Tuesday, September 30, 2008

CMOs & Marketing Accountability - A Look at Home Depot

"Home Depot delivers on its brand promise," announced Liz Miller, Vice President at the CMO Council, yesterday upon releasing the results of a Council survey to gauge the consistency of 25 brands across six touchpoints. In today's Brandweek article Miller goes on to say: “The Home Depot may have struggled with its earnings this year, but don't blame its marketing.” Why the heck not?

These CMOs are clearly ignoring what customers are telling us with their feet and their wallets as Home Depot's comp store sales are down more than their competitors' so far this year. There are shortcomings in the Home Depot customer experience and there is a gap between Home Depot’s messaging and reality. Consistently delivering messaging across touchpoints should not be rewarded if it’s consistently the WRONG messaging. And how do we judge whether it’s right or wrong? By measuring how much that messaging contributes to getting the right people (customers and employees) in the store and to making the cash register ring.

In our research with home improvement customers earlier this year, we found that Home Depot’s positioning is not credible. Their slogan “You Can Do It, We Can Help” resonates conceptually, but Home Depot does not deliver. Customers go to Home Depot for two reasons only: Selection and Price. The size of its stores makes it hard to find employees, and that contradicts the notion of “help.” The sky-high racking of inventory out of reach flies in the face of self service and suggests that maybe customers really can’t do it themselves.

In fact, the company seems to recognize the disconnect, even if the CMO Council doesn’t. Earlier this week, HD announced a move that could eventually change its format from cavernous warehouses to shoppable stores. The Atlanta Home Journal reported Sunday that HD is investing over $300 million in regional distribution centers and systems to take inventory out of the stores and lower working capital requirements across the business.

While clearly being undertaken for cost savings (they anticipate freeing up $1.5 billion in working capital), the implications for store design and the customer experience are significant. Meanwhile, the CMO Council might want to reconsider what it means for a brand to deliver on its promise.

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