Playing The ACE Card

The Hardware Journal has asked John Venhuizen, President and CEO of ACE Hardware to update his initial article from our April 2014 issue and outline the goals and strategy of ACE Hardware and its members for 2019 and beyond.

Your Retailers are positioned as “Your local hardware store and being a part of the local community”. How important is that message to your members and customers?

Helpful is our weapon in the world. We really do believe that we have been blessed to be in the business of serving others. It’s not just a good strategy for business, it’s a good strategy for society. And to be quite blunt about it, I do not know any retailer on the face of this earth that better serves their neighbours and their community than the local ACE owner and the 100,000 red-vested heroes who work so diligently in our ACE stores.

Can you remind our readers about ACE Hardware’s commitment to customer service and the importance of this commitment throughout the organisation?

We believe there are three battles that we must wage to win the retail war for relevance. And given the enemies we face – it most certainly is a war:

1. Service.
We have an irrational pursuit of amazing service. We have won the JD Power award for customer satisfaction 11 out of 12 years – and we are far from satisfied.

2. Convenience.
We must exploit the geographic proximity advantage we have to the world’s homes and businesses. With over 75% of the U.S. within 15 minutes of an ACE store, we believe we have a material advantage.

3. Quality.
We have a fanatical pursuit of high quality, locally relevant, differentiated product. Not one of our stores in all fifty states and sixty-seven countries around the world has the same assortment as another. It speaks to our stores fanatical commitment to locally curate and relevantly differentiate.

Since your last article for The Hardware Journal in 2014, how has Hardware Retailing changed for ACE Hardware?

The business climate in general and retailing in particular is undergoing more change every year than it previously did every decade. Complacency will clearly lead to death. At ACE we
continue to focus substantially on improving the depth of our core while also investing in our digital transformation to further meet the needs of our neighbours and better equip our people – who will always remain the core of our brand.

Can you outline the new ACE Hardware strategic plan?

We are in the seventh year of our strategic plan coined 20/20 Vision. The results of our retail growth strategy have exceeded our plan as ACE has grown over 64% during this run and our retailers have enjoyed same-store sales and same-store gross profit growth every single year. But I would be a liar if I didn’t confess that we

have much yet for which we need continuous improvement. We continue to diagnose the next iteration of our growth strategy which we plan to deploy in the fall of this year. While many new initiatives will be launched, I can assure you that the core of the plan will be deeply rooted in service, convenience and quality.

How has ACE’S strategy changed over time?

We are disproportionately investing, in three very important initiatives. These investments are not in lieu of the core – but in addition to them:

First is digital. We spent a lot of money to re-platform our website. was up 43% in 2018, and we are up a bit more than that through Q1 of this year. 92% of all our .com orders are picked up in the local store and 100% of the gross profit goes directly to the local ACE owner. We recently launched BODFS (buy-online, deliver from store) and we are seeing material increases as a direct result of this initiative with an average transaction 5 times higher than ‘normal’ .com orders.

Second is The Supply Place, our business-to-business function. The Supply Place is our No. 1 fastest-growing area. We’re going to continue to disproportionately invest in that.

Third, from a supply chain perspective, we’re investing the majority of our capital to ensure we have the biggest, best, most efficient supply chain. We’re providing a new, unique and relevant benefit to local owners. Our stores now can order whatever they want to satisfy and win over a customer, and we’ll ship it to them the next day. We want to be faster than
Amazon on products we stock.

How is ACE competing in the home improvement market?

Our locally owned ACE stores compete with some of the biggest, best, most well-funded companies in human history. And you won’t catch me saying anything badly about them.
They are very good at what they do. At ACE, we are

fortunate to be quite different from the big box players on many fronts, not the least of which is that they tend to be primarily about home renovation whereas ACE is more focused on home preservation. Customer may opt to visit a big box store to spend $40,000 on a kitchen renovation with granite counter tops and new appliances. Our focus remains on those customers who prefer to spend $40 on a few gallons of paint to spruce up or ‘preserve’ the assets they already own. From a merchandising perspective, our mantra is to become famous for four. Specifically, we want to dominate (i) paint (ii) power (iii) backyards and BBQ and (iv) home preservation.

What’s your vision for the future of ACE?

I remain entirely convinced that ACE’s best days are still ahead of her!