RER recently spoke with Richard Porter, vice president of Home Depot Rental about the effects of COVID-19, the professionalization of Home Depot Rental’s service, its growth in providing larger equipment for pros, the training of its rental associates, and more.
RER: How was 2020 for Home Depot Rental and how did COVID-19 affect it?
Porter: Everyone around the world has been affected in some way by the emergence of COVID 19 earlier this year. And it seems like when we first started to feel the full weight of the pandemic in March, everything slowed down for a bit and then began towards a new normal. What was interesting for us at Home Depot was that a lot of people started working from home, and a lot of people started to spend a lot more time in their homes and decided to invest in projects they had been putting off.
We saw a lot of DIY activities early on and then it started to be small pros and medium-sized pros and from those early days in March those activities have been strong and at least maintaining those levels of activities. And so rental has been there to support all those projects with our tools and equipment and trucks and trailers that our DIY and pro customers need to get those jobs done.
So now we turn our eyes to 2021 and beyond. We’re continuing to invest in our fleet and we’re continuing to invest in our associates and we’re also investing in customer solutions that are going to improve the customer experience and help doers get more done, as we like to say around here.
Did you find customers mostly kind of shut down in the early days of the pandemic and then started getting geared back up again?
I could not quote to you with any accuracy how many people actually shut down. I do think for a period of time we all collectively paused and tried to learn what was happening around us so we could all operate safely going forward, and once we did and once that information started to disseminate, we saw the business come back almost immediately.
Now it feels a bit more normal?
It does, and as you know, it’s a new normal. We continue to really prioritize a safe environment for our customers, so social distancing and masks and PPE. We’re really trying to provide a more safe experience for our customers because we know it’s important to do so.
Overall is Home Depot Rental getting into larger equipment these days?
It’s been an evolution, I would say. Home Depot has been engaged in rental for 25 years and in the early days of rental we were trying to empower those DIY customers that were coming into Home Depot to really do the projects that they wanted to try in a lot of cases for the first time. So the emphasis was really on what can we provide, how can we encourage customers that they have the ability to do those projects in a safe way, and to do it themselves. And in that way I think we had influence on the rental market, expanding peoples’ confidence in their own abilities to take on projects where they might not have the tools at home and we can rent those tools to them. Over the course of the time that has begun to expand into more and more pro customers and those pros have told us what they want. And we have a robust pro community that depends upon the convenience of Home Depot for their businesses.
And over the course of time they began telling us “if you carry this tool or this piece of equipment, it would my life easier because I could pick up the products and I could pick up the tools and the piece of equipment all in one spot, take it to my jobsite, and be done.”
So we began to expand into the pro categories and of course with the acquisition of Compact Power Equipment Rentals in 2017, we were more able to connect with the pros through larger equipment classes and categories that they had previously needed to rent through other rental companies. And that was very successful. People think of our evolution in three stages: First product tools for DIYers; second, larger towable equipment that they could put in the parking lot and your average F-150s could pull; and now larger equipment that larger pros are telling us that they need and they want in order to keep their business going with Home Depot Rental.
Compact Power Equipment Rental is no longer an entity?
Correct. It was acquired by Home Depot in August 2017 and integrated into what was previously Home Depot Tool Rental and now we changed the name of the combined business into Home Depot Rental. Because its not just about renting tools - you can rent tools, you can get a truck, you can get a moving van, and you can get towable equipment or large equipment, you can get an 80-foot boom lift. We inherited with that acquisition a number of the pro shops across the U.S. and Canada and the majority of the equipment that is found on the lots of Home Depot stores across the United States and Canada.
Do you have delivery vehicles available at most of your rental departments?
Yes, we sure do. We can deliver a piece of equipment from most of our locations across the United States and that has been a very fast-growing part of our business. We typically have about a one-hour radius around a store but we’ve been expanding that in some geographic locations.
The program has come a long way from the early days of Home Depot Rental.
You’re right, it’s been a fantastic journey. We have so many pros who depend upon Home Depot day in and day out to provide products and services that they need to accomplish their jobs and to be successful in their careers and to put food on the table for their families and so we really see it as a privilege to help them by providing the tools and equipment that they need and we’ve been listening to those pros. And they have informed us, “Hey, I’m a painter and I really need this aerial equipment and if you had it I would rent it on a regular basis.”
We take that as well as a significant amount of research as to each individual geographic location and determine whether we feel like that category of equipment would do well. There are some obvious geographic influences that determine what mix you’re carrying in a specific store. For a simple example I would say you’re going see a lot more tile saws in South Florida than you’ll see anywhere else within the country because of the use of tile in that geographic area. Or the basic composition of soil in an area determines what people need. Aside from that, each store gets input from the customers that shop there and the fleet customizes according to what the customers need over the course of time.
