Ace paints a picture of improvement

Chicago -- Ace Hardware supplied several growth-minded statistics to members during the co-op’s Fall Market general session, which was heavy on strategy initiatives and inspirational messages for store owners.

The paint department figured heavily in the Thursday morning presentation. So did payment systems, logistics and -- as one would expect -- the concept of customer service as delivered by a friendly store. 

One of the big new tools in the works is an instant-savings Ace Rewards card, which senior VP merchandising John Surane described as “our most impactful promotional tool next year.” It’s expected to launch in January 2013. 

With instant savings, customers won’t have to deal with mail-in or e-rebates. Also, the new system through Epicor will allow a national lookup of Ace Rewards members, so customers who forget their card can still be served.

The Ace Rewards card has 23 million users, he said, delivering about a 13% greater profit than non-cardholder transactions.

The general session included a balcony scene from an actor playing “Beach house,” a color and self-described “soul mate” from the co-op’s Clark + Kensington paint marketing campaign. Describing the campaign, Surane said: “We had do to something different to break through the clutter.”

Another strategy was to offer free paint. During seven free-paint Saturdays, Ace gave away 1 million trials. The events grew 15% more store transactions for the entire store, he said, while increasing several other metrics. “We plan to sustain our attack in 2013,” Surane added. 

Ace showed statistics that its liquid paint market-share grew from 4% to 5.3% since 2009. And after a slow first year, the co-op is on pace to reach its five-year-plan target of 8% market share.

Ace Hardware COO John Venhuizen told the co-op members: “You are owners of a company that is on the move.”

It’s a good thing, too, he said, as competitors such as Amazon.com are rising in the home improvement market, and Home Depot said it’s spending more than $2 billion on technology and store improvements. 

The COO supported his case for the effectiveness of corporate programs by showing that Best in Class Ace members have a much higher adoption of programs, such as Ace Rewards, Craftsman merchandise sets and light bulb resets.

Venhuizen pointed to some examples from the wholesale performance side of the business, too:

• A 97.1% fill rate, showing a 70-basis point improvement from a year ago;
• $90 million lower costs through the SAP-powered transportation management system; and
• Seven-consecutive years of reduction in labor hours per 1,000 line orders.

The Ace convention held here at McCormick Place runs though Aug. 18.