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Ace Hardware is preparing to launch a new experiential store model.
Synchronized Raise AceCEO John Venhuizen said Thursday that the home improvement retailer plans to invest more than $1 billion over the next five years to integrate the concept into its new and existing stores.
Key changes include the creation of new store-in-store branded showrooms, new product assortments, a flagship store model with outdoor space and merchandise display, and improved customer service.
“We wanted to create more than just a place for customers to shop, but a place for them to socialize,” said Dale Fennel, the company’s vice president of merchandising, in an interview with Retail Dive. “We believe Elevate Ace represents a fundamental shift in our store model.”
Ace Hardware introduced the Raise Ace Concept featuring a fully built-out 13,000 square foot model store at the McCormick Place Convention Center during the recent Chicago convention.
While the new concept will be introduced in a few stores in the fourth quarter, the full rollout will begin in January, according to Fennel.
Experience-oriented retail is “one of the absolute necessities” for the company and for the entire future of retail, Fennel said. The transformation began two years ago with two goals in mind. The first was to build a store that would highlight Ace Hardware’s core categories – paint, power tools, backyard grilling and home maintenance. The second goal was community.
A key element of the changes is to create an in-store shopping experience that can’t be achieved online, Fennel said. A small number of brands and categories are driving the majority of Ace Hardware’s current growth, “so we set out to really elevate those brands and create this immersive shopping experience that you can’t find anywhere else.”
The home improvement retailer is introducing the experiential store model as it celebrates its 100th anniversary this year and recently opened its 5,000th location in the U.S. The company has opened 111 new stores through June and plans to open a total of 200 by the end of the year. Globally, Ace Hardware has over 5,800 locations in 60 countries.
The industry has changed since the company last updated its store design five years ago. To improve the customer service experience, Fennel has trained field sales associates to act as brand ambassadors and help customers make purchasing decisions, whether they want to shop by brand or by features.
In addition, the range in the home preservation sector has been optimized, said Fennel, and the composition of the product categories will change. While the grill category will occupy the same space in the sales room, the energy department will grow by about 60%, according to Fennel.
“We really focus on understanding what the customer wants, whether it’s in terms of brand or features and benefits, and offering them all the products that are available at Ace either in-store or, in the case of grilling, for build and delivery,” Fennel said.
As a cooperative, Ace Hardware follows a different business model than big-box home improvement stores. And Fennel said the company operates in a slightly different retail segment than Lowe’s or The Home Depot. Most Ace Hardware stores don’t carry building materials or major appliances, for example. That approach has protected the company from consumers’ economically-driven reluctance or inability to make big purchases like major home improvements.
Lowe’s and Home Depot have seen sales declines in recent quarters. Decrease of 4.4% And 2.3% or. Ace, however, reported Sales increased by 2.5% in the first quarter compared to the previous year to 2.1 billion dollars.
“We know there are different buying occasions and customers shop at different retailers, but this separation between home maintenance and home renovation is an important differentiator between us and the big chains,” Fennel said.
