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The Wall Street Journal reports that retailer-owned cooperative Ace Hardware Corp. “plans to spend billions in the coming years to expand its e-commerce capabilities, including a recently launched buy-online-deliver-from-store service.”

Each of the more than 5,000 Ace Hardware stores has “a small-business autonomy from the retailer-owned cooperative’s corporate branch, and more than half of them have yet to embrace the company’s online-delivery vision.” But, the story says, CEO John Venhuizen “believes the local focus of his company gives it an edge over bigger competitors such as Home Depot Inc. and Walmart Inc., which also are spending billions to shorten the time it takes to reach any home with a delivery, no matter the size.”

The battle, he says, will be fought on three fronts: “The first is service. Having local stores with local ownerships who live in, work in, and know that community better than anyone at corporate ever will is a huge strategic advantage to us.

“The second is convenience, and what we’re trying to do is exploit the geographic proximity advantage we have. Versus everyone you just mentioned—Home Depot, Lowe’s, Amazon—we have a lot more stores. We have 5,200 stores around the world in more than 67 countries, and more than 75% of U.S. households are within 15 minutes of an Ace store. We’ve got about $2 billion of inventory sitting right in the neighborhoods.

“The third is quality. We have a fanatical devotion to locally relevant, high-quality products that are different than what you can get at some of the competitors you just mentioned.”

To foster some degree of loyalty, the retailers also is using an Ace Rewards program that will mean that “you get anything you order over $50 delivered for free, all the time.”
KC's View:
Two things about this story intrigue me.

One is that Ace has more stores out there than Home Depot and Lowe’s combined. That surprised me - I had no idea - and it strikes me as an enormous advantage if that kind of footprint can be leveraged. (Hard to do if they’re all independent businesses.)

The other is how Venhuizen points out that Ace is “actually leveraging our local stores, their inventory, their vehicles and - here’s the key point - their people to do the delivery to their neighbors. There isn’t some random who-knows-who delivering the product to whip onto your porch … The person delivering the product knows what the product does, how to use it, how to start it, how to season it in. That matters. Now, sometimes it may be far less relevant, but the greater the degree of complexity, the more important the degree of knowledge.”

That’s precisely the opposite of what many supermarkets are doing, outsourcing delivery to companies like Instacart. Now, a hardware store doesn’t have the same issue of fresh foods and perishables … but I love the ideas that part of their business model is owning the delivery customer experience. That’s critical, I think, if you are going to be differentiated and successful long-term.