What is more radical than leading a 100-year-old brand into the future by reinventing the legacy hardware store model? John Venhuizen, President and CEO of Ace Hardware is a radical thinker and has given his trusted brand a remarkable reinvention. Under his leadership, Ace Hardware has mastered the delicate balance between rapid expansion and maintaining the dependable neighborhood hardware store experience that has defined its brand for generations. The company continues to innovate and stay relevant to its core customers, recently incorporating a new store design aimed at improving the shopper journey.
John Venhuizen’s transformational leadership style and ability to personally connect with Ace Hardware store owners have created a strong community that builds brand loyalty. Store owners are proud to be part of the Ace ecosystem and feel they have a say in business decisions; it is their company and Venhuizen makes it clear that the store owners are the most important factor differentiating the company from competitors.
When asked how to sustain a culture of innovation, John Venhuizen says, “I think it begins by encouraging – heavily encouraging people to fall in love with problems, and then obsess over solving them. Most great ideas, products, companies, and initiatives have their origin in a smart, curious individual who fell in love with an injustice or a problem and then sought to solve it with passionate pursuit. We try to permeate that kind of pursuit throughout all of Ace while giving people permission to fail fast, adjust, dust themselves off, and try again.”
What makes him a radical? He adds, “Well, if being “radical” means being fanatical about a jaw-dropping customer experience, and nearly irrational in the pursuit of a world-class employee experience – then we hope to be found guilty as charged. Being radical might just be required for survival, let alone success. I’m proud of the Ace team for their unwavering commitment to the three battles we must wage to win the retail war, namely the best service, the most convenience, and the highest quality. In retail, customer expectations consistently evolve. Remaining relevant requires bold ideas and actions, both for our customers and our associates.”
John Venhuizen joins the 2024 roster of Crave Retail Radicals including Fran Horowitz, CEO of Abercrombie & Fitch, Sumit Singh, CEO of Chewy; Michelle Crossan-Matos, CMO at Ulta Beauty and Denise Incandela, EVP, Fashion Division, Walmart U.S. Each of these five retail radicals has the foresight, innovation, and unconventional thinking to drive their brands and the industry at large forward to exceed customers’ expectations. They drive major transformations within their respective retail brands as game-changing legacy retailers and DTC marketplace disrupters.
Elevate3 Ace
The Ace transformation was unveiled at their convention earlier this year where the company showcased its new store format, Elevate3 Ace. At the heart of Ace’s transformation is a relentless focus on elevating the brands that matter most to their loyal customers. John Venhuizen says, “By far and away – I am first and foremost so very proud of our team. It is a privilege for me to be a part of this great Ace team. With respect to initiatives, we are mighty proud of the launch of our new store concept called Elevate3 Ace, a next-generation store concept for which we will invest $1 billion to redefine the customer experience. With immersive brand shops and a focus on four core categories of paint, power, backyards & barbecue, and home preservation, this initiative represents the future of retail. We’re equally proud of our investments in digital marketing and technology, which have enhanced our omnichannel strategy. For instance, app-driven sales surged by 67 percent largely due to innovations like BOPIS (buy-online pick-up in-store) and BODFS (buy-online deliver from store). These programs make it easier than ever for our neighbors to connect with our brand and our locally owned stores.”
The customers who shop at Ace Hardware are brand loyalists and the new in-store design is engineered to appeal to them by providing immersive branded showrooms to improve the shopping experience. Traditionally, home improvement stores have been merchandised by category, not brands. Drill bits are stocked in one area of the store and drills in another in a counterintuitive approach to customer search for related products. The legacy approach required customers to wander throughout a store to find what they needed.
Ace learned through its community of store owners and shareholders that customers prefer to shop by brand. If a customer is a DeWalt fan, then in the new Ace store layout they can shop all DeWalt products in one place. During the media tour in Chicago, Dale Fennel, now President of Ace International, highlighted the success of grouping products by brand, leading to a 50 percent increase in power tool category sales.
