Is Ace on-brand with The Grommet acquisition?

Photo: Ace Hardware
Oct 10, 2017
Matthew Stern

Ace Hardware, renowned for its top-notch shopping experience, is making an acquisition that may mean more interesting items on the shelves for DIYers and maybe something new for its e-commerce customers, too.

Ace now holds a majority share in The Grommet, reported the Chicago Tribune. Since 2008, The Grommet, has made products created by entrepreneurs and inventors available online, boasting such consumer hits as Sodastream and FitBit on the site. Ace’s acquisition of the company comes after last year’s pilot of an “Innovation Incubator” in partnership with The Grommet. The trial placed displays of Grommet products in select Ace locations, with about 40 items rotating quarterly.  The most successful of those products then went on to appear in all of Ace’s stores.

While Ace has put Grommet products on its physical shelves, it’s not clear if Ace intends to use The Grommet’s web presence to reach e-commerce customers or go with its own branded e-commerce footprint.

Ace said in a news release that it did not intend to change The Grommet’s strategic direction as a champion of “the underdog,” according to the Tribune. The chain draws a connection between serving DIY home repair enthusiasts and helping bedroom and basement inventors hit it big with their innovations.

Ace has recently rolled out other pilots, pushing its already impressive customer service offering in different directions. In 2015, the company began piloting same-day delivery at 33 stores. Reports have not indicated if the same-day delivery option was successful enough to be rolled out to stores beyond the pilot.

Regardless of the success of any single initiative, Ace continues to be one of the most highly-regarded chains in the world of brick-and-mortar home improvement retail. Earlier this year, a survey of 7,800 people found the majority of customers cited Ace as their favorite place to shop when working on DIY projects. The results were based on factors like shopability and associate knowledge.

In May of 2017 the chain reported an increase in net income of 8.4 percent and expanded its global store count beyond 5,000 stores.

DISCUSSION QUESTIONS: Does the acquisition of The Grommet make sense for the Ace brand? How should Ace continue to incorporate Grommet products in their stores, and should Ace also consider new initiatives that make use of Grommet’s online presence?

"Retail will not be won by who has the best brands. It will be won by who has the most unique experiences (and the products to go with them)."
"The Grommet gives Ace a pipeline of innovation that doesn’t require investment from an R&D level. "
"Behind every DIYer is a closet “tinkerer” — most of us like to figure things out for ourselves. "

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16 Comments on "Is Ace on-brand with The Grommet acquisition?"

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Nikki Baird

Yeah, I think it does. I think there’s going to be a lot more activity in the future around maker spaces and the results of efforts from those maker spaces, and it makes sense for big chain retailers to get in on that. Another one that seems like a match made in heaven: Best Buy and b8ta. The future of retail will not be won by who has the best brands. It will be won by who has the most unique experiences (and the products to go with them).

Phil Chang

I think so. Retailers are looking for unique brands to help create experiences that makes the consumer come back. Target looks to pop-up brands and invested in Harry’s to entice men to come and shop their stores. Dollar Shave Club was acquired by Unilever, which already has a few experiential brands (like Ben and Jerry’s) as well.

The Grommet gives Ace a pipeline of innovation that doesn’t require investment from an R&D level. This is uniquely different from other brands because aside from being open-minded and not making the process more difficult, they have an incoming pipeline of new products to be able to chose from.

This might be one of the most underrated acquisitions of the year.

Mark Ryski

I think it’s an interesting move for Ace. Product differentiation is a key way for retailers to compete and, with The Grommet, Ace will have a steady stream of unique products not available elsewhere. Ace could further leverage The Grommet products in-store by forming customer trial labs and reviews of the new, best products and then feature these in broader promotional programs.

Max Goldberg

Smart move by Ace management. The Grommet can provide Ace with a never-ending stream of new products and another reason for consumers to stop by their local Ace Hardware store. The Grommet, in turn, could provide Ace with a ready-made online presence.

Ben Ball

Behind every DIYer is a closet “tinkerer” — most of us like to figure things out for ourselves. So we really admire and pull for the little guy who builds a better mousetrap. Ace has already done a great job leveraging attributes like selection and associate knowledge to differentiate from the Lowe’s/Home Depot experience. It seems like a natural for them to be the champion of inventors through The Grommet. I think this acquisition reinforces the core of what makes Ace different from the typical DIY big box store. Good move.

Lee Kent

I love that Ace is doing this. Yes, it is all about creating some excitement in-store that makes for great experiences. And what is more exciting than to check out new, innovative products? If Ace can wrap their knowledgeable associates around these new products, like they do all the rest of their products, this could make for great community also. Kudos to Ace and my 2 cents.

Adrian Weidmann

This is a great acquisition by the Ace Hardware brand. Nikki’s quote is absolutely spot on. Retail (and specifically retailers) will not be won by who has the “best” brands but rather those retailers (and brands) that offer their shoppers the most unique (and frictionless) experiences — along with the valued products.

Tapping into and supporting the local and global community of entrepreneurial products and services will resonate with today’s shoppers. Ironically, when I first discovered Home Depot, they offered an eclectic variety of unique products and as they grew their selection became smaller and more vanilla. Their success forced them to streamline their supply chain and they lost their ability to support (or interest in supporting) small businesses. This gives Ace and The Grommet a great opportunity to fill this role.

