Ace builds on its ‘Famous Four’
Chicago -- The specter of Amazon.com floated in and out of the marketing plan presentation here at the general session of the Ace Hardware Fall Convention and Exhibits. The hardware co-op hammered on the message of service, convenience and quality – areas where the retailer believes the advantage tilts toward the independent.
And it plans to keep on hammering on those themes throughout 2018.
Recognizing the disruptive power of companies like Amazon – and warehouse superstores for that matter – Ace said it intends to exploit its core strengths in its messaging in 2018. Brian Wiborg, the new VP of marketing, retail training and store operations for the co-op, led dealers through a strategy of investing heavily in what the co-op is calling the “Famous Four” categories: holiday gifts, paint, backyard and bbq, and home preservation.
“We must own these categories,” Wiborg said.
To help achieve that kind ownership, Ace will spend $83 million in measured media in 2018. That’s part of a plan to reach the $100 million level in advertising by 2020, and it marks a major step up from its $30 million spend in 2013.
And as for competition with Amazon, Wiborg endeared himself to the cause of local independents by describing the Seattle-based retail disrupter as “a faceless organization that can give two rips about the community.”
In contrast, concern for the community was in full display mode at the general session, where Bill and Susan Murff of Cypress Ace Hardware in Texas were recognized as the co-op’s 2017 All Star for their support of the local Children’s Miracle Network hospital. Cypress raised $66,000 for the charity.
The general session kicked off the co-op’s fall market here at McCormick Center, where retailers were looking for deals and buys at 3,420 booths, including 90 new vendors.
[Click here for the company's most recent quarterly earnings report.]
John Surane, executive VP of merchandising, retail operations, business to business and wholesale holdings for Ace Hardware, encouraged dealers to seek out three “don’t miss” areas: Lawn and garden, the impulse queue, and plumbing.
Impulse queues -- sophisticated trails of heavy-impulse high-margin products that lead customers to the cash register – have shown “awesome” results among a hundred or so early adopters, Surane said.
He urged retailers to consider adopting some of the new plumbing plans on the show floor, partly because “the market has changed significantly,” he said. And in the realm of lawn and garden, Surane encouraged forward thinking: "Let's plan to win next spring, and it starts here."
Ace executives didn't sugar-coat the challenges. Amazon's ability to connect with customers -- particularly in the realm of delivery -- is improving. Amazon Prime continues to grow its household penetration numbers, and there have been recent reports of Amazon cutting its delivery time down to a mere 12 minutes, in some rare cases.
But Wiborg also summed the optimism in the room: “As entrepreneurs, we're in the business of solving problems, and it’s what we’ll do head on," he said.