Ace’s unique spin on products
Chicago — Maya Schultz has an eye for product innovation, as well as a good sense of humor. When the Ace Hardware product innovation merchant was asked why the innovation area was all the way in the back of the convention center during the Ace Hardware Convention Aug. 17-19, she had a good answer: “We’re like the milk in the grocery store,” she said.
Innovative products are more than just a traffic generator – they’re increasingly viewed by Ace and other retailers as a key pillar in a “differentiate or die” approach to business.
Finding new products, helping stores differentiate, and filling a role at the intersection of technology and home improvement – “That’s where the Ace helpful comes in,” she said.
Schultz sees a wide variety of new products in her role as innovation merchant for Ace, and also as the point person in Ace’s partnership with The Grommet, where the slogan is: “Discover What’s Next.” From fancy colognes “for the first-class man” to Go Girl reusable female urination devices, the Grommet platform has launched 2,500 products in 16 categories since its inception in 2008. The Grommet’s partnership with Ace was launched last year.
Next door to the Grommet booth on the show floor, the Ace Innovation Department showcased an equally wide range of cool products. (See slideshow, above.) Where does she get her ideas? Anywhere she can, she says, including Eureka Park at the Consumer Electronics Show, and from the shelves Ace’s own retailers. (Yeti was a retailer discovery, she said.)
Ace is also promoting innovation with a contest for inventors. The co-op’s Maker to Market program promises a free booth at the co-op’s Spring Convention in Dallas to the “maker” who makes the best pitch to a panel of industry judges. Already 54, makers have signed up to share their ideas.
At Ace, a plumbing upgrade
Chicago – The plumbing aisle is widely considered the core hardware-store category that is most difficult to optimize. There’s a lot of moving parts, and a lot of pieces. And, as Ace Hardware’s John Surane pointed out during the co-op’s general session, there’s been a lot of change.
“The plumbing market has changed significantly,’ said Suarne, the co-op’s EVP of merchandising, retail operations, business to business and wholesale holdings. Speaking to the assembled hardware dealers at the Ace Hardware Fall Convention & Exhibits here in Chicago, he added: “And we haven’t changed fast enough with it.”
This Oak Brook, Illinois-based co-op is making up for lost time on the market floor, where the Discovery Edge area showcased new plannograms, new assortments and new plumbing presentations. The demonstration area included space-saving sliding panels, neat see-through bins and point-of-purchase signage from plungers to pex fittings.
The new plumbing assortment is partially the result of the co-op’s analysis of the category and of 220 “best-in-class” Ace stores, based on total plumbing sales, total contractor sales and the ratio of contractor sales to total plumbing sales.
The company learned that many dealers may be leaving money on the table, or more accurately, leaving money in the plumbing aisle. Best in class plumbing stores perform three times better than other stores in sales and gross profit. They also produce $8 higher average tickets. These numbers are drawn from all formats, densities and competive environments, the co-op said.
One of the changes happening in the plumbing market in general is the delince in DIY spending. Meanwhile, the pro market is growing at a rate in excess of 5%.
Ace builds on its ‘Famous Four’
Chicago — The specter of Amazon.com floated in and out of the marketing plan presentation here at the general session of the Ace Hardware Fall Convention and Exhibits. The hardware co-op hammered on the message of service, convenience and quality – areas where the retailer believes the advantage tilts toward the independent.
And it plans to keep on hammering on those themes throughout 2018.
Recognizing the disruptive power of companies like Amazon – and warehouse superstores for that matter – Ace said it intends to exploit its core strengths in its messaging in 2018. Brian Wiborg, the new VP of marketing, retail training and store operations for the co-op, led dealers through a strategy of investing heavily in what the co-op is calling the “Famous Four” categories: holiday gifts, paint, backyard and bbq, and home preservation.
“We must own these categories,” Wiborg said.
To help achieve that kind ownership, Ace will spend $83 million in measured media in 2018. That’s part of a plan to reach the $100 million level in advertising by 2020, and it marks a major step up from its $30 million spend in 2013.
And as for competition with Amazon, Wiborg endeared himself to the cause of local independents by describing the Seattle-based retail disrupter as “a faceless organization that can give two rips about the community.”
In contrast, concern for the community was in full display mode at the general session, where Bill and Susan Murff of Cypress Ace Hardware in Texas were recognized as the co-op’s 2017 All Star for their support of the local Children’s Miracle Network hospital. Cypress raised $66,000 for the charity.
The general session kicked off the co-op’s fall market here at McCormick Center, where retailers were looking for deals and buys at 3,420 booths, including 90 new vendors.
[Click here for the company's most recent quarterly earnings report.]
John Surane, executive VP of merchandising, retail operations, business to business and wholesale holdings for Ace Hardware, encouraged dealers to seek out three “don’t miss” areas: Lawn and garden, the impulse queue, and plumbing.
Impulse queues — sophisticated trails of heavy-impulse high-margin products that lead customers to the cash register – have shown “awesome” results among a hundred or so early adopters, Surane said.
He urged retailers to consider adopting some of the new plumbing plans on the show floor, partly because “the market has changed significantly,” he said. And in the realm of lawn and garden, Surane encouraged forward thinking: "Let's plan to win next spring, and it starts here."
Ace executives didn't sugar-coat the challenges. Amazon's ability to connect with customers — particularly in the realm of delivery — is improving. Amazon Prime continues to grow its household penetration numbers, and there have been recent reports of Amazon cutting its delivery time down to a mere 12 minutes, in some rare cases.
But Wiborg also summed the optimism in the room: “As entrepreneurs, we're in the business of solving problems, and it’s what we’ll do head on," he said.