Ace Hardware and True Value satisfy customers, Home Depot not so much

Discussion
Photo: True Value
Jun 06, 2019
George Anderson

When it comes to satisfied customers, no two home improvement retailers do it better than Ace Hardware and True Value, according to the 2019 Home Improvement Retailer Satisfaction Study from J.D. Power.

Ace and True Value, with scores of 840 on a scale of 1,000, were co-ranked in first place, followed by Lowe’s (834), Menards (833) and Home Depot (823).

The rankings were based on customer satisfaction across five areas: merchandise, price, sales and promotions, staff and service, and store facility. A total of 2,433 customers who had made a purchase from a home improvement retailer between January 2018 and February 2019 took part in the research.

One of the key findings of J.D. Power’s research is that 41 percent of customers research or shop online before going to a home improvement store to make a purchase. This group of consumers also spend more ($620 annually) in home improvement stores than individuals who do not go online to conduct research before making a purchase.

While online sites are a popular destination for home improvement store customers, overall satisfaction with these sites is lower (821 on a scale of 1,000) than manufacturer sites (823), image or video sharing sites (832) and social media (869).

Amazon.com and other e-tailers also pose a threat to retailers whose business foundations have been built on physical stores.

“Online retailers do introduce new competition, but when traditional retailers get their online/offline formula right, they are able to really differentiate by offering a level of personalized knowledge and expertise that cannot be replicated in an online-only environment,” said Christina Cooley, At Home Intelligence Lead at J.D. Power.

Ultimately, home improvement customers are looking for help when they enter a store. J.D. Power’s research found that two minutes is the maximum amount of time that customers expect to wait before receiving help. Those stores where an associate began helping a customer within that window saw a 67-point improvement in their overall satisfaction stores. Only 26 percent of customers, however, reported receiving assistance within two minutes.

Speed is great, but a key differentiator is knowledgeable associates. Ace and True Value stood well above the competition in this respect, according to J.D. Power’s findings. Ace has ranked at the top for customer satisfaction for 12 of the past 13 years. True Value, which matched Ace this year, is the only other home improvement banner to have earned the distinction.

“We are humbled to receive this award which reflects our Ace owners’ passion for their neighbors and the outstanding service they and their red-vested heroes seek to provide every customer, every time,” said John Venhuizen, president and CEO of Ace Hardware Corporation, in a statement.

In an email to RetailWire, True Value CEO John Hartmann said the wholesaler is investing in its independent partners, including “returning over $250 million of equity” to retailers to put back into their businesses. “Clearly their investments are paying off,” he said.

DISCUSSION QUESTIONS: What factors do you think are most critical in satisfying customers in home improvement retail today? What legacy retailers are doing the best job when it comes to adapting to changing consumer behavior — specifically, going online to research home improvement purchases before shopping in a store?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I walk into Ace and there’s someone asking me if I need help. I walk into Home Depot and someone wants to sell me a credit card."
"These results aren’t all that surprising. If you inverted the list you would probably have the rankings contractors and other professionals would give these stores."
"The ultimate mark of retail success is when customers go to your store without any online research. That’s what “loyalty” is all about."

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27 Comments on "Ace Hardware and True Value satisfy customers, Home Depot not so much"


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Mark Ryski
BrainTrust

Finding staff who can provide answers is key in the DIY home improvement market. It’s not surprising that ACE and True Value have performed better than the big box competitors for two reasons: 1.) dealer owned and operated stores and 2.) smaller footprint stores make it easier to serve customers. Doing online research before a store visit is typical of many if not most purchases today, so there’s nothing new there. However it does speak to how important getting the online/offline service right is.

Ian Percy
BrainTrust

I generally agree with you, Mark. However, I think this “online research” factor is way overrated and not at all typical in this context. I suggest the main reason one goes to an Ace or True Value is to pick up some screws or washers, a new blade for your reciprocal saw, plaster stuff to patch a wall, maybe some irrigation tubing because you put a shovel through the tubing again (an Arizona thing), etc. Do people really do online research on that stuff? The ultimate mark of retail success is when customers go to your store without any online research. That’s what “loyalty” is all about.

Karen McNeely
Guest

Ian, if they are talking about people who spend $620 annually on average, they are probably buying more than screws, washers or plaster. I agree, you likely don’t need an online search for that, but if you are looking for more decorative items (faucets, vanities, knobs etc.) you are going to want to do some online research on selection rather than running around to a number of stores, even if you are very loyal customer (Full disclosure, my partner has flipped homes and I’ve been his purchaser for such things.) Ace or True Value can certainly have this kind of loyalty for homogeneous items such as those you mention. For other items it’s harder to earn such loyalty.

