Home Depot’s Redbeacon Expands ‘Do-It-for-Me’ Services

Home Depot Inc. (HD), the world’s largest home improvement retailer, is accelerating the national rollout of its online handyman referral service Redbeacon to tap demand from homeowners who don’t want to do fix-it projects themselves.

Redbeacon, which connects consumers with painters, plumbers, carpenters and maids, expanded this week through Home Depot to Oregon, Washington, Idaho, Utah, Montana and Alaska. That puts the service in 11 states as the service pushes nationwide over the next two years, Chief Executive Officer Anthony Rodio said in an interview Wednesday.

Founded by three former Google Inc. (GOOG) employees five years ago, Redbeacon is Home Depot’s third acquisition since 2012 aimed at selling more home-installation projects. While those services account for only 4 percent of the retailer’s revenue, it underpins Home Depot CEO Frank Blake’s push to drive more sales through his roughly 2,000 U.S. stores as rising home prices spur renovation.

“It’s another way for Home Depot to try to attract repeat customers to their stores over Lowe’s,” said Walter Todd, who oversees about $950 million as chief investment officer at Greenwood Capital Associates. The firm owns 43,500 Home Depot shares and 92,000 shares of Lowe’s Cos.

Photographer: Daniel Acker/Bloomberg

For years, Home Depot and Lowe’s, the second-largest home improvement chain, have arranged projects for contractors to install roofs, build decks and remodel kitchens. Close

For years, Home Depot and Lowe’s, the second-largest home improvement chain, have... Read More

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Photographer: Daniel Acker/Bloomberg

For years, Home Depot and Lowe’s, the second-largest home improvement chain, have arranged projects for contractors to install roofs, build decks and remodel kitchens.

Atlanta-based Home Depot bought two other companies in 2012: closely held MeasureComp LLC, a flooring measurement company, and U.S. Home Systems Inc., which refurbishes kitchens and bathrooms.

Pruning Shrubs

For years, Home Depot and Lowe’s, the second-largest home improvement chain, have arranged projects for contractors to install roofs, build decks and remodel kitchens. Those jobs are typically more extensive than services offered by Redbeacon, according to Rodio.

Redbeacon’s jobs range from repairing leaky faucets and shorted light switches to pruning shrubs and painting houses. Cleaning a house in the San Francisco Bay area costs on average $124, according to a price estimator on Redbeacon.com

Foster City, California-based Redbeacon is targeting “do-it-for-me” homeowners, particularly those in their 20s and 30s who “view rearranging their iTunes or downloading the newest version of the iPhone operating system as work around their home,” Rodio, 48, said in a telephone interview from New York.

Home Prices Rise

Consumers are willing to spend more as the value of their homes increase even as rising mortgage rates weigh on home sales, Rodio said. Home prices in 20 U.S. cities rose in the 12 months through July by the most in more than seven years.

Competing with Google, Angie’s List and other online listings of contractors, Redbeacon takes project requests from consumers and collects bids from professionals it has pre-screened, according to Redbeacon’s website. It sends several bids to the consumers and helps schedule the work. Contractors pay a monthly fee of $29.95 for a spot on Redbeacon’s call list, Rodio said.

Redbeacon has no physical presence in Home Depot stores other than signs promoting its service. As customers inquire about projects, Home Depot employees show them Redbeacon’s services on computer terminals and encourage them to download Redbeacon’s mobile app.

Home Depot slipped 0.5 percent to $75.71 at 10:01 a.m. in New York. Before today, the shares advanced 23 percent this year through yesterday compared to a gain of 19 percent by the Standard & Poor’s 500 Index.

To contact the reporter on this story: Chris Burritt in Greensboro at cburritt@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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