Competitive StrategiesFeatures

Expanding Delivery Options to Compete with Online Sellers

Blackhawk Hardware in Charlotte promotes free store pickup or delivery for online orders.

Blackhawk Hardware in Charlotte promotes free store pickup or delivery for online orders.»

Hardware retailers, like all other types of U.S. retailers, are finding that consumers—and some commercial customers—are buying more merchandise on the internet. So how are they going to compete? This ranks as the number one problem conventional retailers are facing today.

It is easy for someone to order online and have the merchandise delivered to their home or business, thus avoiding the need to go to a retail store, walk the aisles to find the merchandise, go through the checkout process and then take the product home.

Online sellers have been working hard to shorten the delivery times, with some, such as online giant Amazon, offering next-day delivery in most parts of America and same-day delivery in select cities. This shortened delivery time has made online buying even more attractive.

Ace Hardware Corp., which is celebrating its 95th anniversary this year, is trying a variety of ways to help its 4,600 dealer-owners compete. What Ace is currently stressing is for members to offer customers a series of delivery options that enable customers to buy online, from Ace itself or from its dealers, and have the merchandise delivered or picked up at the store without having to go through the find-it, pay-for-it process in person.

Many Ace dealers have been offering buy-online, pickup in store on their own. This process, known by the acronym BOPIS, is also offered by many other retailers, including giants like Walmart. This option has been promoted by Ace for more than a decade. In the past, Ace said that 80 percent of online orders utilized BOPIS.

Ace management has been working to broaden the delivery options and is now using its website to announce them to the world. On Acehardware.com, it now offers three options: Free store pickup, Delivery from Store or Ship to Home. It calls Delivery from Store BODFS. This strategy was announced in the summer and by late September 2019, about 60 percent of its stores were participating.

These delivery options, Ace believes, are helping its dealers be more competitive with Amazon and all the other online sellers. Dealers participating in these programs are enjoying online sales 62 percent greater than non-participating stores, Ace reports. Ace’s overall web sales were up 59 percent through late September 2019.

Delivery from Store is available only at participating Ace stores. Customers can find the products they need online and have them delivered by a helpful Ace associate as early as the same day if the customer is trying to complete a project quickly, wants to get larger-sized items to home or job site or if the customer just cannot make it to the store for the BOPIS offer.

Ace’s website outlines all the details of the program, including the few limitations, such as delivery distances, which vary by store, but must be within the local store’s trading area. Schedules are arranged, and in some cases, unattended delivery is possible. During the online checkout process, a delivery date can be established.


University Ace in Oviedo, Fla., has a designated spot for in-store pickup of online orders.
University Ace in Oviedo, Fla., has a designated spot for in-store pickup of online orders.»

Ship-to-Home is completely different. Customers shop their local store on acehardware.com, select the item or items and then will learn if the item can be shipped to their home. Next day or two-day shipping is available for customer selection. Standard ground shipping arrives in three to eight business days.

There are shipping costs for this service and those charges are shown before final checkout. Charges vary based on weight of the total order. Multiple-item orders get a discount. As a further incentive, Ace Reward customers whose purchase is greater than $50 receive free next-day or two-day delivery.

What makes these programs possible is the fact that when anyone goes to Ace’s website, they have access to local inventory from all Ace stores and Ace distribution center inventory.

If a customer orders from the Ace website and a local store does not stock the item, Ace can supply it from its various distribution centers. Ace President John Venhuizen says Ace has $2.2 billion of inventory within 15 minutes of 75 percent of U. S. homes and businesses. An additional $1 billion of inventory is available for BOPIS within two to seven days.

Ace is offering expanded delivery options for online orders such as ship to home or delivery from store.
Ace is offering expanded delivery options for online orders such as ship to home or delivery from store.»

As one might expect with a base of more than 4,000 U.S. stores, many Ace retailers are supporting the new delivery programs and reporting encouraging results.

Proctor Ace Hardware, with three stores in the greater Jacksonville, Fla., market, reports that each of its stores has been getting several delivery orders a week, mostly for delivery only. Very few are for assembly of products as well.

Much more successful is the store’s experience with BOPIS, with Joe Proctor, co-owner, reporting that each of their stores are getting between 20 and 30 online orders a month being picked up in each store.

Proctor says he believes Ace’s efforts in offering assembly and/or delivery to customers is one way to establish better relationships between retailers and their customers.

Randy Grace, an Ace dealer with two stores in Michigan, believes Ace is making the right moves to make shopping convenient for customers by offering multiple ways to buy online, in addition to buying in the stores themselves. As a smaller retailer, however, he thinks making deliveries might entail some problems such as the need to purchase a delivery vehicle. However, he is willing to embrace the concept.

Most retailers realize that when customers buy online and do pickup at a store, it gives them an opportunity to establish a relationship with that customer. Many times, the buyer is someone who has not been a regular customer, so the retailer or an employee can greet the person, ask if they need any help with the product or project, and can encourage them to take advantage of the store’s broad inventory and employee knowledge.

Richard Baalman Jr. of Rick’s Ace Hardware & Garden Center, with five stores in Illinois and Missouri, says they were a pilot store for Ace’s new delivery program and they do three to five deliveries a week, while also averaging about 20 in-store pickups per store over the past six months.

“I believe we are in the infancy for how the consumer views service. We will continue to see folks demand faster and better buying options including same-day delivery. Retailers like myself will need to continue to redefine our model in order to meet these demands, if not we will die,” Baalman says.

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