform customers and
prepare them to make buying decisions. This is especially true for
retailers whose in-store salesforces sell expensive product categories
such as furniture or appliances. Indeed, by 2003, IDC expects onlinevisualization technology to transform the tactile component of online
shopping, with a particularly strong impact on the growth of the
furniture and appliance markets.
The Future of Infoimaging at The Home Depot
Moving forward, Home Depot continues to work with Scene7 on the
next iteration of its online design center. Rollo sees a move toward
object-oriented rendering to improve the placement of new products in
the vignette. This will allow customers to start with an empty virtual
room and add photo-realistic objects into the room with accurate
perspectives and camera angles. This will improve the flexibility of
placing products anywhere within the virtual room to meet customers’
exact layout requirements of their dream kitchens and bathrooms.
Home Depot is also working with its manufacturers to get more
products into the tool to broaden customer choices.
Additional possibilities for the online design center include integration
with Home Depot’s in-store CAD applications to allow associates to
upload customer profiles from the online design center to design rooms
that match a customer’s actual room dimensions. With its continued
collaboration with Scene7, Home Depot hopes to inspire more
customers to make their dreams come true, and make Home Depot’s
vision of increasing major design purchases a reality in the process.
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