Home Depot's Eco Options, Six Months In

Home Depot's Eco Options, Six Months In

In April of this year, home-improvement company Home Depot launched a new program to sell and promote environmentally friendly products at its stores.

Currently showcasing more than 3,000 products that encourage energy efficiency, water conservation, sustainable forestry and more, the Eco Options website now also includes online video tutorials for eco-improvements, in-store and online workshops, a tour of the Eco Options virtual home, and an personal energy audit that shows users how much energy and how many pounds of carbon initiatives they could drop by embracing some energy efficiency techniques.

GreenBiz Executive Editor Joel Makower sat down with Ron Jarvis, the Home Depot's vice president of Environmental Innovation, to talk about how Eco Options got launched, and what progress has been made or lessons learned in the last six months.

Joel Makower: Let's start with a little background about how did Eco Options begin. Who drove that within Home Depot and what was the goal?

Ron Jarvis: Well, I'll look at the predecessor for Eco Options -- was actually a program called E Plus. E Plus was a program that we rolled out in 2000 around the energy crunch, and E Plus was all about saving energy. And with that program we pushed CFLs, of course, programmable thermostats, all the products that we have that save energy. Now when the energy crunch lightened up a little bit, we saw the demand for those products slow down.

So with that, we basically stopped the E Plus program, but as far as promoting the products, buying products that have less of an impact on the environment, making sure that we kept tabs on -- we kept records and tabs basically since 2000, and prior to that as early as 1991, '92, on products that we have inside the company that we considered to be -- have less of an impact on the environment than the standard products.

So whether it's recycled carpet pad, whether it's recyclable carpet, whether it's low BOC paints, all those products we've kept tabs on over the years so when someone called us and said, "I want to build a project that's a green project, or I want to do something for my child's playroom or bedroom. What products do I use?" we had that information here.

Now, as we saw the momentum picking up for products that did have less of an impact on the environment -- and a lot of it was centered around global warming -- we looked at it in Canada. The Canadian Division rolled out the Eco Options first in 2004 and had really good traction, had some really good sales on the products that they rolled out, and we watched the American consumer. And so last year we said it's time for us to really identify the products we have in the store that can be considered to be Eco Options products and make the consumer aware that we have them.

JM: So is this something where you had done the market research and customers were telling you that this is what they wanted?

RJ: No. No, we did notice when we would have town halls with our customers and surveys with our customers and ask them about green products, that they were interested in them, but as far as coming in our stores and asking for the products we didn't see it a lot then. So it wasn't something that marketing reports came back and said, "It's time for you guys to get in;" we had an intuitive feel for marketing and understanding the consumer base, and we felt it was time for us to make these products more visible to the consumer.

JM: So what was driving this from a business perspective? Is this to move more product, or is this to bring people into the store who might not otherwise come, or is it primarily to give a sort of a greener look to all of Home Depot's offerings?

RJ: Well, it's -- first and foremost, it was to satisfy the future demand that we think is gonna be there for the consumers, and since we've been working on these products, we've been carrying products similar to these and some of these products that are Eco Options we have carried for a while, we felt it was time to get these in front of the consumers and educate them on what the benefits of these are. I mean if we're looking at trying to reduce global warming worldwide and we're selling products that can do that, then we owe it to the consumers to get those products in front of them and educate them on what they can do.

JM: So how's it working? Give me a little status report.

RJ: Well, it's -- the ones that we put the most emphasis on, which I think is easier for the consumer to adapt to, are products like programmable thermostats, ceiling fans, CFLs -- compact florescent lighting -- those sales are up. Our sales of CFLs are up 75 percent this year versus last year, and last year they were up about 50 percent. So some tremendous in road on these products that we've made in getting those into the consumer's hands.

One thing that I've been working on this issue as far as environmental side at Home Depot since 2000 is that it has to be a market based solution. You cannot ask the consumer to completely change their lifestyle and to pay more for products than they normally would to just have less of an impact on the environment. And that's one of the things that we've worked with our suppliers for many years; and when I sit down with suppliers, which I do every day, and they say, "all right, here's a product that's gonna replace Product X, but it doesn't perform quite as well and it's 25 percent more in cost," we basically send them back to the drawing board and say, "This isn't gonna work. Come back to us with a product that performs as good or better than the standard product, has less of an impact and is the same cost."

