Home Depot Extends Google Cloud Deal

Matt Carey,

Home Depot’s chief information officer, said pushing deeper into the cloud will allow the company to enhance existing digital services and support new ones, like a recently launched tool that generates more accurate cost estimates for kitchen renovation projects.

Cloud computing has become essential to mining sales, website traffic and other data sources for customer insights, and responding to rapidly changing market trends, he added.

Home Depot has already rolled out a number of new cloud-based services this year, all running in Google Cloud. Among them is a rental system for heavy equipment, accessed by a mobile app, from which professional and retail customers can check the availability of trailers, backhoes and excavators at nearby stores and reserve them in advance. Previously, equipment rentals were done in stores or by phone.

Other new capabilities include the use of artificial intelligence and natural-language recognition software to support voice-activated product searches, which can identify groups of items that would be typically needed for specific projects.

On the operational side, the company is using AI-enabled software to predict inventory shortages and pinpoint products that need to be restocked before they run out. Smart software is also being used to keep closer tabs on supply chains, by tracking and analyzing larger amounts of logistics data.

“Right now, we are in hurricane season and have a number of models actively watching weather activity and inventory,” Mr. Carey said. As demand rises in some areas for things like chain saws and generators, “our replenishment teams can quickly identify where we can reroute those types of products to areas in greater need,” he said.

These and other digital projects were kicked into overdrive last year when the company saw its website and mobile app sales soar 86%, driven by homebound shoppers with extra savings, federal stimulus checks and time on their hands eyeing a kitchen or bathroom makeover.

The Atlanta-based company had begun shifting its information-technology systems and customer-service software into the cloud—and out of its own data centers—before the pandemic hit. Currently it uses Google Cloud to host its website and operate a structured enterprise data warehouse. It taps other cloud providers for a range of other services, like “data lakes,” or vast repositories of raw data.

The continuing shift to the cloud, which has provided near limitless computing storage and power, has enabled Home Depot to handle sharp spikes in online traffic, Mr. Carey said. More flexible and robust cloud systems helped IT teams quickly spin out apps designed to meet coronavirus safety guidelines and store restrictions, including services like curbside pickups, he said.

“At any given point during the pandemic, we were responding to more than 600 local regulations across the country,” Mr. Carey said. “Our infrastructure was key to helping us stay nimble.”

In August of last year, as Covid-19 cases were setting new highs, Home Depot posted its strongest quarterly sales growth in nearly 20 years, with May-to-July revenue up 23% to $38.1 billion, compared with the same period in 2019.

That torrid pace has continued into 2021 as the economy reopens. For the quarter ended May 2, the company reported $37.5 billion in sales, a jump of 33% over the same period last year, as profits nearly doubled to $4.15 billion.

Home Depot’s tally of customer transactions—both in-store and online—rose to 447.2 million in the quarter, from 374.8 million a year earlier, the company said.

Carrie Tharp,

vice president of Google Cloud’s retail and consumer unit, said the pandemic supercharged the shift to e-commerce and omnichannel services, spanning everything from websites and online stores, to mobile apps, emails and texts.

“Customer expectations are higher than ever,” Ms. Tharp said. “Shoppers are expecting new contactless ways to make in-store purchases, and personalized, seamless online experiences.” According to Google’s own data, roughly half of consumers say they intend to shop both in stores and online, more than double the pre-pandemic average, Ms. Tharp said.

In a March survey, 58% of roughly 450 retail industry professionals world-wide said the pandemic accelerated the deployment of technology-related services at their company, according to global market research firm Euromonitor International and the National Retail Federation, a trade group. More than 70% said they had increased digital tech spending.

Write to Angus Loten at angus.loten@wsj.com