You’ve set up operations facilities, tell me about those.
We have two open right now, one is outside of New Orleans and one is outside of L.A. New Orleans was opened in the fourth quarter of 2019 and L.A. in the second quarter of 2020. As we were saying, 2020 has been a challenging year but both of those locations have continued to grow and they really provide some strategic infrastructure for us. Our retail stores are where all of our rental centers are and those stores need to grow and add customers every year. And as we’ve grown, we’ve added a great number of categories of equipment in the parking lots of those stores as well as “Load and Go.”
We used to have only the one traditional “load and go” F-250 traditional offerings, we now have four or five different delivery options in the parking lot, so now we are starting to have space constraints. As we get into the larger categories of equipment, we have very specific functional needs from a preventive maintenance and a repair capacity that the operations facilities provide along with additional capacity for delivering equipment.
Are there a lot more customers reserving as opposed to just walking in?
We are currently working on a reservation project for our customers, and we know that our customers are looking to shop in more and more convenient ways. They want a variety of options in the retail part of our business and we want to provide them a variety of options on the rental side of our business and so that is a clear focus for us right now and into 2021.
If I wanted an 80-foot boomlift, I might not expect to just walk into the nearest Home Depot and get one, right?
If you wanted a large piece of equipment, you could call our call center and they would find one for you and set up a delivery for you. So it depends on the category of equipment as to whether it’s going to be on a lot or delivery only. It’s all about convenience for the customer, whether it’s a professional contractor or a consumer and so that’s where the team is always working to try to find the best way to support them and make it a convenient experience.
How many rental centers do you have now?
We have about 2,200 store locations in the United States and Canada and rental presence in approximately half of those. I say approximately because that number is changing every day. Our customers, particularly our pro customers have made it clear to us that geographical proximity is important for them because it means convenience and for a busy pro or busy DIYer, time is money. With 2200 stores in the U.S. and Canada, there’s a store within 10 miles of 90 percent of the population. Over the course of time we will look at every opportunity that makes sense based on the community and what our customers are telling us, we’ll provide rental presence to more locations.
Within 10 miles, would that be just in the U.S., as opposed to Canada where you have much bigger distances and not as many stores?
Yes.
Who were you with before you came to Home Depot?
I was the COO of Compact Power Equipment Rental.
Is that where you got started in rental?
I spent 14 years with Enterprise in the vehicle and truck rental business and helped expand that in Canada and then came to the Compact Power Equipment Rental business and helped grow that from 2011 until the acquisition in 2017.
Who are some of the other leading executives in the Home Depot Rental team?
I’m the vice president of Home Depot Rental and I report to Ann Marie Campbell, who is EVP of store operations for the United States, Canada and Mexico. Tony English is our merchant in charge of acquiring tools and equipment for the company. Tim Dugan runs our large equipment business, so everything that’s towable or being delivered rolls up under Tim Dugan. Anika Wharton handles our in-store customer experience. I also run the returns business, so every time a customer across the United States returns something to Home Depot, if it doesn’t go back on the shelf it goes to one of three, soon four, return facilities where if it’s to be returned to a vendor, re-sold to the market or recycled in some way in an attempt to keep it out of a landfill. So I run that business, I run Home Depot Equipment Services, all of the equipment that faces customers inside our U.S. and Canadian stores, that needs to be turned in and repaired and maintained and I have a team of people that run that. As well as a customer-facing repair business, so four different businesses.
Are the people staffing rental departments, specifically trained in rental, to work in the rental department?
That’s been a specific focus of our attention. We know that part of the customer value proposition is in having competent technicians or sales associates who can engage the customer, answer their questions competently and make sure they are being matched for the right tool or equipment to ensure the success of the job they are working on. We have worked very hard to standardize training for our associates who work in the rental centers as well as to bring some of the industry experienced folks who came with through the Compact Power Equipment Rental acquisition to the locations to help train our rental associates.
Each location has at least one onsite technician and I can tell you that we have the very technicians in the industry that have been with us a long time and have significant experience. We also have associates who engage with the customers, get to know those customers, particularly those who are coming in on a regular basis, really try and provide the best experience that that customer is looking for. We have some customers who are very experienced and their focus is to get in and get out in a hurry and we have others who are looking for that competent advice and we are focusing on providing that training across all of our locations.
As we get closer to normal, do you expect to continue to add more rental departments in 2021?
We continue to see steady business and we are looking like everyone to whatever the new normal is going to be beyond the next six to eight months. We remain confident in our role providing the types of tools and equipment that our customers have come to depend on us for. We are continuing to invest in our fleet; we are continuing to invest in new locations as we look towards the future.
