Why This Matters to Distributors: Home Depot is putting artificial intelligence directly into the way professional contractors find products, build material lists, and make purchases. Combined with its expansion through SRS Distribution and GMS, the tools give Home Depot another way to compete with wholesale distributors for Pro customers.
The Home Depot Inc. is expanding its use of artificial intelligence to help professional contractors find products, plan projects, and make purchases as the retailer builds a larger business serving the Pro market.
Home Depot executives detailed the strategy during the company’s fiscal second-quarter earnings call Aug. 18, highlighting its Magic Apron conversational AI tool and an AI-powered material list builder aimed at professional customers.
The tools are significant for distributors because Home Depot is applying AI directly to areas where distributors traditionally compete on service: product knowledge, project planning, quoting, and order building.
Magic Apron, which began as an online tool, is now available to customers and employees in stores, said Ann-Marie Campbell, senior executive vice president at Home Depot.
The application can answer questions about products and projects and help users quickly locate merchandise inside a store.
“Customer feedback has been incredibly positive,” Campbell said.
Home Depot also is making Magic Apron more specific to individual stores. Rather than providing general product information, the tool is being developed to understand the location and available inventory of the store where a customer is shopping.
An executive identified as Jordan on the earnings call said Magic Apron now handles millions of questions each month, with usage continuing to increase.
Home Depot also reported strong use of its mobile app. The app was the company’s fastest-growing digital channel during the quarter, helped by increased traffic and purchases. Home Depot plans another app update during the second half of the year.
Online comparable sales increased 11% during the quarter, marking the fifth consecutive quarter of double-digit online growth.
AI Moves Into Pro Purchasing
Home Depot also is using AI specifically to make purchasing easier for professional customers.
The retailer said professional customers are using the company’s AI-powered material list builder to assemble project requirements and make purchases.
“We are also seeing Pros build material lists and purchase more with the use of our AI-powered material list builder,” the company said.
Home Depot tied the tool to growth in its business-to-business digital operations and said it continues to improve search and mobile capabilities for professional customers.
The material list builder puts AI into a process that distributors frequently handle through sales representatives, inside sales teams, counter employees, and traditional e-commerce systems.
Instead of requiring a contractor to identify and enter every product individually, AI can help turn project requirements into a list of products that can then be purchased.
That potentially reduces the time required to move from planning a job to placing an order.
SRS and GMS Broaden the Pro Strategy
Home Depot’s AI investments are part of a larger effort to capture more spending from professional contractors.
The company also highlighted QuoteCenter, its digital quoting and ordering platform for Pros. Home Depot said QuoteCenter facilitated sales at 90% of its stores during the past 12 months.
Home Depot’s acquisitions of SRS Distribution and GMS have significantly expanded the product assortment and distribution capabilities it can bring to professional customers.
Campbell said the broader catalogs from SRS and GMS, combined with Home Depot’s digital tools, are strengthening its relationships with Pros.
Pro sales increased during the quarter and performed better than the company’s do-it-yourself business.
The combination is important for wholesale distributors.
Home Depot is no longer competing for professional customers primarily through its stores and website. It is combining physical locations, specialized distribution businesses, expanded product assortments, delivery capabilities and digital tools intended to make it easier for contractors to buy across the organization.
AI is becoming another part of that strategy.
A New Competitive Test for Distributors
Home Depot’s approach shows how AI can be used for more than reducing internal costs.
The retailer is putting the technology directly into product discovery, project planning and purchasing — areas where distributors have traditionally relied on knowledgeable employees and long-standing customer relationships.
That creates a more immediate competitive question for distributors.
A contractor who can describe a project, generate a material list, find available products, and move toward an order through a single digital system may have less reason to call a salesperson or visit a counter for routine purchases.
That does not eliminate the distributor’s advantage in technical expertise, specialized products, or complex projects. But it raises expectations for how quickly and easily customers should be able to complete everyday work.
Home Depot’s size gives it more resources to develop and deploy AI across thousands of locations. The underlying strategy, however, is relevant to distributors of all sizes: use technology to remove steps between identifying what a customer needs and completing the order.
For distributors still relying heavily on manual quoting, static online catalogs or poorly structured product data, the competitive gap could widen as Home Depot puts AI deeper into the contractor purchasing process.
Home Depot said it plans to continue developing the store-specific version of Magic Apron and improving its app during the second half of the year.
The direction is clear. Home Depot is using AI not as a separate technology experiment, but as another tool to make it easier for professional customers to find products, plan jobs and buy more from the company.
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