Home Depot’s SRS Deal Boosts B2B and Trade Finance Strategy

The Home Depot's acquisition of SRS is the latest evidence that the home improvement giant is laying the foundation for a multi-sided, digitally enabled ecosystem — as intended.

By being tied together with B2B services and trade finance, the deal could strengthen loyalty among professional contractors, boosting revenue streams that extend beyond the scope of individual, do-it-yourself customers and homeowners.

As reported this week, Home Depot is spending $18.2 billion to buy SRS, which serves 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 closed more than 100. Acquisition of roofing and building suppliers, which strengthens Home Depot's fulfillment operations. SRS helps contractors access discounts and promotions through their RoofHub account, which in turn stores purchasing data. SRS also enables contractors to open credit lines and cash on delivery applications.

Major Initiatives in Trade Financing

In terms of financing, it should be noted here that Home Depot said during the earnings call that it has trade finance and order management functions in the pilot development stage.

at home depot latest annual report In a filing with the Securities and Exchange Commission (SEC) earlier this month, The Home Depot detailed how it targets its professional customers with a number of initiatives, including a “customized online experience” and added that “we are offering a range of different capabilities.” are investing in SRS that will help us better meet the complex procurement needs of our professionals, including expanded supply chain capabilities, additional trade credit offerings, more showroom space and an advanced order management system. The SRS deal fits into those initiatives. .

Trade finance initiatives are timely. PYMNTS Intelligence in collaboration with Ingo Money found that 73% of contractors were forced to pay out of pocket for materials last year, up from 66% of firms who will do so in 2022. More than half of subcontractors surveyed said they had to use credit cards to bridge cash flow gaps.

And in other data, more than 9 in 10 contractors said they would offer a discount of up to 5% if they could be paid on time. The cash crunch is acute, given the fact that data also shows that contractors have to wait an average of 74 days to be paid for a job.

Separate research from PYMNTS Intelligence states that construction companies are among the most enthusiastic users of credit as 36% use business-source credit and 33% use personal credit sources. And another 25% are considering using online lenders (other than banks) to access the capital they need.