Five highlights from the State-of-Ace
Las Vegas — Ace Hardware Corp. CEO John Venhuizen took the stage here Tuesday morning to deliver to Ace nation a rousing state-of -Ace address, complete with record-setting metrics, a new rallying cry, and ambitious retail ideas to take the co-op deep into the future.
A packed Las Vegas Convention Center auditorium seemed to enjoy the performance, punctuated by applause, a few headquarters jokes and some passionate calls to action.
Among the highlights:
1. Record numbers
Armed with charts and graphs, Venhuizen detailed the Oak Brook, Ill.-based co-op’s record setting recent performances in net income, revenue, retail division sales, patronage dividend (up 7% to $314 million in 2021) and also a record contribution to the Ace Foundation of $20.8 million. All were records. He added that in the last 10 years, Ace delivered $1.7 billion in patronage dividends.
Looking ahead, there were also positive numbers, specifically, a 3-1 ratio of capital expenditures to depreciation. “We ae not skimping just to build a bigger better bottom line,” he said. “We’re also aggressively investing in our future because we believe our future is bright.”
2. Experiential retail
From the stage, Venhuizen emphasized that the retail goal posts have moved. The battle against digital enemies requires a new standard of excellence that bring into the conversation the buzzword “experiential retail.” The consumer’s shopping experience, Venhuizen said, needs to be so jaw-dropping good, that “shopping at Amazon.com looks shallow, boring and pathetic by comparison,” Venhuizen said. “That’s the new bar.”
Looking outside the hardware industry, Venhuizen described the success of Ulta, with its in-store beauty spas, and Dick’s Sporting Goods, where customers can climb rock walls or hit golf balls as part of an experience that dot-coms can’t duplicate. Ace retailers can play a similar role, especially in grilling and BBQ, described as the “poster child for successful experiential retailing in the hardware space,” he said.
“Best in class retailers insulate themselves from digital enemies,” he said.
3. A rallying cry for a 100 year anniversary
Looking ahead to the upcoming 100-year anniversary in 2024 of Ace Hardware, Venhuizen cautioned against resting on the co-op’s laurels, and suggested a new new rallying cry for growth: “10, 25 and 100.” Those numbers represent $10 billion in corporate sales and $25 billion in retail sales by the end of the 100th anniversary of the co-op.
It’s not enough to celebrate with balloons and confetti in 2024, he said, hence the ambitious plan. “If we swing and miss, you can laugh at me in three years.”
4. Convenience, guaranteed
Venhuizen also shared a bold proposal that he described as a one-trip-guarantee. It goes like this: “We tell our customers, if you can’t get everything you need to successfully complete your project, we’ll run it out to you, for free.” (Clarification: the customer, of course, would pay for the product, but the delivery would be free.) The idea is to deliver “service with substance,” he said.
And the idea behind such a guarantee is this: While big-box competitors often back up their promise of lowest prices with a guarantee, so too, should Ace back up its brand promise of “most convenient.” Venhuizen pointed to studies that show a misperception in the market that big box competitors have an advantage in in-store availability and product selection, and that misperception, he said, is a leading impediment to consumers’ consideration to shop Ace. The co-op could chip away at this misperception, with a convenience guarantee that would ultimately lead to “more customers and more sales,” he said.
5 A final takeaway
With a style that included self-deprecating humor, the CEO also brought plenty of passion to the general session audience. He ended with the message: “Aggressiveness of our competitors and the expectations of our consumers demand our constant attention and our passionate pursuit.”
The Tuesday general session served as a kick-off for the co-op's three-day live-and-in-person convention.
