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Home Depot opens third direct-fulfillment center as next step in online distribution strategy

1.6-million-square-foot Ohio facility to support two-day ground deliveries of virtually all online orders.

Mark Solomon
By Mark SolomonSep 18, 2015
Mark Solomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
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The Home Depot Inc. said today it has opened its third direct-fulfillment center to support its e-commerce ordering and delivery strategy, bringing to 3.6 million the amount of square feet of DC space to handle online sales and fulfillment.

The new location, in Troy Township, Ohio, near Toledo, has 1.6 million square feet, making it the largest of the three facilities. Home Depot's Locust Grove, Ga., location has 1.1 million square feet, and its Perris, Calif., center has 900,000 square feet. Both of those facilities opened last year. Home Depot has no near-term plans to build more large-scale centers of this type, said Stephen Holmes, a spokesman for the Atlanta-based home improvement giant.

With the third facility operational, Home Depot said it can now deliver 90 percent of all online orders within two days using ground parcel services. Online sales accounted for about 5 percent of the home improvement giant's $24.8 billion in revenue during its fiscal-2015 second quarter. That represents a 25 percent year-over-year increase, according to Holmes.

Holmes said most of the company's online orders are shipped directly from the fulfillment center to residences or business. However, some orders are shipped to stores for customer pickup, he added.

As part of what it calls its "interconnected" retail strategy, Home Depot is testing a delivery program to ship online orders from its stores to residences and job sites. The initiative will enable online users to order goods and specify a narrow time window for their deliveries. The product will then be pulled from store inventory, loaded on one of the company's vehicles, and delivered to the end customer.

Holmes said the three direct-fulfillment centers do not support the "Buy Online Deliver From Store" concept.

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