Ian Percy
BrainTrust

You are right Karen, on all counts. If someone is going to spend $399 on a BBQ or thousands on sinks and faucets for a remodel, they are going to search around. That reported $620 annual spend, I assumed, includes all home improvement stores. Easy to see how, at Lowe’s or HD, that buying a washer and dryer, carpeting or kitchen cabinets is what brings that average up. I’d be shocked if the average annual spend from ordinary customers at an Ace Hardware is anywhere close to that. I did find that the median (not average) customer spend at a typical local hardware store is $22. Couldn’t find what the annual spend is.

Bob Amster
BrainTrust

Available help and advice; deep merchandise assortment. It’s too simple!

Shep Hyken
BrainTrust

Ace Hardware calls themselves the “Helpful Hardware Place.” There is a difference between friendly service and helpful service. In-store support at a smaller store like Ace is stronger than at its big-box competitors. There is also the convenience of the smaller footprint of the store. The customer gets in and out much easier. Same with the parking lots. You add the physical convenience to the knowledgeable associates and you have a winning combination.

As for the online research, that’s exactly what it is … research. Being able to confirm what the customer has learned with an “expert” gives the customer confidence in the store. A good store associate won’t just help a customer find what they are looking for, but will ask questions to make suggestions on how to do the project even better.

Jeff Sward
BrainTrust

You nailed by saying the key differentiator is knowledgeable associates. When I shop in any of these stores, I invariably have a question. How? Is this the right tool/widget? Why is quartz better than marble? I may not know the answers, but I pretty quickly can determine if the associate knows their stuff. HD associates usually do, but just try to find one. More than once I have walked the aisles looking for an orange vest, only to sometimes hear “not my department.” Having said all that, it’s not like HD has a point score in the 600s. HD has good to great people, just not enough of them.

Dr. Stephen Needel
BrainTrust

Ace is the place with the helpful hardware man. They also package hardware in ways we use hardware, not always in the way they want to sell hardware. Sell me the two screws I need, not a pack of 12 (hear that Lowe’s? Home Depot?). And put more people on the floor. I walk into Ace and there’s someone asking me if I need help. I walk into Home Depot and someone wants to sell me a credit card.

Richard J. George, Ph.D.
BrainTrust

The big box stores often fail to provide the “local knowledge” and problem solving approach of Ace and True Value. Knowledgeable and empathic associates in-store make a difference.

Ian Percy
BrainTrust

Bob Amster has it exactly right — this does not take much analysis to understand the Ace and True Value rankings. Knowledgeable and readily available associates is not “a” key differentiator, it is THE differentiator. You can’t go three feet into an Ace Hardware without running into someone who can help you. Yup, you can save a couple of bucks here and there by going to a big box, but I often find it’s simply not worth the time and drive. These local home/hardware stores may well be the ultimate example of how to do retail.

Dave Bruno
BrainTrust

There is no mystery here: DIY shoppers need knowledgeable help, and they need the products they need when they need them. Local hardware stores like Ace and True Value do typically staff their stores with knowledgeable and helpful staff, but their selection obviously pales in comparison to the big box stores. The big boxes are winning despite the lack of available, knowledgeable help and, as the research indicates, they have lots of headroom to improve conversion rates/average transaction value if they can find a way to improve the quality and availability of help in the aisles.

Ed Rosenbaum
BrainTrust

The difference in my opinion is as simple as the difference between being an employee and being treated like a member of the family. The big box companies like Home Depot, etc. are staffed with employees; and they are good at what they do. But their role is the role of an employee. Ace and True Value make their employees feel like they are part of the family and treat the customers like they were their friends. It isn’t rocket science to want to give outstanding customer service.

Mohamed Amer
BrainTrust

YouTube has become a how-to video haven for DIY projects. However, as one-way communication it cannot compete with a live interactive conversation in your locally owned DIY store like Ace Hardware and True Value. Compared to big box competitors, it’s more than pointing out which aisle has the item, but about helping the customer find the right product and the nuances of getting the job done easily and safely – it’s not rushed nor overwhelming. It’s about asking the right questions and as Shep mentioned, not just being friendly but being helpful.

Ryan Mathews
BrainTrust

These results aren’t all that surprising. If you inverted the list you would probably have the rankings contractors and other professionals would give these stores. Home Depot just isn’t built for somebody who needs four, two-inch “S” hooks in the same way Ace isn’t the right store for somebody framing out a garage. So the question is, which customers are you trying to satisfy? There’s the professional, the highly skilled amateur, the hobbyist, the gardener, and the general consumer looking for screws, nails or a pint of stain. As to online, again, which customers are you talking about? Somebody looking for a new bathroom vanity may look online, but somebody plumbing a new bathroom as part of their business probably does not.

Ian Percy
BrainTrust

Exactly!

