DISTRIBUTORS/CO-OPS

Ace doubles down on ‘Famous’ Four

Must-win categories and new initiatives from the Ace show.

BY Ken Clark

Orlando, Fla. – BBQ & Backyard isn’t just a popular home improvement category. In the Ace Hardware playbook, it’s a retail battleground and a must-win department.

The same can be said for power (outdoor equipment and power tools); paint and home preservation. Together, these categories are singled out as the “Famous for Four” in which independent hardware stores must shoot for the stars. John Surane, executive VP and chief merchandising and sales officer for Oak Brook, Ill.-based Ace Hardware, has hammered on these categories before. At this year’s general session, he continued the barrage.

“This is the stuff that we’ve got to galvanize around, our common mission,” he said.

The spring convention also included the first general session presentation from Kim Lefko, who joined the company as senior VP and chief marketing officer less than a year ago. She explained the Ace brand and what it stands for will not change – but “the way we connect and engage with consumers absolutely has to change.”

Kim Lefko

She pointed to stats showing why that’s the case. The average order in a store is $27. That’s well below the average online order of $79, and dramatically below the delivery order of $272.

But her favorite statistic is this: “40% of the people using delivery are Ace Rewards members who have not shopped with us in two years.” Those numbers describe an opportunity for growth.

“This is critical,” she said. “We understand that our customers’ needs are changing and we need to be there with them.”

Ace is piloting a digital marketing tool to allow dealers to build their own key-word marketing campaigns. Ace is also launching an Ace App by the end of 2019, she said. There is a strong case to be made for that initiative: Purchases inside an app have grown by 70% in the last year. And people who purchase in an app spend three times more than online shoppers, and they spend five times more than in-store shoppers.

As for the merchandising thrust, Surane shared the positive results cooked up from grilling and chilling. “When you look at this BBQ category, we are taking market share,” he said. The category went from $60 million in sales four years ago to $170 million in the most recent year. One reason for the success, he said, is the ability to provide both assembly and delivery, something that online giants are unable or unwilling to do.

“Convenience is under fire,” said Surane. “We’ve got to win that battle for convenience.” And Assembly and delivery is “one of the things we need to do to be different from Amazon.”

In the power tool aisle, Ace described its position of strength by pointing to its brands. In the outdoor power equipment category, there’s Stihl, Toro, Crafstman and the fast growing Ego battery-powered tool brand. The co-op has a deal with Stihl to introduce certain battery-powered products to stores, and also to sell Stihl online, advancing the relationship between Ace and Stihl.

Also on the shelves is a mix that includes Milwaukee, DeWalt and Craftsman.

“We’re going to sell fertilizer and we’re going to sell dirt,” Surane said. “But if you want to make your business sizzle, think about power.”

Dealers in the packed Orange County Convention Center hall were also advised to think about paint. It’s a category that’s most resistant to internet shopping — “people can’t mix their own paint,” Surane said. and it brings customers into the store to build relationships.

Ace promoted its ‘famous’ categories over the exhibit floor.

“Paint is a battleground we must win, and it is one of the most-fierce battle grounds,” he added. “All of our competitors are fighting for it.”

Into this competition, Ace has inserted its “Extra mile promise.” That means that if a customer returns home and discovers he or she is missing a brush, tape or other sundry, then Ace will deliver it. He indicated the program met some early resistance among dealers, but it has moved the needle in sales.

The co-op’s goal is to reach 10% market share in paint, he said. “We will get there,” he said.

The fourth category – home preservation – was described the core, and “the guts of a great hardware store.” And for Ace dealers, its crucial, he said, to be known as the place to fix, repair or maintain the house.

“Ask yourself, ‘how am I doing in these categories?,’” he said.

 

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