In New Orleans, Ace brands go marching in
NEW ORLEANS —Ace Hardware CEO Ray Griffith kicked off the co-op’s spring convention with a call to arms. “It’s time to start growing again,” he said. “Both of us, profitable. Are you with me?”
The retailing mood here at the Ernest N. Morial Convention Center was boosted by new brand alliances with Craftsman and Benjamin Moore. The co-op is also hoping to see results from its new television ad campaign, touting the slogan: “I will.”
In February, the company announced disappointing revenues for 2009 of $3.5 billion, down 10.4% from the prior year. Looking ahead, the co-op intends to build on strategies it developed and presented to its members during the fall market in Atlanta, centered around building upon its already strong paint department and differentiating Ace from the warehouse home centers as a home repair and maintenance center, rather than a home improvement destination.
John Surane, VP merchandising, marketing and paint, laid out the company’s plans by diving into its newest brand alliances, in Benjamin Moore and Craftsman, which the company continuously labeled as “game changers.”
Surane reinforced Ace’s commitment to being No. 1 in paint. “In almost every store I go to, it’s either No. 1 or No. 2 in sales, and it’s generating the most profit,” he said. “That’s not something we can back up on. As a matter of fact, that’s something we can capitalize on.”
Surane pointed to Ace’s two-brand paint strategy, which leverages its increased partnership with Benjamin Moore.
He also discussed trouble in the tool aisles—declining sales. “You know what makes this even worse folks? The hardware store used to be known for tools,” he told the dealers. “We have to have a game change. It is an important component of a great hardware store to have a healthy tool department.”
His goal for the company was to drive double-digit growth for 2011 and continue that for the next five years.
With that in mind, Surane talked about Ace’s new weapon in its tool sales arsenal, the newly announced partnership with Sears’ tool brand Craftsman. “This is game-changing stuff,” he added.
The new Craftsman line will roll out in two stages. First, as an endcap item featuring about 10 SKUs to help dealers get the brand into their stores quickly. The second is an entire Craftsman store-within-a-store concept, which will feature the full array of Craftsman products.
Another important merchandising initiative affects batteries. Ace’s all new 40-sq.-ft. replacement battery display is called “The Battery Place.” It features hard-to-find replacement batteries for everything from cameras, laptops and cell phones to dirt bike and radio-controlled car batteries.
“It’s so perfectly relevant for a good hardware store to be the best hard-to-find battery merchandiser in the industry,” Surane said. “It just makes too much sense. And it’s much easier for the retailer to execute because it’s a small footprint in the store.”
Lastly, the company revealed its new marketing campaign, rallying around the slogan, “Get in, get help, get on with your life.” That slogan was previously announced at the co-op’s fall show and is key to its push to communicate to customers when to use Ace as opposed to the big warehouse home centers.
The new campaign is featuring a national television ad push not seen from the co-op since the days of John Madden, under a banner of “I Will.” Retailers were given previews of the new television ad campaign. The ads feature DIYers taking a vow not to build a whole new home, but to fix and maintain the one they already have. One ad began: “This spring, I will not plan a yard project where I have to rent a bulldozer. I will just fertilize the lawn. I will not add an entire wing to my house. I will paint the wing I have.”
The ad culminates with a pledge to go to Ace and kick off the to-do list. And in an effort to help customers “get on with their lives,” the commercials end with pledges: “Then, I will embarrass myself on the back nine.”
Christopher Boniface, public relations manager for Ace, said the reaction from retailers who saw the ads was positive.
“What I’ve been consistently hearing from our retailers today is they feel that it’s very true to who they are. It’s not like we’re asking them to be something to the consumer that they’re not. It’s owning that home maintenance and really defining against what a big box offers.”
Slower growth for global plumbing market
The global demand for plumbing products is expected to decelerate from its heady pace during the 2003-to-2008 period, when spending grew by 7.6% a year, according to a new study by the Freedonia Group. The Cleveland-based market research firm is forecasting a more modest 3.5% annual growth rate through 2013, with the highest increases in China, India, Indonesia and Vietnam.
Growth in developed countries such as the United States, Canada, Japan, Western Europe and Australia will be limited by their economic recoveries and a slower pace of building construction, the report said.
The fixtures segment of the world plumbing products market is expected to grow at a faster rate than the fittings segment through 2013. In developed countries, increasing demand for low-consumption fixtures (e.g. motion sensor faucets) and “recreational bathing fixtures” will contribute to demands, according to the study.
KB Home partners with WaterSense
Los Angeles-based home builder KB Home, in partnership with the Environmental Protection Agency’s WaterSense program, has announced it plans to be the first home builder to build new homes to meet the WaterSense specifications.
The WaterSense label is granted to homes that use 20% less water than a conventional new home and save the homeowner more than 10,000 gallons per year, according to the EPA.
KB Home said it already incorporates WaterSense bathroom faucets to its new home designs.
“KB Home is proud to collaborate with the EPA to set a benchmark standard and build consumer awareness of the benefits of water-saving features in new homes,” said Jeffrey Mezger, president and CEO of KB Home. “We believe that much like how the EPA’s Energy Star qualification has raised awareness among consumers regarding energy efficiency, the WaterSense program will heighten consumers’ sensitivity to water consumption. In addition to being earth-friendly, homes built to the EPA’s strict guidelines for energy and water efficiency help to drive down the costs associated with day-to-day living in a home, saving buyers money and natural resources.”
According to KB Home, in order to meet the criteria, home builders must incorporate a number of WaterSense-labeled features, such as shower heads, faucets and toilets, as well as using landscape designs to minimize water usage and installing energy-efficient water heating. Once the home is complete, a third-party rater ensures that the upgrades meet the WaterSense standard.