DISTRIBUTORS/CO-OPS

Ace continues splash in paint department

BY Ken Clark

Orlando, Fla. — First came a roll out of Clark & Kensington private label paint. Next came a blockbuster deal with Valspar. And now comes the introduction and unveiling of the Paint Studio, the new brand for Ace Hardware’s self-described “Paint Reinvention” program.

It’s all part of Ace Hardware’s efforts to get relevant and make noise in the retail paint arena, said John Surane, senior VP merchandising, marketing and sales.

“We are going to launch the Paint Studio across the nation in May 2014 in a very big way,” Surane told the General Session audience during the Ace Hardware Fall Convention & Exhibits here at the Orange County Convention Center.

“We’re not interested in being a small player, and being less relevant than the other guys,” Surane said.

In the next seven months Ace is hoping to bring the Paint Studio format to some 3,000 stores. 

Market share has moved from about 4% is about 6.4%, “but we’re just getting warmed up.” Grabbing paint business market share becomes more difficult as the co-op moves closer to its goal of 10%.  

With Valspar’s support, the Ace paint team is fueling its paint store makeover with $75 million investment in stores to launch the paint studio. 

Surane said it won’t be easy. “There’s going to be problems and issues, but you have a support team that’s going to help you through those,” he said.

The Paint Studio is branded with a four-sided overhead sign that brands the store within the store as “the Paint Studio” and the tagline “dream in color.”

It also included 8-foot color displays of Clark + Kensington on one side, and Valspar on the other. A center gondola endcap serves up promotional graphics and an optional video screen.

Ace has collected 2,375 completed agreement forms with retailers to start the process toward the store-remodeling program, Surane said.

Ace says it will spend $25 million just in paint in 2014 beginning in May. “I’m pretty sure we’re going to reach a lot of customers,” he said.

 

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Venhuizen’s rule: no standing still

BY Ken Clark

Orlando, Fla. — Ace Hardware CEO John Venhuizen took the stage in Orlando during the co-ops Fall Convention and energetically spelled out reasons for Ace stores to be optimistic. He also declared: We lack the luxury to stand still.

Venhuizen went on to detail some of the major themes emanating from the Oak Brook, Ill.-based hardware co-op, including the idea of investing in its people and its infrastructure.

Venhuizen, who earlier this year succeeded Ray Griffith as Ace CEO, described Ace as a co-op on solid ground while investing in its future.

Wholesale revenues year to date are about $2.4 billion, up 3.2%. More impressive, he said, are the numbers at retail 4.1% same store sales growth. With that momentum, he said the co-op has a chance to stem the nine-consecutive-year declines in transactions. 

The co-ops debt to equity ratio improved dramatically as the co-op reduced external debt by more than a hundred million in the past year. And record-high service levels appear to be rising from fill rates of 97.1% a year ago to 97.3% today.

He also pointed to seven consecutive J.D. Power & Associations awards as signs of customer engagement.

Are things perfect? Far from it, Venhuizen said. "There is a long list of things about which we should be productively paranoid. But on balance, youre company is solid.

Surveying the retail industry shows causes of competitive concern amid consolidation. Venhuizen pointed to two developments on this front. One is the bankruptcy and subsequent purchase of Orchard Supply Hardware by Lowes that brings a 50 billion retailer that owns 72 hardware stores in California. Another is the growth of Nashville-based Central Network Retail Group (CNRG), that went from zero to 44 stores in a little more than two years mostly through acquisition.

Around us each day you can almost feel the changing landscape in our industry, he said.

Against that backdrop, Venhuizen pointed to investments in retail and wholesale. More than $100 million in retail profits has been spent on the co-ops 2020 Vision strategy.

Included in that are investments in the brand. Sales are being boosted by $3 million this year and another $7 million to $10 million next year in national advertising. Ace Rewards and Ace instant savings and Ace Supply Place programs are also being expanded. 

In distribution centers, a project to bring pick to voice technology across the enterprise is in the works, and the co-op is rolling out to distribution centers software to help optimize productivity. 

You either change and grow, or you die, Venhuizen said. Growth is a requirement and growth requires capital.

He added: We are investing today’s assets to secure tomorrow’s future.

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Expert pushes service tips at Ace session

BY HBSDealer Staff

Orlando — Author and customer service consultant Shep Hyken told Ace Hardware dealers that being helpful means more than just making sales. It means being a bigger part of the community.

Hyken is author of “Amaze Every Customer Every Time,” an analysis and case study of Ace Hardware stores. During the General Session of the Ace Hardware Fall Convention & Exhibits here at the Orange County Convention Center, Hyken pointed to tools retailers can use to beat the competition at customer service.

His advice:

• Act like the owner. “Tell everybody in the stores to act like the owner,” Hyken said. When employees treat the business like it’s their own, customers notice, he said. 

• Owners serve employees. If a retailer wants to be the best place for customers to buy products, it has to be the place for employees to work. “It starts with culture,” Hyken said. “Service has to happen on the inside of the stores as well as to the customer on the outside.”

He pointed to his golden rule of management: "do unto your associates as you would want them to do unto the customer."

• Ask the extra question. Because hardware store customers often don’t know what to ask, a store might need to draw out information from a customer. Asking an extra question is a good way to do that.

• By giving to the community, the community gives back. 

Hyken added: "We want to be so good that if our customer went to one of our competitors and expect the same level of service, the competitor would say ‘that’s asking too much.’"

 

 

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