First Phone permits employees to call Home

Home Depot's First Phone is a Swiss army knife for employees, multi-use technology that enables people to check stock and answer customers' questions from the home improvement retailer's aisles.

The hand-held device functions as a phone, walkie-talkie and mobile cash register, in addition to an inventory management and business analytics tool, and is a far cry from Home Depot's alternate technology offering. In the past, the company had between three and five computers on carts that were pushed through the aisles, and employees carried walkie-talkies in their orange apron pockets.

The previously tech-shy Atlanta retailer now is embracing mobility and using it to enhance customer service.

"That has been a tremendous benefit in speeding up checkout," said Marvin Ellison, Home Depot executive vice president of U.S. Stores, of the First Phone in the company's first-quarter earnings call. "We're going to continue to put a big emphasis on it this year."

Home Depot spent $64 million to develop the technology and purchase about 30,000 devices; it now has 15 in each of its U.S. stores.

The First Phone looks like an amped-up Blackberry device, with a full keyboard and a screen that measures four inches diagonally. Employees use a stylus to tap their selections and can hook up a printer or a card scanner to print labels from the aisle, or check out customers when the lines get long. The device also has a laser scanner.

"It's more efficient; there's more time for helping the customer," said Mike Guhl, Home Depot vice president of store and credit systems. "They have all the information at their fingertips."

The ability to check out customers away from the register is one of the phone's biggest benefits. During a busy season, Guhl said, shoppers whocome in for bags of mulch from the garden center could have their merchandise loaded into a trunk and pay without ever leaving the car. Employees use the technology to break up long lines and get shoppers out the door.

Other retailers have mobile checkout technologies, but none seem as advanced as Home Depot's, said Wayne Hood, managing director for equity research for BMO Capital Markets. He said the investment has paid off in improved customer service, with employees able to access more information when approached with questions. The First Phone will enable an employee to look up stock inventories, stock location in the store, shipment schedules and neighboring store inventories, in addition to price and sales information.

"It exponentially helps the service levels," Hood said. "It's just a better experience."

The company views the First Phone as a platform for more technologies, and Guhl said a camera in the device will be activated so associates can read the QR ("quick response") codes that are proliferating in stores. The key to the phone's success, Hood said, is Home Depot's ability to add more bolt-on uses.

The First Phone increases the efficiency of existing workers by giving them access to more data, said Colin McGranahan, Sanford Bernstein research analyst. That means employees give better answers to customers, and give them more quickly.

McGranahan said the device has added to the rivalry between Home Depot and Lowe's, its chief competitor.

"It is a tool that's helping them drive sales relative to their competition," he said.

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