ANALYSIS: Client Profile - Home Depot builds a do-it-yourself image. Home Depot is the largest home improvement retailer in the US, but its rise has been challenged by environmental protesters, charges of squeezing out mom-and-pop shops and race discrimin

It isn’t easy building a corporate reputation. Home Depot has emerged as the 800-pound gorilla in the home improvement market, and while a visit to its mammoth stores may be almost as exciting as a trip to Disneyland for customers who fancy home improvement projects, it has had its share of problems along the way.

It isn’t easy building a corporate reputation. Home Depot has emerged as the 800-pound gorilla in the home improvement market, and while a visit to its mammoth stores may be almost as exciting as a trip to Disneyland for customers who fancy home improvement projects, it has had its share of problems along the way.

It isn’t easy building a corporate reputation. Home Depot has

emerged as the 800-pound gorilla in the home improvement market, and

while a visit to its mammoth stores may be almost as exciting as a trip

to Disneyland for customers who fancy home improvement projects, it has

had its share of problems along the way.



Take for instance the battle surrounding Home Depot’s use of wood

products from environmentally sensitive areas. Over the years, activists

have organized protests at Home Depot stores, U-locked their necks to

store shelves that carried endangered wood and held store tours to

inform consumers about items made from old growth lumber and tropical

hardwood. Protesters were silenced in August 1999, when Home Depot

announced that it would stop selling wood from endangered areas by the

end of 2002, but the unwanted press caused Home Depot’s PR department to

step up the company’s profile as an environmental leader.



The negative attention doesn’t seem to have created any roadblocks to

financial success, though. Revenues increased 27% in 1999, from dollars

30.2 billion to dollars 38.4 billion, with profits up a whopping 44% to

dollars 2.3 billion.



Already a ubiquitous presence across the country, the 22-year-old

company also expects to double its number of stores by 2003, from 950 to

1,900.



With stores averaging 130,000 square feet, that’s a lot of aluminum

siding for sale.



In October 1999, Home Depot joined the big boys on the Dow Jones

Industrial Average. It was also a top-10 finisher overall in Fortune

magazine’s latest ’Most Admired’ list and has ranked number one in its

category (specialty retailers) for seven consecutive years.





Mores stores, more PR pressure



As Home Depot has grown, the company has placed an increased emphasis on

PR. ’I’ve spent a lot of time helping people at Home Depot understand

the value PR has to a company of our size,’ says VP of PR Carol

Schumacher.



’By showing the value of what we do, it obviously puts more pressure on

us to really try and handle the needs of the stores and the media.’



Handling the needs of the media is one thing Home Depot’s fast-acting PR

department seems to do well. ’I’ve found that they’re really

professional and respond very quickly,’ says Forbes senior editor Bruce

Upbin, who witnessed Home Depot’s PR machine in action several months

ago while in the car with PR manager Don Harrison.



A Miami TV station had been tipped off that some of the company’s

Christmas trees were believed to be infested with ticks. As the two sat

in rush hour traffic, Harrison called several store managers, the tree

grower and the Florida Agriculture Extension, and determined that only

trees in one store were infested and that the bugs were aphids. Harrison

was given the choice of fumigating the trees or burning them, and he

chose to burn 2,000 trees. Harrison quickly dictated a media advisory

over the phone, and the story died down the next day.



Home Depot’s PR department has also doubled in size since Schumacher

joined the company roughly a year and a half ago from Edelman. ’(PR) has

a more proactive role than in the past,’ says Schumacher. ’The staff was

smaller than it is now and given that, the department was very much

reactive.’



One example of proactive PR is the stepped up efforts to position CEO

Arthur Blank as a visionary by securing more speaking engagements and

making him more accessible to the media. This has started to pay off -

Blank was named one of the top 25 CEOs in Business Week in 1999 and has

made appearances on CNBC and CNNfn.



Despite this effort to increase Blank’s availability, Business Week

marketing editor Ellen Neuberger says that Home Depot’s executives are

’somewhere in the middle’ in terms of accessibility. She adds that she’s

had better luck with Home Depot than its competitors, and likes that

Home Depot doesn’t give a ’one-size-fits-all PR response.’



Home Depot’s PR structure continues to be driven by geography, but the

number of regional PR managers on staff has increased. There were six

when Schumacher joined the company and there are 10 today. This allows

PR managers (who are required to work in the stores periodically so they

will understand business from the inside) to oversee a smaller

geographic area. Schumacher also integrated the speaker’s bureau into

the PR department, rather than the internal communications department,

and added a layer of assistant PR managers.



Rather than have internal PR, public affairs and community relations

fall under the umbrella of PR, those division heads, as well as

Schumacher, report to Home Depot senior VP of marketing Dick Hammill,

since each function is seen as one facet of marketing. ’Reporting isn’t

as much of an issue as access,’ says Schumacher, who says that she has

easy access to the CEO.



While Home Depot previously relied on PR agencies only for projects, the

company bulked up its agency commitment a year ago by adding Edelman for

national media relations, reputation management, corporate image

building, store openings, product launches and sports marketing to

support its Olympic program and its sponsorship of NASCAR driver Tony

Stewart.



GCI Group became the agency of record for EXPO Design Centers, and is

charged with creating brand awareness locally and nationwide for the

centers, as well as the company’s design and decor products. According

to GCI EVP Susan Storey, the agency is attempting to create awareness

that the company is ’more than lumber and nails.’





Mom-and-pop killers?



While Home Depot may have silenced environmental groups with its

decision to stop selling wood from endangered areas, the PR team faces

other battles.



For instance, the company has been portrayed as a killer of small

mom-and-pop hardware shops, which precipitated numerous real estate

battles.



But Schumacher claims that there are cases where Home Depot’s presence

has proved advantageous to small shops. ’We help make people more aware

of home improvement projects through clinic programs,’ says Schumacher,

adding that this has meant added business for smaller retailers.



Home Depot has also had to deal with numerous race discrimination

lawsuits, which are handled on a local level. ’Anything like that

definitely affects perception,’ says Schumacher. ’It’s important that we

handle it in a proper way and communicate the right messages: in

general, the company believes in making everyone feel welcome - not just

employees, but customers.’



These hindrances aside, the PR department doesn’t seem to have a problem

measuring its results. For instance, Schumacher says that the company

can immediately measure PR results when it’s involved in a real estate

battle, because if they’re successful, the store will get approved. With

950 stores on the way within the next three years, Home Depot’s PR

department will certainly have a lot of battles ahead. Luckily, its PR

tool kit is better stocked than most.





HOME DEPOT



PR chief: Carol Schumacher, VP of PR



PR managers: John Simley, Don Harrison, Mandy Holton, Tom Gray, David

Day, Melissa Watkins, Jerry Shields, Dave Henry



Internal communications: Rob Hallam, director of internal

communications



Public affairs: Gene Ormond, VP of government relations



Community relations: Suzanne Apple, VP of community affairs



External agencies: Edelman for national media relations, GCI for EXPO

Design Centers, plus a network of 25 local agencies in US markets and

one each in Chile and Argentina.



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