Home Depot and Lowe’s can’t touch Ace for satisfied customers

Discussion
Photo: Ace Hardware
Jun 09, 2016
George Anderson

We’ve heard this news before. J.D. Power announced this week that consumers have ranked Ace Hardware as being highest for customer satisfaction among home improvement stores for the tenth straight year.

The study, which included responses from nearly 3,000 consumers who purchased products or services from home improvement outlets over the past year, found that in particular Ace excelled in the areas of staff and service as well as “store facility”. The survey asks respondents to grade retailers based on areas that include merchandise, price, sales and promotions, store facility, staff and service.

“Given the impressive list of retailers with which we compete, in no way do we take our tenth consecutive J.D. Power award for granted,” said John Venhuizen, president and CEO, Ace Hardware Corporation, in a statement. “My grateful and sincere thanks goes to the consumers who have honored us with this award, the Ace team who never ceases to amaze me and most importantly, our frontline, red-vested heroes who so passionately serve our customers.”

According to J.D. Power’s findings, speed is the key to customer service excellence in home improvement stores. Customers expect to receive help within two minutes of entering a store. In fact, based on the survey’s index, customer satisfaction levels drop from 850 to 782 if they are not greeted within two minutes. From there, customer satisfaction levels drop even lower if the answer to their question takes more than two minutes.

“Most often customers initially need help locating a product or have a question about the product,” said Greg Truex, senior director of the at-home practice at J.D. Power, in a statement. “Retailers that train their employees to engage with customers proactively and assist them are more likely to provide them with a satisfying experience during these moments of truth.”

Mr. Truex emphasized the need for stores to have appropriate levels of staff on hand to assist customers, particularly on weekends when customer counts rise dramatically.

Ace’s reputation for service has become so renowned that the company has sought to monetize its value by marketing it to other organizations. Last year, Ace launched its Center of Excellence, a division created to help other businesses and groups improve their customer experiences using the home improvement company’s approach. Ace offers keynote speeches and workshops to help others create their own cultures of excellence.

DISCUSSION QUESTIONS: Why do you think Ace Hardware stores, most owned by co-op members, continually lead the pack when it comes to customer service within the home improvement channel? What would Ace need to do to supplant Home Depot and Lowe’s at the top of the home improvement pack?

Braintrust
"This is a classic David versus Goliath story. The little guy, Ace, has only one way to compete against the big guys."
"Apples or oranges, it’s all share of wallet."
"Could Ace scale up size-wise and do this in a much larger format store? Who knows?"

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28 Comments on "Home Depot and Lowe’s can’t touch Ace for satisfied customers"


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Bob Phibbs
BrainTrust

Let’s be honest here. This is apples and oranges. You don’t go to Lowe’s or Home Depot looking for an Ace Hardware experience. And vice versa, you don’t go to Home Depot or Lowe’s looking for a replacement nut for your toilet like you would when you go to an Ace. Don’t get me wrong, it’s great that Ace is able to deliver, but let’s compare like to like.

George Anderson
Staff
I would draw a distinction with Bob in that I don’t think the comparison is apples to oranges between Ace and the big box chains, but more Red Delicious to Golden Delicious. When I walk into either my local Home Depot or Ace location, my questions, if I have any, are essentially the shame. The determining factors when deciding which store I go to include: My level of knowledge (If I need more help I choose Ace, which is located a little further away. My available time (during the week it would be the closer Home Depot store but weekends would be Ace, which is quicker to just pick something up and go if I know what I need and don’t require help.) Price comparisons (here is where Ace’s advertising and promotion comes in) If there is a deal at Ace combined with their knowledgeable staff that is the place I’ll shop. In the end, I’d estimate that about 60% of our home improvement dollars go Ace’s way with the rest to HD. I guess… Read more »
Tom Redd
Guest

George, if you go to the pro desk at Home Depot you will get the best answer. If 60% of your money is going to ACE, then you are spending way way too much for advice you could get at Home Depot. Just ask the pros or go to the service desk — not floor rookies. They have specialists and service desk pulls them in for you. Quit blowin’ so much money…!

George Anderson
Staff

The local Ace Hardware here is also a lumber yard and does substantially more business with local contractors than Home Depot. While it has a smaller “store” than HD – it also has attached garages with building supplies, tractors, etc. I think at issue is the perception that the cookie cutter approach followed by the big boxes applies to Ace and that is an inaccurate assumption.