JM: Are there any product categories that aren't fairing that much better now that they're being highlighted as green?

RJ: Well, if you look at some of the products that we have -- insulation, sealing, those type products -- a lot of customers understood the impact of those. I mean just the fact that you're buying caulk and sealing to seal the cracks and crevasses that you might have in your house that are just letting the cold air or hot air in, those products are pretty much status quo. We're not seeing a big lift in those. The products that have a tremendous impact that's almost visible overnight -- when you change out your five most used incandescent bulbs to CFLs, you're gonna save about $60.00 in the first year. Now, the additional cost from an incandescent to five CFLs is about $5.00 total. Consumers understand that, they can do the math, and they're ready to step up to the plate and make a change there because they know that they benefit in two ways. They benefit with less of an impact on the environment, and first and foremost, they save money.

JM: It seems that in the past at least, and I don't think it's changed all that much, that consumers need a lot of education even to make that little calculus that you just described, that they don't really want to pay extra or they don't see the value of a lot of these things, or in some cases they don't trust the fact that it's really green; or even worse, I guess is that if it says it's green, it may be inferior in some other ways. Do you -- are you finding those challenges in getting people to really look at green products as quality and comparable and offering all the other kinds of benefits that conventional counterparts do?

RJ: No, I think that's a great point, and when I think back to 2000, 2001, 2002 when we were occasionally pushing stuff out under what environmental marketing claims that our supplier was bringing to us, if they were bringing it to us saying, "This makes the sky bluer and the grass greener, and it costs 15 percent more," that was almost a no sell overnight. Customers would just -- No. 1, they wouldn't buy into the claim, and No. 2, they would not pay more for it. We're seeing more acceptance today where consumers come in and -- it's like organic milk. Consumers come in and they wouldn't pay $1.50, $2.00 more per gallon of organic milk where today they do because through whether they've educated themselves or they've been educated just through exposure through different types of media, they're understanding some of the impacts of chemicals, understanding the impacts of carbon on the environment, things like that. So it's -- the education of the consumers, it's slow, it's very slow, but we're seeing more and more of it; and the ones that are educated are a pretty easy sale as far as stepping up or stepping over to a product that has less of an impact.

JM: Do you have any idea where that education's coming from?

RJ: It's coming from -- a lot of it's the media. It's coming a lot from the web, a lot of the magazines with the latest -- National Geographic, it's talking headlines is global warming. So every newsstand you go to, they're seeing it more and more. We ourselves are trying to educate the consumers -- I'm not sure if you've seen our website, but our website, it's more about education than it is about selling the product. So if we can educate the consumer, we think they will buy the right product.

JM: And is that at homedepot.com, or is there a special website?

RJ: No, it's homedepot.com, and if you scroll to the bottom of that page, there's a link there that says Eco Options. Click on that link; it'll take you into the whole Eco Options website. And tremendous stuff on there; we've got energy audits, home audits, ten things you can do to make your house greener, really good information. We also try to educate the consumer on what we sell, how much we've sold and the impact of just the products that they've bought through the Home Depot has had on the environment.

JM: Why do you do that?

RJ: I think that consumers get lost in the fact of the numbers, and they say, "I'm just one person out of 300 million, and I can't make a difference." But what we're showing is if they do change their buying habits -- and it's not gonna change your lifestyle. You're not anymore uncomfortable -- you're not uncomfortable if you have a house full of CFLs versus incandescents. You're just having less of a carbon footprint; and that's the education that we're trying to push out there, to say you can make small changes, and the small changes that you've made this year or last year, together collectively as Home Depot customers, this has been the impact.

JM: Let's talk a little bit about how these products become Eco Options products. You were famously quoted in the New York Times of saying that -- last spring, I guess -- that most of what you see today in the green movement is voodoo marketing. I've certainly been watching this space for 20 years; I wrote the book The Green Consumer back in 1989, so I've been watching this as well, and I'm curious from -- as you're at the receiving end of these product claims and pitches from various vendors, how are you able to sort through that and what standards are you using? Even the initial first cut standard that you just take it through -- are there some key questions that you're asking?

