Home Depot Learns The Best Laid Plans Lesson, In Spanish

Written by Evan Schuman
May 7th, 2009

It’s human nature for business executives to take comfort in the belief that any major failure is the result of insufficient prep or someone having made the wrong assumptions. But Home Depot this month pulled the plug on a Spanish language version of its E-Commerce site after only six months, following an extensive seemingly properly executed series of consumer studies, surveys, focus groups and marketplace analysis.

The original goal was simply to make the site more appealing to Spanish-speaking customers of the $71 billion home improvement chain, who often prefer shopping in Spanish. But when the site launched, it had far fewer visitors than expected and many of the consumers who did visit clicked from other countries.

“Most notably, the visitors were not in a country where we do business,” said Ron DeFeo, Home Depot’s director of corporate communications. “The traffic overall was low so when you add in the fact that half aren’t even going to be customers,” the project quickly started to not make any sense.

But given that the overwhelming majority of the programming and design investment had already been paid, why pull the plug only six months after the site’s November launch? “Web sales are traditionally higher during the holiday season and we didn’t see the site performing to our expectations. The cost to update and maintain the site exceeded the amount of profit generated. The dollars can be used in more effective ways.”

DeFeo then sounded a tune that is becoming quite familiar in these economic crunch months. Joining the ranks of Borders and Canadian Tire, Home Depot has decided to now give unconditional priority to in-store operations. “I’m not saying that we’re not going to revisit (the Web), but our focus now is at the store level. The bulk of our sales are from the stores.”

Accepting for the moment—and given Home Depot’s reputation for thoroughness, it’s a very likely scenario—that the chain did everything that could have reasonably been done before launch, could the site have suffered from an overabundance of “if we build it, they shall come” attitude?


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.