Wednesday, September 16, 2009

(empo-tymshft) What a difference a millennium makes at Home Depot

In the ideal world, the posts in this "empo-tymshft" series would provide stunning insights from me on the effects of time on various business processes. These stunning insights would be highly original and would result in an Einsteinian change in our way of thinking (without the wild hair on my part). Future generations would then refer to "Bredehoft's Third Principle" and nod knowingly.

But it's a lot of hard work to come up with original insightful thoughts, especially when there are people out there a lot smarter than me.

One such person is B.L. Ochman, who wrote a post that fits into the "empo-tymshft" category - or I guess the "bloch-tymshft" category.

The title of Ochman's post? Home Depot 1999: Forbids Suppliers to Sell Online; 2009: Tweeting For Customer Service.

One of the sources that Ochman uses for her post is an August 11, 1999 edition of the "What's Next Online" newsletter, written by...Ochman herself. Here's part of what she said at the time:

Some web-wise merchants have responded to the Internet's new retail rules retailers by including comparison shopping on their own sites, others put their heads in the sand. Leading the list of slow to get online retailers is Home Depot who, according to the Aug 16 issue of Fortune, recently issued "a Godfather-esque" directive to its suppliers selling goods online. The gist of it was stop selling online or you won't be selling to us.

Ochman then quoted from Home Depot's letter, then added her analysis of why Home Depot was (in 1999) doing this:

What Home Depot really is worried about is its customers going straight to the manufacturer and bypassing Home Depot.

So they put the pressure on Stanley Tools to refrain from selling online.

And certainly, in the short term, such a strategy could work if enforced by a dominant player in the field. But the world is full of innovative companies that emerged as competitors frittered away their competitive advantage. For example, by October 1999, those who wanted to shop online could go to places such as (which may or may not be related to the present website of the same name) and (which eventually became part of But not to

Home Depot, based in Atlanta, said [in September 1999] it will wait until the first half of [2000] to sell its entire catalog on its Web site,, rather than start sooner with selected products.

Lowe's, of Wilkesboro, North Carolina, plans to sell 6,000 to 8,000 home-improvement products on its site [in 2000]....

For the upstart competition, "this is an extremely good break," said Jack Staff, chief Internet economist at market researcher Zona Research in Redwood City, California.

"First-mover status counts for a lot in this game. For every month [Home Depot and Lowe's] delay, they're losing market share."

Well, it's 2009, and Home Depot hasn't disappeared, so they must have done something right. And since we're back in the present, let me quote from Ochman's most recent post:

Dear Big Companies, I've said it before, and I'm saying it again. We don't care about you. We care about what you can do for us, and that's what we want to talk about.

So, whatever happened to Stanley Tools - the company that Home Depot effectively prevented from opening an online store in 1999? Even in 2009, they do not have their own online store. Instead, their website points to online retailers who sell Stanley Tools products. Home Depot is among them.
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