How Home Depot is leveraging the power of the purchase order to meet green goals

What happens when one of the biggest retailers in the US decides that an entire product category needs to move away from fossil fuels in five short years?

The retailer in question is Home Depot, which last June set a deadline of 2028 to transition 85% of its outdoor lawn equipment category to battery-operated. That means the vast majority of leaf blowers, chainsaws, and lawn mowers would have to say goodbye to the combustion engine for good to continue selling in Home Depot.

On the surface, this might sound simple: A major retailer drew a line in the sand, and now manufacturers can either play along or lose a coveted spot on its shelves. In reality, losing that shelf space isn’t a very palatable option for most product makers, as the big-box chain commands nearly one-fifth of the US home improvement market.

But Home Depot didn’t drop the deadline out of nowhere. It came after years of close collaboration with suppliers and not a small amount of pressure. Indeed, the retailer leveraged its size and scale to get companies on board.

“We’ve gone to the suppliers early and said, ‘This is where we’re going to go,’” Ron Jarvis, chief sustainability officer for The Home Depot, told Retail Brew. “If you don’t, you’re not going to be on the shelf, so the power of the purchase order is pretty strong.”

Cutting out the noise: What inspired Home Depot to start throwing its weight around in the lawn equipment category in particular? Jarvis said it started about 15 years ago and initially had very little to do with saving the planet.

The company was getting complaints from residents about the noisiness of its gas-powered lawn equipment—particularly leaf blowers—so it started working with manufacturers to come up with quieter, battery-operated models.

This process then picked up speed in the past five years, as corporate climate goals made moving away from fossil fuels more urgent. Jarvis said the motivation to accelerate the transition came 50% from Home Depot and 50% from suppliers.

“Suppliers are smart enough to know that you innovate or die,” he said.

He added that “you always have one or two laggards,” but the company was “very clear that this was the direction that we were going in” and even told early adopters that they would get preferential treatment.

The biggest sticking point was price, he explained. Home Depot stressed to suppliers that they were not trying to sell green products that were priced like luxuries, and that affordable, quality products for a mass consumer base was ultimately the goal.

Accelerating R&D: For Techtronic Industries Company (TTI)—the exclusive Home Depot supplier behind RYOBI, Milwaukee, and AEG—its battery-powered line-up of lawn equipment was well developed by the time Home Depot started communicating its goal, but the deadline helped spur along further research and development.

“The napkin-to-the-shelf process was sped up when Home Depot decided that their goal was cordless, cordless, cordless,” May Mendoza, assistant marketing manager of public relations at TTI, told Retail Brew. (Cordless is TTI’s term for battery-powered).

Today, the company’s battery-powered Whisper series features most types of lawn equipment. But Bobby Shaw, group leader of RYOBI, said some categories are more developed than others, with lawn mowers being the current laggard. “You’ve got some categories that are well on their way to the majority being cordless and you have other categories, like riding lawn mowers, that are in the infant stages,” he said.

Finger on the scale: Shaw said Home Depot’s size and scale allows suppliers to invest in new technology, knowing they can immediately reach a large customer base.

The flipside of this opportunity is that Home Depot exerts considerable power over not just what gets sold but what actually gets developed and manufactured.

“It’s not just a 1% customer they’re talking to,” said Jarvis. “It is someone who is 90% of their revenue stream, and so they immediately sit down and go, ‘Let’s talk. What are you working on? What can we possibly do to help you meet your goal?’”

Jarvis said he sees this dynamic as a “tremendous opportunity.” He also noted that this isn’t the first time Home Depot has consciously taken steps to use its scale to shift entire product categories prior to its outdoor lawn equipment goal.

He pointed to the company’s role in helping the industry transition to only selling plywood with certification from the Forest Stewardship Council. Initially, the upsell on FSC-certified wood was 30%, but Home Depot kept the retail place low to build up customer demand, effectively subsidizing the suppliers until costs came down.

“We couldn’t have done that if we didn’t have the leverage of volume, size, and determination,” he said.