Home Depot shift signals rise of merchandisers

The news last week that the interim head of Home Depot Direct will report to the merchandising division instead of the company’s CEO may reflect a broader shift of power from marketers to merchandisers in the retail world.

Home Depot Direct president Harvey Seegers abruptly resigned last week and was replaced by Steve Skinner on an interim basis. Whereas Mr. Seegers reported to Home Depot chairman/CEO Frank Blake, Mr. Skinner will report to the company’s senior vice president of merchandising, Craig Menear.

By integrating the direct division with merchandising, Home Depot aims to gain leverage across all of its consumer channels, a company representative told DM News last week. But the change in reporting structure isn’t a good sign for marketers, according to others.

“Marketers have lost ground to those people who are able to combine product knowledge, merchandising ability and the online effort,” Don Libey, president of consultancy Libey Inc., Des Moines, IA, said of the retail marketplace in general.

Direct marketers typically do not report to merchandisers, but that may be changing as multichannel retailing ascends, said Lois Boyle, president of direct marketing agency J. Schmid & Assoc., Shawnee Mission, KS.

“In most direct marketing companies, the brand passion comes from merchandisers,” Ms. Boyle said. As more retailers understand the importance of having their brand message flow seamlessly across channels, it is the merchandisers whom they are looking to for help, she said.

Home Depot, for example, does a “wonderful job” in its stores and online of delivering on its brand message of “You can do it, we can help,” she said. In its stores, signs promote how-to seminars while end caps have the merchandise and instructions for completing a specific project. Online, the new HomeDepot.com TV feature lets visitors watch a video about how to complete various projects.

Home Depot, Atlanta, has “done such a great job of experiential branding,” Ms. Boyle said. The only place where this is missing is the Home Depot Direct catalog, where the “We can help” part of the brand message gets short shrift, she said.

Another reason for merchandising’s rising star is the importance of new product acquisition in today’s margin-squeezed retail environment, Mr. Libey said.

“How we rationalize our range of product … inventory load and turn factor is responsible for far more net earnings and return on investment than marketers are able to deliver,” he said. Then there’s the simple fact that marketing is a mature field.

“We’ve developed marketing about as far as we can,” Mr. Libey said. “Where we’re lagging is in product and cross-channel opportunities.”

All of this makes merchandising the new management frontier, Mr. Libey said. For example, twice as many of his clients are looking for chief merchandising officers rather than chief marketing officers.

“I am actually seeing for the very first time several very large companies that are multichannel marketers where the next president or CEO will come out of merchandising instead of marketing or finance,” he said.

Maybe Home Depot is on to something if by integrating DM with merchandising it will let the retailer better execute its brand message across all channels, Ms. Boyle said. After all, “brands cannot sit still anymore. They’ve got to be part of the customer’s heart.”

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