PJ Walker
Guest

My time is money, Tom, and at my local HD, the Pro desk typically is overrunning with contractors and weekend DIY warriors. Ace consistently provides the fastest service at decent prices, which is why they continue to rank highest on this survey. As time becomes even more of a precious commodity, efficient and effective customer service will become more of a differentiator for physical retailers.

Carol Spieckerman
BrainTrust

Ace enjoys many advantages over the big guys, including smaller, easier-to-shop formats and assortments that are optimized accordingly. Ace’s more curated approach to retail makes providing great service easier as well. Store associates can see when shoppers enter the store and quickly identify those who need help. Its co-op approach ensures that individual stores resonate with local markets in a way that Lowe’s and Home Depot haven’t quite been able to crack. Ace has carved out a great niche and should just keep working it.

Lee Peterson
BrainTrust
This ranking is apples to oranges. Ace is a specialty store and THD and Lowe’s are big box. Not a fair comparison. It’s a lot easier to satisfy customers in 10,000 sf vs 180,000 sf. for a million reasons. Having said that, if you do comp them all, the survey is spot on. You walk into an Ace, you are greeted, then, like a concierge service, taken to the area where your needs are, shown the products and have a discussion about which piece of their assortment is better for you. Try that at a big box! I don’t know of anyone who doesn’t prefer to go to Ace but the issue is, they don’t have the depth/breadth of assortment that either of the boxes have. They just physically can’t. This example and the credit Ace gets re-affirms two things IMO: 1) the importance of the associate at physical retail and 2) the precarious position box stores are in (i.e. getting replaced by on-line/home delivery). And DIY is a vertical that’s prime for disruption. As… Read more »
Chris Petersen, PhD.
BrainTrust

The whole is greater than the sum of the parts, but when it comes to Ace, the place to start is with PEOPLE! Ace simply doesn’t view staff as a labor cost. They invest in them as a strategic differentiator. The results show up in the JD Power survey, as well as in loyalty measures and repeat trips to stores.

Ace is one of the few retailers that strategically differentiates based upon their slogan: “Ace is the place with the HELPFUL.” While Ace may not have all of the variety of building supplies like the other big box retailers, they do have the people trained to help you find a solution.

While other retailers can replicate your product assortment, it is very hard to replicate quality consumer experience and service. It is a real testament to Ace’s quality that their Center of Excellence is a benchmark for service excellence, much like Disney’s workshops.

Shep Hyken
BrainTrust

This is a classic David versus Goliath story. The little guy, Ace, has only one way to compete against the big guys. It’s not price and selection, although Ace’s prices are somewhat competitive, and always fair. It’s the personalized service that they deliver. They go to great lengths to properly train the store’s employees. What’s amazing about this is that the stores are individually owned and operated, but somehow are in alignment with the “helpful” culture. The owners of these stores know that if they don’t deliver the service, they will be beat. Ace at the corporate level has created an excellent training program that also includes mystery shopping and certification.

As long as Ace keeps doing what they’ve been doing so well, they will continue to survive and thrive in the midst of larger competitors.

Kim Garretson
BrainTrust

My own impression is that Ace shoppers either know that the stores are “owned” by a local operator and thus the staff reports to one of their neighbors, or the experience conveys this (and thus the focus of Ace advertising). So they compare this “feeling” and experience when visiting Ace stores, with their experience with associates at the big boxes, who are often, in my experience, rather “tired” retired folks who came there from unrelated careers.

J. Peter Deeb
Guest

Ace is the best! The people proactively seek you out and ask if they can help, not to mention the cashiers who routinely welcome you to the store as you walk in! I can be in and out of my Ace with my purchase in much less time than it takes to find a competent person in the large DIY stores. The employees are well trained in all departments and don’t hesitate to explain usage of items and recommend choices.

I don’t believe Ace wants to be a Home Depot or Lowe’s — they have a great niche and customers who will spend a little more for better service and time saved. As long as they stay true to their mission they will remain very successful.

Patricia Vekich Waldron
BrainTrust
Patricia Vekich Waldron
Retail and Marketing Expert; Former IBM Executive
1 year 7 months ago

I love my local Ace Hardware store. Their service is stellar and they are part of the downtown community where I live. The stores are easy to shop and the assortment curated. While they are indeed a different concept, scope and scale than Big Box Lowe’s and Home Depot, I will choose Ace first any time I can.

