Yesterday brought us the story of a potential politically-charged boycott effort about to hit home improvement giant Home Depot (HD). But Home Depot’s new Christmas-focused marketing may help turn the tide. The new holiday campaign is called “The Right Tree,” and it is firing up that spirit of peace on Earth, good will toward men at a time when it may be most needed. Investors got on board, albeit hesitantly, and sent shares up fractionally in Tuesday morning’s trading.
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Home Depot’s new marketing push is focused on its live Christmas tree lots, and focuses on the people who grow those trees, along with their farms. Meanwhile, the centerpiece ad of the campaign focuses on one Christmas tree’s journey from the farm to the Home Depot…and from there, to a family home. The ad will be accompanied by social media content from one of the growers working with Home Depot, Sexton Farms, and will also feature word from lot associates.
The idea is to draw on customers’ emotions to get them to spend a little more than they might have ordinarily. We know that still-high inflation, coupled with some economic uncertainty, is dragging down plans for holiday spending. Inserting some emotional appeals, meanwhile, might loosen a few purse strings a bit, and ameliorate some of the downturn.
Just the Right Time, Too
A tree-heavy Christmas ad campaign might be a good move for Home Depot here, who had a lot of problems of late focused on plant waste. The problem with disposing of plants that are less than cosmetically appealing, as opposed to giving them away or at least composting them, is still plaguing Home Depot.
In fact, we heard about pressure before with vendors pushed to present only perfect plants. But another report suggests the pressure goes deeper than that. One plant vendor noted, “No, we can’t donate them, we don’t want to lose our jobs because we don’t own the product. We also clearance them if we have time so it’s not like we don’t mark them down. Most of us plant vendors love plants and hate to cull them, but this the corporate way.”
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HD stock based on 20 Buys and six Holds assigned in the past three months, as indicated by the graphic below. After an 8.1% loss in its share price over the past year, the average HD price target of $443 per share implies 18.7% upside potential.
