When Jason Brown went looking for a way of using Canadian postal codes to help Home Depot Canada quote home-delivery charges more accurately, he was surprised at how few options he found.
“It was a chore just trying to find companies that even could do this,” said Brown, delivery services manager for the Canadian operation of Atlanta-based The Home Depot Inc. Some digital mapping companies just weren’t interested in contemplating a project of the size Home Depot, he says.
Brown did find one company that was both able and willing to provide what he needed, though: DMTI Spatial Inc. of Markham, Ont.
DMTI offers an assortment of geospatial data products, street map and routing data and geospatial software. According to Rob Sale, account manager for location-based services at DMTI, the company supplies data for the online map services of Google Inc. and MapQuest, and services used by law enforcement agencies and emergency services, as well as serving retailers like Home Depot and other businesses.
All Home Depot’s deliveries originate from one of the company’s stores, rather than from separate distribution centres, Brown explains. The chain charges for deliveries based on distance from the store – typically there is one rate for all deliveries within 15 kilometres of the store, another for 15 to 30 kilometres and another for 30 to 45 kilometres.
The fees only cover part of the cost of the deliveries, Brown added. “We pay about half the cost of home delivery.”
The problem was that it was hard for store staff to give customers the right information about what their deliveries would cost, so the building supplies retailer was not always collecting the amount it should have for longer deliveries. What Brown wanted was a simple system that would give sales staff immediate, consistent information so they could quote the right delivery rate every time.
The solution was for DMTI to use its geographic data to create simple wall charts where Home Depot staff can look up the first three characters of a customer’s postal code and read off a delivery rate. It’s a relatively low-tech solution with more technology under the covers than meets the eye.
DMTI uses geographic data based on postal codes, licensed from Canada Post, to compile the charts Home Depot uses. For each Home Depot store, the mapping company develops a draft chart, Sale explains. DMTI and Home Depot then go over the mockup, sometimes making modifications – for instance, Brown said, Home Depot sometimes stretches its standard 15-, 30- and 45-kilometre zones in rural areas where customers tend to live farther from the nearest store.
In some rural areas, adds Brown, the first three characters of the postal code – known in the business as a forward sorting area – cover too broad an area to be a satisfactory way of defining delivery zones and charges. So in some cases the names of towns have to be used to narrow down the customer’s location.
Brown said his company has been working with DMTI for about two years, though the arrangement was just announced publicly. The DMTI data has made it much easier for Home Depot to quote the right delivery charges, he says. “There’s no ifs, ands or buts – it’s there in black and white.”
Eventually, Brown would like to integrate the DMTI data with Home Depot’s point-of-sale technology, so a store clerk could simply enter a customer’s postal code and see the appropriate delivery charge. The chain’s point-of-sale systems aren’t ready for that yet, he said – “this is more of a long-term goal.”
Geographic data is being used in a growing number of applications, commented Warren Shiau, senior associate at the Strategic Counsel in Toronto. “It certainly seems like a trend for (geographic information systems) to come into wider use.” Besides helping manage deliveries, Shiau said, digital mapping data can help retailers understand customer demographics and choose optimal locations for stores.