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Home Depot Abandons Security, Smart Home Installations
The Wall Street Journal reports that Home Depot Inc. is abandoning installation initiatives in many categories, including home security, previously offered by ADT.
Home Depot's Smart Home installation business was abolished before it even got off the ground. In 2005, the company hired Best Buy veteran Nancy Kielty as senior merchant for the Smart Home category.
Kielty left the company for Wal-Mart in December 2007 (and now Wal-Mart is getting into the install business.)
According to Kielty's bio, her responsibility at Home Depot was:
Responsible for $1B plus core business categories along with development of new market opportunity, Smart Home. Smart Home is a $50B marketplace opportunity focused on technology solutions for home communications, safety, control, entertainment, and connections.
As she did with Best Buy in 2000 to 2005, Kielty and her team were going to launch a home systems installation business for Home Depot, which would be handled by third-party contractors.
In theory, you would go to Home Depot, stumble across the home-automation aisle, decide you want the stuff, and then arrange for a Home Depot contractor to install it for you.
Professional home systems installers would apparently line up to participate, what with all the business that would come their way from swarms of Home Depot shoppers.
That might work for garage doors, but not for home automation.
People come to Home Depot for garage doors, but not for home control. And the latter category hardly sells at the point-of-purchase.
According to the WSJ, virtually all of Home Depot's services are provided through third parties. The company's revenue from services grew from about $2 billion in 2000 to a peak of $3.8 billion in 2006 before dropping 8% last year to $3.5 billion, according to the newspaper.
The WSJ also reports that former chairman and CEO Robert Nardelli had made growing home services a priority, indicating in 2001 that Home Depot could be the largest carpet installer in the world, given its leadership in the product category. Pest control and lawn care were also considered as service opportunities.
Home Depot now plans to stick with its core audience (do it yourselfers) and its core product categories (traditional home improvement). That means the retailer will "limit its involvement in consumer electronics to 'very, very, very targeted' efforts," according to CEO Frank Blake, as quoted in the WSJ.
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6 Comments (displayed in order by date/time)
We have seen it time and again. The only “contractors” lined up to help the big box stores in the industry are those contractors that can’t make it on their own. Why would I want to go to school, get a license, continue my training to be knbpwn as the HOME DEPOT GUY? Seems if the customer had any smarts about VALUE ADDED he/she would buy from their local alarm dealer. WHen the big box system goes down, where is HOME DEPOT? WHen MY systems go down my customers have my HOME NUMBER TO VENT if need be…..
If you BUY CHEAP you get cheap. If you SELL CHEAP,, you get paid what it is worth. If you do a first class job you deserve to be paid for first class work.
I don’t believe necessarily that people buy installation from Home Depot and big boxes in order to get it cheap (look at their prices…not cheap). I think they just don’t know who REALLY installs this stuff.
Julie you are absolutely right. An EDUCATED CONSUMER is a WISE consumer.
If you want home automation go to the people that do it for a living. The alarm installation company, Systems integrator etc. GO to the manufacturers and ask WHO INSTALLS YOUR PRODUCT, Go to the National Burglar and Fire Alarm Association and ask for a list of licensed ethical contractors. Go to you local building department (Electrical Inspector) and ask for help. Sorry Ill get off my soap box…..
I have to agree with the early poster that the contractors working for BigBox Retailers don’t know what their doing and thus hurt the view casted on the retailer if they want to succeed they need to hire and train there own installers. I would hate it for business, but it would better than what their doing now.
To many new gadgets coming into the market only for them to be axed or discontinue. The cost to automate is expensive and most of these fly by night company dont know how to run wiring the correct way much less do a custom installation. These dealers disappears for lack of business or for a disagreement with the source who hired them to begin with. Stick with the smaller alarm company guys. Check with the Contractors State License Board and Bureua of Security & Investigative Services before you decide to use that company. Ask for proof of insurance and workmans comp. If the job a high dollars, have that company add you as an addition insurance on there insurance just in case. This usally doesnt cost them to add you. If they give you the run around…Dont use them and keep shopping!
I totally agree with this article. I worked with CompUsa’s Digital Living here in Atlanta, I actually had 2 crews under me. One of our biggest problems was the fact that the people heading things, knew nothing about this industry. So there was alot of money spent for nothing every day. The crews had the background, but the guys running things didn’t and that ran it that way. I can say this, that I to this day have 2 builders because of their demise.