Atlanta, GA, Dec. 27--As the second-largest retailer in the country, Home Depot is in the catbird seat when it comes to dealing with vendors, according to the Atlanta Journal-Constitution.
The popularity of the Atlanta-based company's stores makes it a "must be in" destination for vendors that want access to the ever-growing home improvement market.
But some vendors are upset with a new Home Depot policy that they say gives them less control over their displays in stores and has hurt the level of service they receive.
Under the new policy, introduced last month in the electrical department, Home Depot has hired several companies to monitor and service vendor displays. Vendors pay Home Depot a percentage of their sales for the service. Previously, the vendors maintained their displays themselves or hired a company to do so.
Vendors say the new system provides a revenue stream to Home Depot at their expense.
While they may be unhappy about the change, no one disputes the value of having a presence in the retail giant. In exchange for adhering to Home Depot's policies, suppliers' products get exposed to about 70 percent of U.S. households, said Robert Oxley, president of Robert Oxley Training & Consulting in Aurora, CO.
Suppliers whose products are sold at Home Depot can reap great benefits if they can keep up with demand, Oxley said. "You either go in and you're successful and you live the good life, or you go in and you get in trouble," he said.
Some vendors voiced their concerns about the display maintenance policy earlier this month at a conference in Los Angeles.
Christopher Pickering, retail marketing manager for Cleveland-based Eaton Electrical, said service has declined dramatically since the service initiative, also known as "Project Roadrunner," was started. "They're not providing the same level of service," Pickering said. "It's half of what it was."
Home Depot declined to comment on specific concerns, but the company issued a statement confirming that it had started a pilot program to manage the eight service companies that provide merchandising support for all of its electrical departments across the country.
The company said it is still evaluating whether to expand the program to other departments, but the new program will benefit vendors and shoppers.
"The new system and approach assign the service providers fewer stores to manage and thus allows them to devote significantly more hours to each store, resulting in greater customer service and an enhanced store shopping experience for the customer," Home Depot said.
Home Depot's biggest rival, Lowe's, has implemented a similar program to reduce the number of groups that service its vendor displays.
Vendors also say they are concerned about losing some control over their displays under the new program.
Gary Bracy, a former Home Depot executive, recommended that vendors make the effort to get to know the representatives Home Depot has selected to service their displays. "If you put time into the service agencies, they will perform for you," he said.
But Bracy, who now works for a vendor that sells to Home Depot, acknowledged that the new service initiative may have some kinks. "Anything that starts out new at Home Depot starts out rough," he said.
Despite initial concerns about losing some control of in-store displays, Todd Kaelin of Lutron Electronics said the new service program ultimately will benefit vendors. Lutron, based in Coopersburg, PA, sells lighting control devices such as dimmers at stores across the country.
"Our service at the set has improved," Kaelin said. "I do believe in the system."
