Home Depot is swooping into new territory after realizing it underestimated millennials (HD)

• Home Depot is doubling down on its push into the home decor market.
• Business Insider spoke with merchandising EVP Ted Decker and merchandising SVP Jeanine Huebner about how millennials fit into the company's strategy going forward.
• The Home Depot executives said that five years ago, the company was "concerned" that millennials would largely forgo starter homes altogether.
• But continued research into the generation — with some help from the company's interns — has largely assuaged these worries.
• Visit Business Insider's homepage for more stories.

For a while there, millennials had home-improvement retailers like Home Depot a bit nervous.

Merchandising EVP Ted Decker told Business Insider that, around five years ago, there were ongoing concerns that post-recession woes and declining home ownership would permanently influence the generation's relationship with the home-improvement sector.

A lot of this jitteriness stemmed from research that indicated millennials weren't embarking on the "traditional" path of finishing school, getting married, starting a family, moving to the suburbs, and buying a starter home.

"We were concerned that, wow, maybe this isn't going to happen," Decker said. "There was a lot of discussion about the rental economy; that people are just going to rent the same way we do Airbnbs and Ubers and Zipcars, that it's going to be the same in housing."

But one particular group of millennials ended up steering Home Depot's beliefs about the generation in an entirely different direction. Decker said that five summers ago, the company established an internship cohort consisting of millennials from a diverse range of backgrounds and interests, including business students, computer programmers, designers, and students of the liberal arts.

"We brought them all together and we said, 'All right, you're a millennial. Your job this summer is to tell us what's relevant to you and what's not relevant to you in Home Depot, in-store and online,'" Decker said.

He said the interns' feedback was largely heartening for the company, as many of the millennials had grown up with Home Depot, either through their parents or through the company's long-running workshops for children.

SVP Jeanine Huebner said these workshops "help introduce" the company to both future customers and employees.

"We have over 250 interns here this year, and they're working on different projects," she said. "Many are familiar with Home Depot, having gone to a kids' workshop."

Along with the "kernels of insight" from the millennial interns, continued research over the past five years has also caused Home Depot to pivot its view on millennial preferences.

Read more: Home Depot is charging into Target's home-decor territory, but the home-improvement retailer refuses to copy one of its winning strategies

"The older millennials now are entering that home ownership in similar penetrations, as you know, maybe not as much as the baby boomers, but still much more on the norm than what we were seeing in 2010," Decker said. "The percentage that want to own a home or have an aspiration to own a home, all those are back trending norm."

Decker and Huebner spoke to Business Insider about how the company's latest push into home decor partly stems from the company's interest in continuing to court millennials, as the retailer strives to become the ultimate one-stop shop for customers tackling home improvement projects.

"One of our thoughts for home decor was, 'Why do you want to have them buy all these things, and then log off Home Depot and go to Bed, Bath, and Beyond or Wayfair or whomever else?" Decker said. "The millennials are telling us that they'll buy this product from us. So again, this reinforced why we wanted to add convenience and more of a solution for what's the single biggest generation in the history of America."

Home Depot is also banking on the idea that its revamped home decor and supply options will also appeal to those millennials who have yet to buy a starter home.

"If you start thinking about cleaning supplies or products that finish up your home, it doesn't matter if you rent it or own it, we'll now be able to appeal to that customer," Huebner said.

Decker added that the brand's action-oriented marketing — with its dynamic taglines like "more saving, more doing" — have also helped win over young people.

"You know, we like to think of ourselves as our brand is being very authentic and real," he said. "Those are two of the more powerful words that millennials are looking for in a brand. Home Depot has always been about doing and action. There's work to do with home improvement and we've never sugar coated that it's a project — it just doesn't magically happen."

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