RJ: Yes, and it depends on the products. There are key questions that we ask. We basically, if you look at the buckets that we have, the five buckets -- Sustainable Forestry -- and I'll just go through the buckets. Sustainable Forestry, the only certification that we're accepting there is FSC. Now, personally, and I don't know how much you've studied forestry and certification over the past few years, but if you're in North America and you have SFI or CSA, in most cases you are just as sustainable as FSC. But when you're looking outside the borders of North America, you have to have a chain of custody, or otherwise, I'm just not comfortable with where the product comes from. So for us, Sustainable Forestry is FSC-certified wood. So that's in my mind, low-handing fruit. We don't have to go out and reestablish a certification, we don't have to set and standard, we just adopt that one.

Energy Efficiency -- most of the products we have under that bucket are Energy Star, and the reason that we did that is if you look at the amount of time and energy and effort that the EPA has put into establishing that, and they make changes over the years to include or subtract products from the category, so it's kind of being managed itself. There's also some that we put in there that are not Energy Star® products but just by nature like solar lights. We don't ask for different types of certification on solar lights, but just by the fact that it's a solar light, we consider it to be Eco Options. Those are the type as we go through that -

Water Conservation -- low flow toilets, low flow shower heads, there's a water -- what is it, Water Sense group -- that's being formed by the EPA that we will probably adopt some of their standards as they roll it out, but today it's just basically a reduction of water consumption, is what we're looking at there.

JM: So you're managing within each of those to find -- I don't think enough -- I think you're finding enough products; the question is are you finding the good ones and sorting that out?

RJ: Well, it's -- I wish we had more products to bring; and the problem with this is you'll sit down with a supplier who spent months, thousands, maybe millions of dollars of coming up with a product that they think is environmentally friendly. Just yesterday -- not yesterday, but Tuesday morning -- I sat down with our group and we started going through products that had been brought to us for potential Eco Options; and one of those was organic soil. So I started looking into the organic soil, and I said let's look at their marketing claims. It kind of makes sense; you would think organic is good, although we're pushing everybody that's bringing organic products to get the OMRI certification, but do you really need that with soil?

And as we looked at it, I said, "Well, what are the marketing claims?" The said, "Well, the marketing claims are that there was no chemicals used to manufacture this product." I said, "Okay, but there's no chemicals to use to manufacture any soil."

The second one is, "No trees have been cut to manufacture this product," and I said, "But there's usually not trees cut when you're bagging soil."

So little things like that and the company itself thought that they had a home run, that they would be Eco Options overnight, and they were denied. So it's -- they're going back to the drawing board now, and one of the things that I tried to do is to keep the stuff that's just a no-brainer -- like if it's a natural product, somebody comes in with a rock, or a brick, or a stone, or piece of wood, and they say it has to be Eco Options because it's natural, we're not even going down that path. So we don't get into the natural manufacture products versus the non-natural manufacture products as far as replacement goes, but we do look at different types of -- if somebody comes in with a PVC versus a plastic versus a wood paint handle, then we do look at the three of those and say, "Okay, which one has less of an impact on the environment?" Chances are it's the wood paint handle.

RJ: I'd imagine at this point that there are some things that you wish that product -- or that vendors knew before they came to you with their products in hand saying, "Please please, can this be Eco Options?" What's some of the advice that you'd want to give companies in the terms of the way they pitch green, whether it's to you directly or to the customer, that you think would be helpful for everybody?

JM: I think that the most important thing they can do is to do a life cycle analysis of their product and compare that to the like products in their industry. If they do that and then they come to me and say, "Here's the life cycle analysis of my product versus Product X," then that makes my decision much quicker, much easier, and it really gives them a clear understanding of what they're trying to do. We have companies that come to us with for instance bamboo flooring out of China, and they're saying that if you can sell in Atlanta bamboo flooring versus oak or maple flooring, it has less of an impact on the environment. But if you look at what happens in the production, in the shipping and logistics, but shipping bamboo flooring to Atlanta versus maple flooring out of the hills of Georgia, it's a tremendous impact.

Joel Makower is the executive editor of Greener World Media. This article originally appeared on his blog, Two Steps Forward.