In Part 3 of our profile of Costello ACE Hardware, a leading US retail group under the ACE brand umbrella, we shine a light on 2024 planning at this forward-thinking family firm. Senior Project Leader Monica Rodriguez takes The Hardware Journal into the boardroom for an insider’s view of their strategic process.
Early planning is the key to setting and achieving goals at Costello ACE Hardware, one of the fastest growing independent hardware retailers in the US, with 46 stores in five states.
Core to the company’s DNA; growth will always head the agenda. However Costello’s annual structured strategic process is critical for identifying top priorities for the year ahead.
With so many acquisitions of established retailers, a primary aim is to create consistent processes, culture and standards across all their stores. Then customers have confidence that the name Costello is synonymous with a first-rate experience.
“Our inclusive, collaborative planning process ensures that every aspect of Costello’s business can hit the ground running in 2024,” states Project Leader Monica Rodriguez.
Laying the groundwork
Strategising for 2024 began in earnest in August 2023, when 23 people representing every leadership area of the business were invited to the New York head office.
In preparation for this gathering, “we asked our leadership team and various stakeholders to look at the current business model and come up with 12 issues that the business was doing poorly or not at all,” Monica says.
It’s been a deep-dive, where participants assess root causes and propose opportunities and solutions.
“The group submitted 186 pieces of feedback to me,” recounts Monica. “Then I distilled their input down into three overarching topics directly related to Costello`s Ready for Business in 2024 strategy. These formed the agenda for the first in-person meeting of our planning team.”
One workshop. Three key themes.
The topics which emerged were: 1. Communication & Collaboration, 2. Training, and 3. Standard Operating Procedures.
“In late August, everyone convened for a very productive workshop to discuss these topics.” The attendees were broken into five groups of subject matter
experts to explore topics in greater detail. They included multi and individual store managers, plus people with specific responsibility for different areas of the business.
Participants newer to Costello’s, who have gained different perspectives through previous work experience, were also invaluable.
The groups focussed on current processes, seeking to answer these questions:
- Is our current process working for the business?
- If not, what needs to happen at the company support level?
- What would the implementation plan look like at store
level? - How do we train or re-train our store teams?
Each group then presented their findings to the entire gathering for a Q&A session.
September think tank
Next stage: the groups took these questions away for further consideration.
As Monica explains, “they were welcome to enlist the expertise and help of others within the company as required.”
The groups reconvened for a September meeting to report on their ideas and solutions. By pooling their expertise, the participants were able to develop the themes to a more operational and deliverable format.
Their solutions form the basis of initiatives to be rolled out in 2024 company-wide.
Communication & Collaboration
According to Monica, “our objective is to achieve regularised standards, operations and processes in every store, through a focus on these three areas. At the same time retaining the local character and emphasis on personal service that is the hallmark of ACE hardware stores. Absolutely the key driver of this year’s initiative planning,” Monica stresses.
“The workshops, expert groups and presentations all forge elements of the initiative as part of a collaborative process. All associates (staff) can then use the expert knowledge within the business to work together to build and roll out an initiative that will make the company stronger together.”
Training
Training for all new employees will be strengthened, integrating 2024 company initiative elements into every element.
“This is crucial to success. Also balancing and setting best practice standards for current associates through a comprehensive, easy-to-follow, easy-to-sustain programme,” Monica says.
Standard Operating Procedures
Participants with specialist expertise in critical areas were able to identify and close gaps in standard operating processes. The focus: back-room, front-end, truck to shelf and inventory presentation. Solidifying company procedures for each area requires a collaborative approach. “We are harnessing the company’s institutional knowledge to expand our standard operating process library, so we can
create a Costello manual.”
Readying for roll-out
A third meeting in October was dedicated to carrying the initiative through to specific areas, kicking off with Department Goals and Objectives.
Again, participants had homework to do before attending. Each business director had been asked to define their three main goals for 2024 and highest impact lead measures for their areas to share at this workshop.
Marketing, Category Management, Human Resources & Training, Projects, Loss Prevention and Business to Business all made presentations, reporting on progress related to the 2024 Ready for Business Initiative.
Group 1: Inventory Accuracy – This group was tasked with evaluating and improving key Standard Operating Procedures in their backroom and front-end processes. The spotlight was on how product is received and errors that can occur during checkout. Special ordering processing, product transfers, accurate purchase orders and manual ordering were all discussed.
Group 2: Inventory Handling – Smarter mapping and location coding of product were the priorities targeted, to enable effective ordering and efficient shelving.
“Ensuring every retailer has accurate reporting on the planogram spacing within their stores allows them to order the right amount for each location and make informed decisions for future space allocations.”
Monica adds, “the creation of a single process for location coding of product company-wide also facilitates better tools and resources for training while implementing the right process for productivity in every location.”
Group 3: Inventory Presentation – Here the spotlight was on streamlining the truck-to-shelf process to boost the efficiency of moving freight into stores and reducing obsolete inventory. “We call it reducing footsteps. And it’s made possible by ensuring all our retailers have the right tools and are using the
most effective process,” says Monica.
Group 4: Culture and Training – “Our aim is to improve training from Day One of this initiative but also Day One of an employee’s career with Costello’s.”
This encompasses onboarding, front-end training, and bringing teams up to speed on the schedule of initiatives to ensure effective rollout. Revised standard operating processes will be incorporated into all of the above during Q1 2024.
The presentations were followed by lively discussion, debate and teamwork.
One plan for all
The overall company initiative will be introduced in logical, business-sensitive and appropriate phases. Within this overarching strategy are specific category and department plans. “These will be worked on and rolled out by individual areas of the business.”
As Monica sums up, “Costello’s Ready for Business 2024 will provide resources and support to stores in the areas of product receiving, truck-to-shelf, product handling and front-end procedures. Through these measures, we will achieve a streamlined approach and the higher degree of productivity necessary to do more with less in an unprecedented retail workforce environment.”
Backing our branches
“We’re supporting all stores by giving them the essential roadmap for task efficiency,” affirms Monica.
“This frees up management to focus on the customer service aspects which are at the core of the Costello ACE hardware offer and what sets our shopper experience apart from impersonal big box stores.”
“Proactive planning also helps our stores thrive in a competitive marketplace and challenging climate.”
“Every time a customer visits any of our stores, we want them to expect great standards and have the confidence and trust that Costello’s will always deliver the solutions and experience they seek. That is what ‘The Helpful Place’ is all about.”
Monica is proud of this inclusive process which is both highly effective and democratic. Buy-in is more assured when everyone is participating and part of the process from the start. Having conducted its planning this way for many years of continued growth and evolution, Monica believes it provides a good template for Costello’s, or any organisation, to focus on the future, set priorities, be consistent and manage change.
“Our plan is to build on what we have planned for and achieve in 2024.”
The Hardware Journal looks forward to revisiting ACE Costello to see the results.
Costello ACE at a glance
- Number of stores: 46
- Locations: Five states. New York, New Jersey, Pennsylvania, Maryland and Virginia
- Services Include: Product Assembly as required, automotive / general key cutting & re-keying, backyard shed installation, carpet cleaner rental, blade and knife sharpening, bulk kerosene, paint colour matching, print copy machine, delivery, gift cards, glass and acrylic sheet cutting, glass repair, job pricing & site delivery, lumber and building material, pipe cutting/threading, pool/spa water testing, propane dispensing and exchange, screen and storm window repairs and tool rental.
