A generation ago, before the era of big-box home improvement centers, most communities had hardware stores. Some were father-and-son operations, even if they carried a nationally-recognized sign over the door. What they all seemed to share was the ability and willingness to deliver quality customer service.

“Everybody has their Ace story,” says Dana Kevish who, as Ace’s e-commerce marketing manager, is charged with revamping the iconic brand’s web presence.

Headquartered in Oak Brook, Ill., Ace Hardware is a cooperative of more than 4,800 independent stores in 50 states and more than 70 countries. J.D. Power and Associates ranked its stores “Highest in Customer Satisfaction among Major Home Improvement Retail Stores” in 2007.

Even though there are countless loyal Ace customers, Home Depot and Lowe’s hold the majority of the hardware and home supplies market share. Today, Ace Hardware faces the daunting challenge of competing with the big boys on the streets and, perhaps equally important, on the web.

“Our struggle being a co-op … is just getting [store owners] to understand the web is a new place for people to shop and that most consumers don’t think of Ace when they’re looking for products online,” Kevish says.

Ace didn’t intend to be late to the e-commerce game. In fact, nearly a decade ago it entered into a $100 million joint venture with OurHouse.com, giving the e-commerce-focused company access to its 1,000 vendors and 17 distribution centers. OurHouse.com sold the merchandise online and handled returns.

At the time, industry analysts praised Ace for the move, but OurHouse.com went out of business in 2001, forcing Ace to bring its website in house.

At that point, the website “was just for information only,” Kevish says. “We were not selling. We did allow consumers to research just a handful of our products, not our full warehouse stock products. It was really just to have our name out there.”

Ace website re-launch
Ace hired GSI Commerce in 2003, attracted by GSI’s holistic solutions and portfolio of retail clients, which now includes Toys “R” Us, GNC, Dockers and Polo Ralph Lauren. The new AceHardware.com launched this past February.

Ace Hardware has more store locations than Home Depot and Lowe’s combined. The owner-operated stores tend to have smaller footprints than their big-box rivals and, more important, are as distinct from one another as they are from their competitors.

The competition “can essentially issue orders from headquarters and people do what you say,” according to Fiona Dias, executive vice president of partner strategy and marketing for GSI and a former chief marketing officer for Circuit City. “It just doesn’t work that way when you’re running a buy-in cooperative: The store manager is the store owner and he or she can do whatever they want.”

Ace’s website was not built to compete with its stores; rather, it is meant to enhance the brand and work in concert with the stores, and GSI wanted to convey Ace’s “helpful” image in its online brand positioning.

“Ace is more of a local touch and a helpful touch,” Dias says. “It’s almost like a blast from the past when you actually could get help in retail stores, and the site emulates that positioning.”

AceHardware.com is content-rich and simple to navigate, but perhaps its best feature is the store-locator mechanism. Such features typically prompt customers to enter their ZIP codes; Ace uses Google Maps technology to read the customer’s IP address and automatically display store locations in the area. On the right-hand side of the results page is a bold red number indicating the number of local stores.

“The stores love that because it immediately says, ‘There are 22 stores right next to you,’” Dias says.

Ace’s independent operators can also customize their own AceHardware.com page and target customers within their radius. “In theory, 4,800 different store managers can put up their own photographs and their own promotions and their different store hours,” Dias says, “and I think that was very helpful for operators to feel like they were part of the process.”

Approximately 70 percent of Ace’s online sales are picked up in stores, an “industry-leading” figure, Dias says. That makes store owners happy, because it provides additional opportunities to upsell, to influence a purchase and to build a customer relationship.

Local store benefits
The local Ace store gets a portion of all online sales originating from its territory, and if one of its Ace Rewards members buys elsewhere in the country, it receives a portion of those sales, too.

To drive traffic to the website, Ace uses Google AdWords and various banner ad campaigns. The result is 50,000 unique visitors daily, and about 70 percent of online sales can be traced to online marketing efforts.

“There are a lot of people searching for bigger-ticket items than what they think they’ll find in one of our local stores, so we’re selling a lot of grills, patio furniture and storage sheds,” Kevish says.

Ace’s local targeting “definitely has a ‘gee-whiz factor,’” Dias says. “They have done a really nice job leveraging what the web is good for, which is sorting through lots of products, but also bringing customers to stores,” Dias says. “This is where the local touch really makes a difference. I do think they are really an innovator and a leader in the industry.”