From inflation to a challenging labor market, many challenges continue to plague retailers in 2023, but the Ace Hardware 2023 Spring Convention brought a breath of hope during an uncertain time. Hosted March 14-16 at the Henry B. Gonzalez Convention Center in San Antonio, Texas, the convention offered opportunities for product discovery, education and networking with fellow retailers to share best practices, concerns and stories of success.
The event brought together over 4,800 Ace retailers representing 3,355 stores. With total attendance over 11,800 for the entire show, the numbers reflect the importance Ace Hardware places on in-person relationship building and the enthusiasm Ace retailers have for the brand after two consecutive years of historic, record-breaking sales.
On the show floor, retailers had additional opportunities for product discovery in the New Vendor Market, which featured vendors sharing their products and services encompassing everything from plumbing to pet products.
Ian Williams, store manager at Fresno Ag Hardware in Fresno, California, and his staff are planning a major store reset, and he was using his time on the show floor to find new products and good deals.
“Our store is getting a refresh, especially the paint and clothing departments, and the show is a great place to find ideas and products to help us as we overhaul those areas,” he says.
The Handy family, including Sarah and Jeremy Handy, their three children and Sarah’s parents, all attended the convention together. Sarah and Jeremy co-own Valley Ace Hardware in Westcliffe, Colorado, and Sarah says she was looking for new home decor and housewares products for their 45,000-square-foot store.
“We were honored to win Ace’s Coolest Hardware Store contest in 2022, and we are continually looking for ways to improve,” Sarah says. “The convention is a great place to find those ideas and the kids and my parents were excited to experience the buzz of the convention.”
Along with seeing what’s hot in products, retailers could attend a variety of educational sessions and panels in the Retail Training Center. In a session on inventory management, a panel of retailers, including Dawn Gregg, co-owner of three Ace stores in the Spokane, Washington, area, shared their best practices.
Gregg says for her operation it’s key for employees to learn from day one the processes in place and the why behind each of those processes. She also uses Trello to post metrics so everyone can track their goals.
“If they don’t understand the why behind what they are doing, they won’t be able to do their job as well,” she says. “Our team gets excited about the metrics; they motivate each employee to take ownership and pride in their departments.”
Building on Success
Ace Hardware experienced another record-breaking year in 2022 with increased revenues, profits and shareholder distributions. CEO and president John Venhuizen says the company plans to build on those successes by doing what it has done best for the last few years, which is focusing on what is working.
“We plan to continue building on our Higher Ground strategies, and we are also looking at continued expansion of our distribution network, which includes close to $100 million in investments over the next five years,” Venhuizen says.
During 2022, Ace Hardware also saw record contributions to the Ace Foundation, which Venhuizen says directly aligns with the company’s operational goals and values.
“Our operational strategy and our desire to give back are inextricably linked; our purpose is to be the helpful place in our stores and communities,” he says. “Beyond the contributions through our foundation, the way our stores embed themselves in their communities is amazing. Yes, they are there to make money and be a good business, but their purpose goes beyond that to also serve those in their community.”
Venhuizen says there are three major pain points he’s hearing from retailers. The first is a drop in sales for some retailers. The warmer weather this winter has led to lower sales in areas that usually experience high winter sales from cold weather products. The deflation in prices of lumber and building supplies has also led to a drop in sales for some retailers. Second, the labor market continues to challenge retailers, and thirdly, there is less money in consumers’ pockets, so spending has shifted to services versus durable goods.
“We are working with retailers to help them figure out a way to be more flexible with employees without sacrificing quality and continue to attract workers,” Venhuizen says. “We have to adapt and double-down on treasuring every customer with above-and-beyond customer service.”
Planning for What’s Next
During the general session, Brian Wiborg, senior vice president of merchandising, announced the launch of Planogram Change Management, an ACENET application integrated with Epicor and Mango. The program will aid in the planning, ordering and executing of Discovery Resets to minimize labor and maximize profitability.
Andy Enright, vice president of retail development and strategy, shared with members on how Ace Hardware is the “coolest company in the world” thanks to a focus on a culture built on Main Street not Wall Street, positive growth and a purpose in serving others.
Enright touched on some of those challenges facing retailers, including ongoing labor shortages, dissatisfaction with jobs and the rise of the gig economy that has become another competitor for good workers.
“Competition from the gig economy is a real threat, but retailers can respond by showing potential employees why they should work for them,” Enright says. “Retailers should tell their story, their values and what they are about because they can provide something these other jobs can’t—a positive company culture, growth opportunities and an organization that cares about them.”
Instead of pulling back on inventory, Enright says retailers should go all in because inventory drives sales, with stores reporting more sales per square foot when they have more inventory per square foot.
Jessica Eibner, who owns Nelson’s Ace Hardware in Eagle River, Wisconsin, with her husband David says they keep inventory numbers high because it’s an extension of customer service. The operation does an astounding $9.7 million in sales in a town of 1,600 people.
“If a customer finds out that we don’t have an item or don’t have enough of a product, then that’s a bad customer experience,” she says. “If they ask for help and we don’t have it, it’s a bad experience for the employee too who is trying to help.”
In his address to retailers, Venhuizen focused on hope for 2023 and beyond, outlining the quantitative and qualitative ways Ace retailers have to be hopeful.
“Hope is the oxygen that keeps the strategic flames burning and gives us faith that our endeavors are worth it and possible,” Venhuizen says. “Without hope, plans perish and people bail. We need to be ignitors of hope and will work to infuse that hope into our retailers. Our purpose is we exist to serve others and to be the helpful place in our stores and communities.”