Cynthia Holcomb
BrainTrust

As a frequent hardware store customer, Home Depot is in full court press with many associates working the vast caverns of the store seeking shoppers who are lost to redirect them. And usually this is where it ends. Unless one gets lucky and accidentally runs into someone with knowledge of the needed solution. Ace is small and has super friendly associates assisting in solving small hardware issues at home. Bottom line, knowledge versus selection. In-store is far and away better than online research. I know from hours of online research and printing out product spec sheets, only to not be able to find the products in stock.

Oliver Guy
BrainTrust

Home improvement is really tough. Where we used to once go out to get a specific screw, and perhaps buy something else as well, we now source the screw from Amazon or eBay – cutting the store traffic.

True Value has the benefit of being locally owned which means localization of assortment and also the overall customer proposition without it being mandated by head office. The concept of “voice of store” back to head office is tough to achieve – I wonder if getting this right is part of the solution…

Georganne Bender
BrainTrust

To be fair, I have also received great service at my local Home Depot store, but Ace Hardware wins this award year after year. It’s nice to see True Value right up there with them.

It’s hard to compare the kind of service that you get from an independent retailer with what you get in a chain store. Indies will win every time because good service is the lifeblood of their business, and the store associates know it. It’s also important to note that consumers expect more from independent service providers than they do from chain retailers.

I remember hearing Bernie Marcus, then CEO of Home Depot, (and a cool choice for keynote speaker at a competitor’s event!) speaking at an Ace Hardware convention. Bernie said when it came to services, and quickly reacting to customers needs, Ace retailers would win every time.

Georganne Bender
BrainTrust

Although, you have to admit that those scores are really close. 840, 834, 833 and 833 on a scale of 1,000 are arguably good rankings.

Doug Garnett
BrainTrust

My own experience mirrors this. Yet I am a classic promiscuous shopper. In fact, I shop at Home Depot more than I shop at Ace. Why? They have more of everything.

When I need assistance with my purchase or just need a quick in and out, then I’ll go to Ace. Otherwise, it’s Depot or Lowe’s.

We need to respect that an inherent limitation of big box stores will always be customer service. An Ace store with a couple of smart associates can make customers feel taken care of. But a Home Depot store would need far more experts to deliver that feeling.

Karen McNeely
Guest

Promiscuous shopper. Love it! Can I use it?

Doug Garnett
BrainTrust

Absolutely. I first picked it up from Byron Sharp. 🙂

Rich Kizer
BrainTrust

Well done comment Ian Percy. Not much left to say. In our focus groups one message we always hear concerning hardware/home improvement stores is: customers seem to look to big boxes for larger issues/projects while looking at stores such as Ace and True Value as local and quick answers to their immediate needs. These customers also indicated that they felt the big box stores had associates such as retired plumbers, carpenters etc., supplying important professional advice on larger projects, even though they might be harder to find. The strength of Ace and True Value and all other smaller footprints is to make absolutely sure the associates are smiling and nearly immediately available to help. And importantly the cashier, the last point of contact, is brilliant and friendly.

Ray Riley
BrainTrust

There are a lot of potential variables to this, but from a quick Google search to confirm my initial thoughts: the average Home Depot is 5x the square footage of an Ace/TV. This has to have an impact on the sense of assistance and attention that customer’s feel they receive in-store, and without question the dwell time prior to being engaged by a sales professional.

Patricia Vekich Waldron
Staff

It takes less than 60 seconds for someone at my local Ace Hardware to greet me and ask if I need help. I vastly prefer Ace’s service, advice and proximity to the breadth and depth of Home Depot’s merchandise selection.

Craig Sundstrom
Guest

My reaction is quite different than the headline. Given the (often considerable) price difference between full-service/traditional and DIY/big-box stores, the seemingly trivial difference in scores — as little as 6 points? — should be of great concern to the former.

David Naumann
BrainTrust
David Naumann
Vice President, Retail Marketing, enVista
1 month 12 days ago

Home improvement purchase are often a consultive sales, especially for complicated or high ticket items. Unfortunately, big-box home improvement stores have sacrificed service by cutting staff to manage profitability. It also seems like the knowledge level of big box associates is not as high as the “helpful” associates at Ace and True Value. If I know I need assistance with a home improvement purchase, I will seek out an Ace or True Value, but if it is a simple purchase, I will go to a big-box retailer.

From an online resource perspective, the big box retailers have done a good job of providing helpful information and video. However, many consumers would like better personalized service in the store.

wpDiscuz
Braintrust
"I walk into Ace and there’s someone asking me if I need help. I walk into Home Depot and someone wants to sell me a credit card."
"These results aren’t all that surprising. If you inverted the list you would probably have the rankings contractors and other professionals would give these stores."
"The ultimate mark of retail success is when customers go to your store without any online research. That’s what “loyalty” is all about."

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