Ace Hardware: Building a brand

The story of hardware, to a large extent, is the story of the national hardware distributors: Ace, True Value, Do it Best and Orgill.



There’s no shortage of heavy competition in the home improvement industry. The big boxes battle for their billions on Main Street and Wall Street. The paint companies engage in perpetual arms race to develop the best coatings with the fewest VOCs. Every category has its runner-up looking to move into the winner’s circle.



But it would be hard to find an area of home improvement retailing that’s subjected to more competitive forces from more directions than the Big Four distributors to the friendly neighborhood hardware stores of America — that’s Ace, Orgill, Do it Best and True Value. It’s not just the competition to lower prices, or the competition to improve logistics or the competition to reach more customers — it’s also the interconnected battles of recruiting, developing and building business.



It’s a sort of ongoing three-level chess match.



In this special section, which you can bet will be dissected by distributor executives in search of competitive advantages, HCN looks at the state of three co-ops and Orgill, in the words of their leaders and some of their customers.



Oak Brook, Illinois-based Ace Hardware is the largest of the Big Four distributors, with 2013 total revenue of $4.2 billion. Still, Ace CEO John Venhuizen sees the co-op as an underdog in the home improvement world.



“When our retailers get to compete against some of the biggest, best, most well-funded companies on the face of the Earth — and be successful and win — that’s fun,” he told HCN in a recent interview. “We all kind of show up with a little chip on our shoulder every day. We always joke that we know it’s David and Goliath, and we’re David.”



David, according to the CEO, is on a bit of a roll, with 75% of the co-op’s retailers setting their own companies’ records for profitability in 2013. On top of that, Ace spent more money on advertising in May than ever before in its corporate history as it rolled out its new Paint Studios.



One differentiator for Ace, he says, is the emphasis on the brand marketing — as evidenced by national television advertising. “We disproportionately invest an incredible amount of money in what we call retail tools,” he said. “Brand is huge. And don’t take my word for it. Ask consumers.”