July 19, 2005, 12:00 AM

Ace Hardware deals its retailers a new e-commerce hand

By driving more traffic to its local stores, Ace wants to get its independent operators more involved in the company’s retooled e-commerce program and help them create more cross-selling opportunities.

Ace Hardware Corp. is introducing new e-commerce marketing and merchandising programs designed to generate more multi-channel sales opportunities for its nearly 5,000 independent retailers.

For instance, Ace, which ranks No. 388 in the Internet Retailer Top 400 Guide to Retail Web Sites, recently launched a new e-mail marketing campaign that promotes the retailer’s buy-online, pick-up-in-store policy. The campaign, which Ace is directing to various customer segments in its e-mail marketing database of more than 800,000 names, offers customers 70% off regular shipping rates if they agree to make the purchase online, but pick up the merchandise at a participating local Ace store.

By driving more traffic to its local stores, Ace wants to get its independent operators more involved in the company’s retooled e-commerce program and help them create more cross-selling opportunities. “Not every Ace store can carry all the SKUs we have online, but if we can emphasize to the customer the speed of buying their new lawnmower or snow blower online and the convenience of picking it up at a local store then this can create the chance for our retailers to generate additional sales,” says Dana Kevish, interactive marketing manager for Ace.

Getting its stores more involved in e-commerce is a top priority for Ace. The company recently retooled its web strategy after a joint-venture with OurHouse.com failed to meet expectations. “We weren’t extending the brand in the way we anticipated,” Kevish says.

But Ace’s new e-commerce initiative now features financial incentives for store operators. For instance, store operators receive an undisclosed percentage of buy-online, pick-up-in-store transactions. How much a store is paid is based on a number of factors such as using an analysis of ZIP code information to determine which Ace store is nearest to the customer placing the order.

Ace is also introducing new dedicated personal computers in some stores that will let customers access detailed product information and shop more of Ace’s new line of web merchandise, which includes items such as specialty batteries, bath fixtures, lighting and decorative hardware. “People come to our stores when they have something that’s broken and needs fixing,” Kevish says. “The online hardware and home furnishings space is a big segment. We want to involve Ace stores in a web program that generates more opportunity for them.”

Ace, which had 2004 e-commerce sales of $4.4 million, is aiming for web sales of at least $6 million in 2005, she says.

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