Community Building
The cooperative business model fuels growth and community for Ace Hardware, a strategy that has proven highly successful. Local store owners buy goods in bulk and share resources including logistics and distribution. Only about 4 percent of Ace Hardware’s stores are owned by the company itself; store owners are independent entrepreneurs who are also shareholders of the corporation. The cooperative structure has been in existence since 2013 and the responsibility of the corporate offices is to help with bulk purchases and bidding, distribute products, develop global marketing strategies, and bring new store owners on board.
Ace’s community spreads beyond its store owners and customers with its Ace Hardware Foundation, a 501(c)3 organization that supports efforts for Children’s Miracle Network Hospitals and American Red Cross Disaster Relief. In addition, the Foundation oversees the Ace Helpful Fund, an employee emergency assistance fund available to qualified Ace team members who are facing financial hardship.
Steady Growth
Ace Hardware is celebrating its centennial year and has evolved from four Chicago stores in 1924 to become the world’s fifth-largest franchise, with 75 percent of the U.S. population living within 15 minutes of a store. The company opened 1,060 new stores in the past 6 years. Despite industry challenges in 2023, Ace Hardware outperformed the market with only a slight revenue decline of -0.5 percent compared to the industry’s -3.0 percent, while achieving a 6 percent increase in operating income. The return on assets was 8.2 percent in 2023.
Ace plans to invest over $1 billion in the next five years in new stores and remodeling, plus $120 million in digital advertising to support its growing digital business. The company’s loyalty program, Ace Rewards, includes 54 million U.S. households and represents approximately 60 percent of a typical store’s business, contributing to its $23 billion in total revenue across 5,973 stores. Ace operates in all 50 states and in 65 countries around the world with total revenue exceeding $23 billion.
John Venhuizen’s Radical Leadership
John Venhuizen is a 29-year veteran of Ace. Since joining the company in 1992, he has held multiple leadership positions overseeing marketing, business development, strategy, supply chain, IT, and International. His transformational leadership style and ability to personally connect with the store owners have created a strong community that builds brand loyalty. He says, “Ace Hardware is a visionary company in how we approach retail. While some might see us as disruptors, we prefer to think of ourselves as elevators – consistently raising the standard of what retail service and convenience should be. Our differentiated strategy focuses on building deep community relationships while leveraging cutting-edge tools and technologies to provide modern, seamless experiences. The Elevate3 Ace concept, our expansion of in-house supply chains, and significant investments in digital transformation demonstrate how we anticipate trends and craft long-term solutions that align with our customers’ evolving needs.”
Matthew Cry, CEO and Co-Founder of Crave Retail observes, “What makes Ace Hardware’s transformation so compelling is how John Venhuizen has harnessed the power of local insight. In an era obsessed with global scale, Ace demonstrates that success comes from truly understanding your community and customers at the neighborhood level. Their story shows us that the most powerful retail innovations often start with listening to the people who know their communities best.”
John Venhuizen’s leadership and radical innovation over the past decade have fueled Ace Hardware’s growth and is a masterclass in scaling up while maintaining brand integrity and strong community ties. The success in attracting experienced retailers to its cooperative model demonstrates the enduring value of combining local expertise with global resources. As for what’s next? He says, “Predicting the future with any sort of precision is quite difficult. Having said that, we do believe that for retailers to be successful in the future (including Ace) it will require: (i) greater access to and better utilization of customer intelligence, (ii) to become an optimized logistical machine, or an ultra, hyper-convenient shopping experience…or both, (iii) brand positioning as the lowest price value on the continuum or a differentiated, high-touch, high service, specialty retailer, and finally (iv) a persuasively compelling proposition to recruit, retain, and inspire the very top talent the retail world has to offer. At Ace, we’re positioning ourselves to lead in these areas by continuing to blend our digital innovations with the unmatched, personalized service that has defined us for a century.”
