Home Depot's acquisition of SRS is the latest evidence that the home improvement giant is laying the groundwork for a multifaceted, digitally-enabled ecosystem.
With B2B services and trade finance all tied together, this deal has the potential to strengthen loyalty among professional contractors and increase revenue streams far beyond individual do-it-yourself customers and homeowners. There is.
As reported this week, Home Depot is spending $18.2 billion to acquire SRS, which acts as a distributor for roofing companies and construction projects. The company has 760 locations, thousands of trucks on the road, and, as its own site notes, has completed more than 100 acquisitions of roofing and construction suppliers and – Strengthening depot fulfillment operations. SRS helps contractors access rebates and promotions through their RoofHub account, which transmits purchase data. SRS also allows contractors to apply for lines of credit and cash on delivery.
Trade finance is one of our main initiatives
Regarding financing, it's worth noting that Home Depot said in its earnings call that it has trade finance and order management capabilities in the pilot development stage.
In Home Depot's latest annual report filed with the Securities and Exchange Commission (SEC) earlier this month, Home Depot is targeting professional customers with a number of initiatives, including “customized online experiences.” “We are making investments,” he added. Differentiated capabilities enable us to better meet the complex purchasing needs of professionals, including expanding supply chain capabilities, providing additional trade credit, expanding showroom space, and enhancing order management systems. ” The contract with SRS is part of these efforts.
The trade finance initiative is timely. PYMNTS Intelligence, which he works with Ingo Money, points out that last year, 73% of contractors were forced to pay out-of-pocket for materials, which he says is 66% of companies that took similar measures in 2022. It has increased since. More than half of subcontractors surveyed said they had to use credit cards to fill cash flow gaps.
Other statistics show that more than 9 out of 10 contractors will offer up to a 5% discount for on-time payment. The funding shortfall is significant, given the fact that data shows that on average, contractors wait 74 days to get paid for their work.
Another PYMNTS Intelligence study found that construction companies are among the most avid users of credit, with 36% using business-based credit and 33% using personal credit. I understand that. A further 25% are considering using online lenders (other than banks) to obtain the financing they need.