Tom Redd
Guest

Curate assortment? Next visit look for some old, old packaging for some items that have a .10 turn rate. They hold seasonal stock at end of season and put it out the next year (at some ACE stores). Good store for your area, but the old, non-franchised hardware store is what ACE tries to be. Still far from it. Millennials love ACE — they were never in a real hardware store.

Larry Negrich
BrainTrust

It would be an interesting experiment to have Ace open a test store with the footprint the size of a Home Depot to see if they could successfully extend their hands-on, high-quality customer assistance approach. But the truth is, Ace and Home Depot are different models within DIY which may draw the same customers, but a different points in a project, so I don’t really see a point where Ace supplants any of the big boxes in sales. Ace carved out a good niche and is good at what it does and that is great to see.

Anne Howe
BrainTrust

In order to compare an apples to apples retail operation, ACE would have to open a large store and compete head on in several with Lowe’s and THD. But I believe they won’t and don’t really need to take that on.

Merchandise is the key differentiator for the big home chains. Ace is smart to keep talking “helpful” and making it real through customer interactions and engagement. But I find Lowe’s staff to be friendly and helpful, and even vendor reps are willing to engage with shoppers when they are in the stores.

Mel Kleiman
BrainTrust

Two questions in one. Ace leads the pack because of 3 things:

  1. Local ownership which cares about employees and customers. This means lower turnover.
  2. Training, training and more training of staff.
  3. They have a couple of companies that want to put them out of business so they have to stay sharp if they want to survive.
David Slavick
Guest

Ace has no chance to “supplant” HD or Lowe’s. The big box concept supports the contractor segment, while Ace has effectively positioned themselves through years of sound branding as the local stop for helpful advice. The Ace Hardware shopper isn’t intimidated when entering the store, and within a short time on the floor encounters a helpful hardware person inquiring as to how they can help. Not to say that HD or Lowe’s don’t have helpful associates who are willing to assist and point you to the right aisle, or make suggestions as to how you can solve that leak or mechanical issue.

DIYers are a highly opinionated lot. It is great to see that effective training and customer service orientation at Ace earns the chain the recognition it deserves.

Camille P. Schuster, PhD.
BrainTrust

Think about it from the consumers’ perspective: what do they need, do both kinds of stores have the product, are prices similar, and what kind of customer experience do consumers want? If products are available at both stores for similar prices, customer experience may be a deciding factor. If neither Lowe’s nor Home Depot offer a customer experience that competes with Ace, they are probably OK. If either Home Depot or Lowe’s offers a customer experience similar to that at Ace, the other big store will lose.

Tom Brown
Guest
1 year 7 months ago

I can’t speak for all stores, but the Ace by me has 16 year olds that don’t know anything working in it. Just this week I bought a shower handle that the kid in Ace said would fit. I had to return it because it didn’t. Went to Lowe’s and the guy in the plumbing section knew exactly which handle would fit.

Brian Kelly
Guest
1 year 7 months ago
Theoretically, the mom and pop store (Ace or True Value) is supposed to offer more personalized service, task based expertise and hyper local assortments. In reality, those stores face the same hiring challenges as THD/L. In fact, I think many local stores are budget challenged and so the store is full of kids who know absolutely nothing. The big boxes really benefitted from the recession and collapse of home building which put experts back into the stores. On top of that, the inventory can be really odd based upon what corporate wants to push into the box. And there is lots of cheap crappy goods that are intended to boost margin. These stores have middleman/corporate costs to balloon retail prices. How are those Craftsman items a deal in an Ace? What they offer is convenience. If I’m in the middle of a chore and need something to complete the project, they save me from running to the strip center. This is what killed mall-based Sears, e.g. go to the mall and buy paint? As an… Read more »
Tom Redd
Guest
First, this is a JD Powers rating. I always take these with a grain of major salt. Next, ACE is great for the rookie home owner or a renter that never compares prices. Home Depot is for the real pros — like me — that need to replace a wall and add a strut beam to a support wall. Or re-tile a bathroom and add new toilet and tub with a new plumbing location … agony! ACE stores vary in kindness, but not in printed price. The products are way way over priced and most localized store owners know it. If you need 10 nuts and bolts at over a $1 a set you can get them to knock the price down. Online the same size runs about 30 cents each. It is apples and bizarre oranges. A marketing joke that many real world home people would laugh at. Also, I have 2 boys who survived local ACE stores. One owner wanted DAILY store inventory! Huge job and done with pencil and paper. Go to… Read more »
Peter Charness
BrainTrust