Harley Feldman

The Grommet acquisition makes absolute sense for Ace Hardware. Ace will not only be the store for shopability and associate knowledge, but the place to see some of the latest technology for the DIY shopper. Some consumers are reluctant to try out new technology, but a knowledgable Ace Hardware store associate can assuage the reluctance with knowledge and suggestions.

Now that Ace is a majority owner of The Grommet, it can use its position to help steer The Grommet in a direction of helping both companies — expanding the market for The Grommet entrepreneurs and doing trials of e-tailing that might benefit Ace. I suspect many trials will be initiated before the right formula is found to the benefit of both. Ace will be able to pick and choose those ideas that work the best.

Doug Garnett

Innovative products are key to long-term brick-and-mortar success and an excellent advantage over Amazon (where innovative products get lost). So this makes sense for Ace in many ways.

Yet leveraging innovation for brick-and-mortar strength requires two things: First, finding and stocking the innovations. But more critically, advertising the innovations — because shoppers need to be told they are there and why the innovation makes sense. Ace has struggled with advertising the innovations in their stores since each store owner is an independent. As a result, Ace hasn’t been able to leverage large enough orders from manufacturers/brands to make advertising part of a major campaign.

It’s also concerning that many of the products on The Grommet are tangential to Ace’s customer base — to the reason people go to Ace stores.

An interesting step for Ace. Turning it into a long-term success faces some serious challenges.

Robert DiPietro

Smart move for the Ace brand. It gets a clear pipeline of new and interesting products which every retailer needs to have. It will aid in making the in-store experience more fun for the consumer.

It also helps the inventor and puts the spotlight on the DIYer.

Ian Percy

I’m a little surprised at the overwhelming perception that Ace Hardware and The Grommet is a match made in heaven. Where is the congruence in that?

It’s Ace HARDWARE. Nikki is right about the importance of having unique customer experiences … BUT it has to have strategic relevance to the mothership. Retailers seem to think that as long as an idea is unique it’s something they should incorporate into their operation. That “me too” thinking and desperation to be “unique” is what is turning retail brands into retail bland. The key is to make who and what YOU are as engaging and customer-centric as possible. Heck, you can get a Sodastream and a FitBit anywhere.

In my community the only place I can go to get immediate help on how to solve a home repair problem is Ace. Not Home Depot, not Lowe’s. There you spend an hour just trying to find someone who knows what they’re doing. For my money and time … it’s ACE!

Richard Layman
3 months 10 days ago

Hmm. It’s ACE HARDware, sure. But really it’s ACE HOMEware — making your house great. (e.g., I read an interview with the person who became the CEO of Ulta and she shocked the people when she was interviewing for the job, when she said Ulta isn’t about cosmetics. They said, “What do you mean? How could you say that?” and she responding something like, “You’re selling beauty,” reminding me of the line from a Billy Bragg song: “A busy girl buys beauty, a pretty girl buys style, but a simple girl buys what she’s told to buy”).

So more “home” products can make sense, albeit the merchandising and marketing issues presented as mentioned by others.

Ian Percy

I no sooner sent in my contribution on this topic than I received The Grommet email. Yes, there was another version of an extension cord reel device which could be considered “hardware,” but the other items were a hand-turned rolling pin, goat milk caramel from Fat Toad Farm, a DIY beauty kit and an automated floss dispenser.

In no way am I disparaging The Grommet — all these items totally fit who they are and what they do. But when it comes to questioning a fit with Ace Hardware … I rest my case.

Jerry Gelsomino

I think this is a brilliant idea. It will contribute to Ace’s image as a networked group of independent operators who are nimble and looking to bring innovation to everyone.

Ricardo Belmar

Definitely an interesting move for Ace. I applaud them for adding to the overall experience shopping in their stores. This move creates more value for their customers and brings them interesting products while at the same time making the whole experience better. Whether this produces more sales for Ace will depend on how many of their independent owners take on The Grommet products and effectively promote them.

On the online side, it would be interesting to see a melding of Ace merchandise alongside Grommet products on a new website. Doing this with the existing Grommet site would only cloud the brand and confuse their customer base with the sudden shift in product mix. There’s definitely some potential here — more retailers should take note as this goes beyond just finding the right product assortment for the store and makes Ace even more competitive.

Jeff Sward

I heartily applaud this move by Ace. What a great way for them to EVOLVE. I subscribed to The Grommet after one cursory read. It’s fun, innovative, unexpected, fresh … I LEARN something with each exposure. Sometimes it’s frivolous, sometimes it’s serious. But I look forward to it. The hardware store of the future will have to help us with gadgets and gizmos and projects we hardly know enough about today. Great move for Ace!

"Retail will not be won by who has the best brands. It will be won by who has the most unique experiences (and the products to go with them)."
"The Grommet gives Ace a pipeline of innovation that doesn’t require investment from an R&D level. "
"Behind every DIYer is a closet “tinkerer” — most of us like to figure things out for ourselves. "

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