OPE+ talked with Ace Hardware team members Matt Flentge, director of marketing, and Brandon Boyle, director of merchandising, to learn more about the company’s growing sales of outdoor power equipment.
OPE+: My neighbors and I talk about where we shop, Ace or Lowe’s or Menards. But that’s mostly hardware and home repair focused. I’m not sure Ace gets into the discussion when we’re considering power equipment. We have a good local OPE dealer nearby. Where does power equipment rank in your world?
Matt Flentge, Ace: Over the past seven to eight years, outdoor power has become more of a focus within our four walls. We carry Stihl, we carry Ego, we carry Toro, Milwaukee, Dewalt, Craftsman. You talk about all the big brands within outdoor power, they fall within our group and there are no other retailers that you could say that about. So yeah, there’s no doubt it’s an extreme focus for us. Our growth in that category over the past five to eight years has been really good.
Brandon Boyle, Ace: One of our biggest growth drivers has been in the power world, whether it’s outdoor power equipment or power tools. We carry the same brands that you’ll see at big box stores, with a few exceptions. We’ve come so far in growing our market share and continuing to chip away at some of our competitors. And you’re only going to see it continue to rise. Hopefully we see more of your friend network talking about Ace. Whenever we typically see a customer go somewhere and they make their first purchase of a brand, we tend to all of a sudden get, oh, I’m going to search for an Ego blade. And all of a sudden, Ace pops up because our locations are right in everybody’s backyard. That customer is now coming over to Ace and converting.
OPE+: Stihl is interesting to me; they’re adding zero turn mowers and I don’t know how you’d fit one in the Ace store in my neighborhood. How do Ace Hardware stores manage that?
Flengte: A lot of creativity. We are rolling out a program called Elevate Ace and it’s a new store format that creates these brand shops or stores within a store for some of these bigger categories like outdoor power equipment, grills, power tools to create this brand experience.
We’re giving stores an opportunity to create this experiential space. Sometimes that involves the front sidewalk of a store if we have to get really creative where you have a smaller footprint. I mean, a lot of our stores are 5,000 square feet, but they still do really well with zero-turn mowers or even more of that contractor-style product because they’re utilizing that space to the best of their ability. Or they’ll have a garden center where they can put some of their equipment.
Boyle: I’ll tack on there and say when you look at our format and what makes us different against some of our competitors, we can be nimble, we can adjust to market conditions quickly. We don’t need decision holders at the top waiting to make an answer for a retailer to execute an action, such as go stock these zero turns, go put them on your front sidewalk, go after that market.
OPE+: But with a 60-inch mower, it’s literally just a product that a lot of Ace Hardware owners can’t stock, right? What have you learned from each other in that way, Ace and Stihl?
Flentge: It’s limited right now because it is so new for Stihl. We’re not just going to go let all 11,000 retailers sell a $30,000 zero turn right out of the gate. They’ve done a good job going after the right retailers. It’s critical to have somebody who is knowledgeable on that sales floor to actually go and sell that product. Every time you come into an Ace store there’s a Red Vest ready and willing to talk to you about anything. And we have experts there, somebody that actually knows what they’re talking about with a $30,000 piece of equipment. You’ve got to make sure you’ve got the right folks trained to be able to sell those.
OPE+: These are all localized decisions, how to serve their market, whether it’s pellet grills or snowblowers, right?
Flengte: The beauty of a co-op model and being small business owners is they ultimately have that decision. They can customize it based off of what’s going to work within their market, which means they can go deeper into Stihl and carry those $30,000 zero turns, or they don’t have to. And we have AceHardware.com and the ecommerce business within outdoor power equipment is really strong. So even if stores aren’t able to have the space to carry it all, there’s still the availability that they can order it through AceHardware.com and have it fulfilled. You know, somebody’s going to drop it off at their door. It’s not going to be a box truck that drops it at the end of your driveway.
OPE+: Beyond sharpening lawnmower blades, how do these retailers handle vehicle service, mower repairs, chainsaw work and other service?
Boyle: When we look at some of the challenges that exist in the market, I think service is one of them. You look at the independent dealers, unfortunately, we’ve had a decline of independent retailers and specifically outdoor power specialists that offer full engine repair and services, and that’s continued to decline. Our big box competitors are not in that space.
A big opportunity for us and what we really strive for is how far can we take the service element and how far can we build upon it because somebody has to do it. Our stores have embraced jumping into service. We have more and more retailers every year that are not just doing basic things like, oh, you know, I’ll help you unspool a jammed up trimmer line. They’re working on carburetors. Our vendor partners are very supportive in making sure we’ve got warranty programs and being able to have support. A majority of stores are doing some basic service, and then we continue to grow that base of full-on engine repair. Let’s rip it open and let’s figure it out for our customers.
OPE+: Related to that, how are the store owners doing with that? I know staffing shortages are an issue throughout power equipment retailers.
Boyle: I think as we look at getting into services more deeply, it has remained challenging, but it’s unique. Because there’s a lot of technical schools with folks that are hungry to get in and start learning and developing. You might only get somebody for two years or you might create a lasting relationship where somebody wants to continue and work for your service center for years and years. But there is a shortage of that type of skill set and it can be tough for certain markets especially if you’re in a very rural market that just the population density can be challenging.
OPE+: I want to talk about landscaping and lawn care for just a minute. You introduced the ACE YardRx program. Does it factor in equipment and actual hands-on work at a site?
Flentge: We launched YardRx this year. Basically you enter your address, it shows an overhead view of your house and your property, takes into account how much product you would need based off of potential grass area. It gives you a prescription or subscription of products that you would need to maintain that lawn. And in the future, yes, I do see that at some point in time we will roll this out to other categories or incorporate other categories. Obviously power equipment going right hand in hand with lawn care and the fertilizer/control side of the business.
Flentge: We have a lot of Ace Rewards customers out there that we can help prescribe or recommend products that would be useful for what types of projects that they’re doing. I think OPE is probably the natural secondary progression from that program.
OPE+: Talk a little bit about the customer mix overall and how much, how many pro users are shopping at Ace Hardware stores?
Flengte: Specifically to the OPE side, it’s a decent balance. It’s definitely not 50-50. It’s probably more like 80-20. That’s 80% being your general consumer and then 20% being the landscaper or the pro. I think what’s interesting about this category is it doesn’t have to be this grand, huge business. A lot of different versions of a pro consumer or pro user in this space, but I think we set ourselves up really well to attract both. I mean, you think Stihl on the very pro end of things, even from a battery side between Stihl and Ego, there’s a really good pro landscaper quality of equipment that across both of those vendors and we stock all those products. So I think we’re set up really well to be able to handle the service of the pro. But the bulk of our business still sits with the residential consumer base. Yeah, I think everybody’s trying to go after pro and it’s hard.
Interview edited for length. Check the complete audio file in the OPE People podcast.