Apples or oranges, it’s all share of wallet. What it does say is that there is room in the market for a high service retail model with knowledgeable sales associates who know how to engage. Whether it’s hardware or electronics is somewhat irrelevant, it’s the success of a business model that isn’t built on price, but on service.

Brian Numainville
BrainTrust

In the end, service is an advantage for Ace and whether or not this is an “equal” comparison against the bog box stores, it still centers around dollars spent on products and services in the same space. Could Ace scale up size-wise and do this in a much larger format store? Who knows? But the reality is that their model is working for them and has carved out a niche. Kudos to them!

Craig Sundstrom
Guest

I think the QOD misses the point. As others have pointed out, the idea that ACE will “supplant” — i.e. lead in volume — the big boxes is not only unrealistic, it misses what they try to do … lead in service. That they are able to do so and remain viable is to be congratulated, not re-engineered into a losing battle.

Jenn Markey
Guest
1 year 7 months ago

As a long-time partner with Ace, we are certainly excited to hear that they received this well-deserved acknowledgement. Certainly, Home Depot and Lowe’s have approached the home improvement space with a vastly different model, but they are all still competing for the same wallets and shopper dollars. While some mid-tier retailers are struggling with slipping sales and share, Ace has cleverly invested in superior data to ensure they are offering their co-op partners powerful and actionable insights, supporting their ability to consistently offer the right products at the right price for the local market. Home Depot and Lowe’s might want to take a closer look at Ace’s playbook.

Tony Orlando
BrainTrust

This discussion is like my store vs. the Walmart supercenter 4 miles down the road. We are known for great service, and custom prepared meats, and deli-bakery, and that is our calling card, along with insane in and out bargains. The supercenter is a giant airplane hanger that happens to sell a lot of groceries, and is designed to be one stop shopping, along with the presumption of lower prices. We as independents in all facets of retail generally do much better at treating our customers as guests, and they appreciate it, and yes it is an apples and oranges comparison being made here. We need more of this type of publicity, as smaller retailers are struggling to stay in business, and the corporate discounters, and online sales have decimated many small towns.

gordon arnold
Guest

Home Depot and Lowe’s do not have management at the store level with a vested interest in customer satisfaction as does Ace Hardware’s franchisees. Their interest is solely in turn, weekly payroll, inventory dollar volumes and margin with a growing interest in out-of-stock reports and inventory condition. Ace is forced to differentiate using an affluent location that will not support the Big Box stores and personal touch customer relationships for homeowners.

The true key to the overall success is in location. There are those that will point to the exceptions to this rule, but let there be no doubt to investors that this is the key. A point of interest in this discussion is that many of the Big Box stores mentioned have as many customers per day as the sample size used to determine our customer satisfaction winner. This too should be cause for concern as to the foundation and relevance of this test.

Bill Hanifin
BrainTrust
Shopping in brick and mortar is changing for all types of businesses and I suggest a “odd couple” comparison between hardware and grocery. Many shoppers today split their grocery basket among 3-4 grocers. In the South Florida market, there are distinct differences in pricing on specific items between Publix, Walmart, Aldi, and Costco that beg shoppers to shop more often, with lower average basket size, to meet specific needs. Meeting the demands of home improvement projects creates a clear path to either a large DIY chain or a smaller hardware chain such as Ace. If I am building a fence or looking for appliances, I am going to Home Depot or Lowe’s. If I’m in a hurry to finish a specific project (let’s say hanging a fan) and need a specific drill bit or other fastener hardware, I’m stopping into Ace. The difference here is that I might split a grocery basket based on lower prices by store. If I can reasonably divide my grocery needs by store to save money without wasting time, I… Read more »
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Braintrust
"This is a classic David versus Goliath story. The little guy, Ace, has only one way to compete against the big guys."
"Apples or oranges, it’s all share of wallet."
"Could Ace scale up size-wise and do this in a much larger format store? Who knows?"

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