DISTRIBUTORS/CO-OPS

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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Seven Secrets of the Hardware Store All-Stars

BY HBSDEALER Staff

Guadalupe Lumber in San Antonio has a reputation for its eclectic product mix. “Jackets, boots and all sorts of stuff,” said Kyle Grothues, fourth-generation general manager of the three-store hardware home center retailer. “We ended up with a lot of statues of the Virgin Mary one year.”

And the results? “We sold all of them.”

The ability to seize merchandise opportunities is one of the common themes among the crop of 2013 Hardware Store All-Stars.

HCN editors identified seven such “secrets” that are reflected by the business of the 2013 All-Star Hardware Stores.

1. In it for the customers: The most consistent trait of a stand-out store is almost always customer service. All-Star staff are often cited for being more knowledgeable than the big boxes (and occasionally carrying historical parts for old homes in the community, like Fairfax Hardware in Delaware). Halls Ace Hardware & Lumber in Florida even gives a welcome package to first-time customers.

2. Community cornerstone: The hardware store of the good old days was an integral community fixture. Luckily, that hasn’t changed all that much. Many All-Stars are beloved neighborhood hubs that participate in local charity events and causes. Pete’s Ace Hardware in California offers dog training for the disabled, specialty services and “Rent a Husband” on-site contracting, for example.

3. Serving the pro: If a store can earn the reputation of “where the pros go,” that trickles down to a DIY audience. In Texas, Guadalupe Lumber is wowing pros with a new drive-through lumberyard. Hinton (Okla.) Hardware’s DeWayne Tripp speaks the language. He was a plumbing/electrical/ HVAC contractor when he bought Hinton Hardware in 1998.

4. Marketing basics: Companies like Budget Build Home Center in Louisiana have embraced the gamut of social media options. (The store broadcasts new inventory on Twitter.) All-Stars are adroit on Facebook, but they also score points face to face. Bomberger’s in Pennsylvania has shown special skills in parade floats and grill giveaways.

5. Niche-building instinct: A natural home for odds and ends, the best hardware store manages to serve the general needs of customers while doing one thing really well — whether it be catering to the farm and ranch community; doubling as a tourist hotspot; or serving the hungry health food market, like Sol Foods, Hardware & Camping in Utah.

6. All in the family: Stores passed down from generation to generation operate as if they have a historical mission to succeed. Because they do. At Marcus Lumber Co. in Iowa, four fourth-generation family members are in the business. At 125-year-old Kellogg & Lawrence in New York, 40-year employee Jeff Kellogg is the great grandson of founder Henry Kellogg.

7. Metamorphosis: It’s not easy to renovate a store. But All-Stars recognize that what worked in the past might not work in the future — a theory that applies especially to store design. In Portland, Ore., Parkrose Hardware completed an extensive remodel in 2012. “The results have been quite impressive,” said COO Michael Nelson, “both aesthetically, and to our bottom line.”

For more All-Star coverage, visit Homechannelnews.com

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