In Dallas, it’s Ace vs. Amazon
Dallas — In an increasingly Amazonian retail world, Ace Hardware executives hammered on the power and potential of the independent hardware store and their “red-vested heroes.” But there are a lot of challenges that independent stores must conquer to thrive in the future.
Here at the kickoff general session of the co-op’s Spring 2018 Convention and Exhibits, Ace executives offered a boatload of guidance, checklists and must-wins, as well as firing several shots across the bow of the formidable battleship Amazon. Repeatedly, Ace stores were presented as the human antidote to the faceless, cheap and faraway retail giant.
“All those people chasing Amazon and all those retailers chasing e-commerce are concerned with two things: speed and efficiency,” Ace Hardware executive VP John Surane said during the general session. “To get that efficiency, they are taking people out of the equation. Just do it cheap,” — he paused for emphasis — “that’s not our motto.”
Instead, it’s the job of Ace dealers to offer the customer those things for which they are famous: service, quality and “taking care of our neighbors and doing it right,” Surane said.
Furthermore, Surane used the words of Amazon CEO Jeff Bezos as a caution to those manufacturers who see the online giant as a viable partner. Surane said Bezos has described the profit made by vendors and manufacturers as fair game for Amazon to capture for its own. “You hear that vendors?” Surane asked, as part of an effort to encourage them to seek the independent hardware channel as the preferred distribution partner.
The harshest attacks on Amazon came from guest speaker Jules Pieri, founder and CEO of The Grommet and a self-described champion of the little guy. Amazon, she suggested, is “a parasite attached to our economy, deliberately destroying the kind of competition that made America great.”
In her remarks on the background of The Grommet, the new product incubator purchased by Ace Hardware Corp. last year, Pieri described Amazon as approaching a “state-owned monopoly” of retail.
As Amazon continues to grow — the Seattle-based company’s sales grew 31% last year — and the retail industry continues to change, the independent Ace dealers were encouraged to use their person-to-person and local-market advantages and win in three key areas in 2018, according to Surane:
- Invest in the co-op’s 20/20 Vision high-performance retailing program, which includes enriched assortments and brand investments.
- Commit to and grow business-to-business sales. The co-op pointed to a new focus in 2018 on the residential property management customer. The effort is bolstered by new leadership from former Grainger executive Bill Walton.
- Embrace the launch of the new Ace Hardware website. The site will include an improved buy online, pick up in store function (announced to applause), and in the words of Surane: “A game changer will be our ability to introduce BODFS — buy online, deliver from store.”
Ace Hardware CEO John Venhuizen, batting clean-up on the general session agenda, described several ideas on the future of retail for Ace Hardware, including better use of consumer intelligence and data and developing a unique shopping experience.
He also talked about evolving the role of product distribution: “We are going to need to become either an optimized logistical machine or an ultra-hyper convenient shopping experience — or both,” Venhuizen said, adding that he’s leaning toward both.
“The challenge of our time is for us to figure out a way to deliver less stuff to our stores more frequently,” he added. And he said the company is taking steps in that direction, with good results so far in a test in the Phoenix market, which he described in detail.
“We need to develop a persuasively compelling proposition to recruit, train and inspire the best talent the retail world has to offer,” he said, as his last but not least point about the future of Ace.
The Ace convention runs through March 17.
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