Ace Hardware’s chief marketing officer Kim Lefko is on a mission to keep the 101 year old brand vibrant and modern. She attributes the company’s relevance to its gritty entrepreneurial spirit.
“You wouldn’t think of Ace as being relevant in the digital space but Ace hardware.com is up 35% coming out of Q1 and app revenue up 45% and same store sales are outpacing our biggest competitors,” says Lefko.
Ace operates 5,100 stores across the country competing against large big box hardware retailers like Home Depot and Lowes.
“We’re in pursuit of becoming the most helpful hardware store on the planet, and as we break it down, we say we want to be the most preferred destination for paint, power tools, OPE, outdoor power equipment, and barbecue,” she continues. “Our purpose is really clear: we exist to help others, and that means inside the store, but also inside the neighborhoods and communities where our stores are located. We live that. It’s very, very genuine.”
“We’re humbly proud,” she continues. “Our store owners are incredibly gracious and humble and would never put the spotlight on them. They do amazing work and they deserve the credit because they’re the heartbeat of America.”
Prior to joining Ace Hardware in 2018, Lefko held senior marketing positions at Weber, Radio Flyer and Graco. Brand Innovators caught up with Lefko from her office in Chicago to talk…. This interview has been edited for length and clarity.
What attracted you personally to the Ace brand?
I’ve really developed into a bit of a hardware girl. I started my career at Black & Decker and DeWalt right out of school and have bounced around on the vendor side, on the product side, selling to Ace from Black & Decker, Newell Rubbermaid, and then most recently Weber Grills. When I met the team and they were looking to separate marketing from merchandising, the purpose of the company was exciting. It rallies you, this idea of existing to serve and help others. And we live in the store, but we also live in the communities. It’s very authentic.
Ace is special on the co-op side because we have this size of a corporate 500 company that allows you to do a lot of things really well, competitive buying, getting innovation launched, doing marketing behind that brand. But we have the entrepreneurial spirit that these stores are locally owned and operated and they can decide what products they want to sell. We always say a store in California can be selling surfboards and disc golf and a store in Florida can be selling fishing equipment.
That ability to be relevant to the neighborhoods and communities, but all under the umbrella of a large global trusted brand is a special position to be in. I was moved by helping these small local owners thrive and succeed. When you travel across the country, you run into people that are third, fourth generation. It’s like my great-grandfather started this store and it’s still there today growing and outpacing the big mass retailers. That’s very purposeful.
How are you thinking about customer experience?
Consumer experience is changing and I’ve seen a lot of change in retail. We are very clear on the three pillars that we want to differentiate on and really hone in and be great at is service, convenience and quality. When we think about service, a lot of that comes down to education and the expertise in help. We have a hundred thousand Red Vested Heroes across the country in all of the stores. When you walk in and have a question, we want to be there to help you through it. The idea of help is taking on a new shape and form with digital and how are we with turnover in this store? How are we leveraging digital to arm new store associates with the knowledge?
The second pillar is convenience, which has always been proximity to homes. We have 5,000 stores and 80% of U.S. households are within 15 minutes of an Ace store. Convenience would win in the past. Now as we think about convenience, it’s speed. I want to be able to order on my phone and pull up in front of an Ace store and have it ready in 15 minutes. I want to be able to buy a grill, select it in the store or online and have it assembled and delivered with the fuel and the grill cover to my back deck. We’re able to do that for free for Ace Rewards members. We remove the hassle.
Our third pillar is quality, which has been a pursuit of partnership with the best brands. When we talk about paint, Benjamin Moore is the best paint and we have that exclusively as a national retailer. When you think about barbecue, Weber, Big Green Egg and Traeger are the big, and Blackstone are the big grill brands. We’re the only national retailer that has that lineup of brands.
When you think about outdoor power equipment, Stihl, Toro, Ego, that lineup of brands, like they’re the best brands. We’re the only national retailer that have those brands. And then power tools, we have DeWalt, Milwaukee and Craftsman.
How are you telling that story to the consumer?
It varies. The in-store environment is important. One of the things that we’re investing pretty heavily in is when you walk into an Ace store to make sure that that shopping experience is relevant to today’s consumer. And we’re modernizing it. We’re launching a brand new store format called Elevate Ace. We’re putting $1 billion into renovation over the next five years. As we tested this model, we see that the stores that have this model are up 12% in same store sales versus the stores that don’t and gross profit is up 7%. When you can grow P&L at the top and the bottom, there’s something good there. We’re now scaling that out to more Ace stores.
What you’ll see in that touch point, back to what service convenience and quality is, the best brands are front and center. It’s almost like little mini brand shops or a store within a store concept that supports quality. It also supports service. We’re launching a lot of new services like free assembly and delivery for grills. The proximity of being able to get the information you need for help.
We’re still doing TV advertising. It’s incredibly effective for us. We launched a mobile app about five years ago, and the revenue through the mobile app is up 45% already year-to-date. In-store, online, mobile and TV are a couple of the areas where we’re very consistent as our superpower, beating that drum of service of convenience and quality and how it’s relevant now to the consumer.
How are you thinking about retail innovation today?
Big business is bad, small is good in the eyes of consumers today. That perception and psychology of the consumer and the shopper benefits us at Ace. Modernizing that store environment with Elevate Ace is a big innovation area.
The second is services. How do you take the hassle out of homeownership? I’m not as knowledgeable as my father and my grandfather, and that continues to be the case with homeowners today. There’s so much guesswork and there’s so much fear in taking care of your yard. We just launched a program called YardRX, a personal prescription to you and your yard. You can go in and enter your address and you can pull up the actual footprint of your grass.
We know the regionality based on the grass type and the treatment and the growth times and seasonality. We serve up a personal prescription to you in a subscription model that there’ll be three deliveries made to your store or your house. Those three deliveries are when those products need to be applied to the yard. That removes part of the guesswork. You don’t have to walk into a store and wonder what to buy and when to plant it and how much do you need. All of that guesswork is taken out of it. It’s guaranteed the best price delivered at the right time and personally curated products based on what you’ve purchased in the past.
You mentioned before working with Weber and Black & Decker. Can you talk about how your experiences of other brands helped you in this current role?
I’ve been very blessed to work for loved, iconic, very American brands. The mantra that I often use is one, it always starts with the customer. You need to be really connected with how the customer shops, how they live, what their homes are like. Today’s homeowner is different from the homeowner of 10 years past. If you really dissect that behavior, that should drive your product selection, your shopping environment, your innovation, your investments.
Also, the mindset to be curious. We too often want to generate the hypothesis and prove it with our own data, which is a sample of one. This curiosity of truly looking –what we used to call it duct tape research – where are they modifying their behavior because there’s a need in the market? That could be in retail, that could be a product solution. But look for that duct tape, look for the modified behavior that we can go in and solve for them because we’ll win them for life if we do that well.
Then innovation. Any business investment takes risk. In business today, this is probably one of the biggest challenges, that risk is hard to take. We come up with this great idea and we don’t even let it get air because we’ve talked about all the reasons why this can’t work. We have a saying, when a new idea is put out on the table, let’s wow this to life instead of how-ing it to death. Because in innovation, you need to give an idea room to breathe and grow.
The final learning is you have to test it. In today’s environment, you have to test, learn, refine, scale. We have that cycle, that operating rhythm down inside of Ace.
