Ace Wants To Be The Place For E-Commerce

Ace Hardware President and CEO David Hodnik will announce this week a major E-commerce venture that will allow the international hardware cooperative to capitalize on the growing opportunities presented by the Internet. Hodnik will outline the strategic initiative to some 2,200 Ace retailers on the opening day of the company's fall convention in New Orleans, Thursday, September 30.
     Ace Hardware's E-commerce enterprise, OurHouse.com, is scheduled to be launched in November. To realize its E-commerce objectives, Ace has formed a strategic partnership with Our House, Inc., to produce an industry-first "home solutions portal" that will combine products, projects, information, service, installation and an on-line community.
     Ace will serve as the key minority stockholder in the company, acting as the fulfillment house and provider of total home improvement project solutions for consumers by initially offering some 22,000 individual products. The number of products offered on-line will grow substantially throughout the upcoming year. The site will target total project solutions for do-it- yourself enthusiasts and home remodelers.
     Consumers will have the option of purchasing a wide selection of items directly from the OurHouse.com Web site or by visiting participating Ace stores with in-store kiosks -- scheduled to be in place April 2000 -- for instant access to the site. Prior to introduction of the in-store kiosks, individual Ace stores will offer consumers on-line products via store Web sites launching in December. A store locator identifying participating Ace stores will be featured on the site.
     OurHouse.com will be aimed at different products and solutions from typical home improvement outlets on the Web and targeted toward project-oriented upscale consumers who will spend an average of $75 per online transaction, according to Hodnik.
     The site offerings will encompass more than regular Ace catalog items. Consumers will be able to click on a specific category such as decorative lighting and then select from a listing of lighting project options, ranging from changing bathroom fixtures to installing track lighting. The site will then list all the items necessary and instructions on proper completion of the project.
     Hodnik says Ace Hardware's 5,100 independent retailers stand to benefit greatly as result of the initiative. Each Ace retailer meeting prescribed criteria will receive a free in-store kiosk for special orders, services and Web site connectivity right from the retail sales floor. They also will receive commissions from product sales generated from their individual store kiosks and Web sites approximately equal to 60 percent of gross profits adjusted for direct expenses.
     Commissions also will be earned on service providers, while consumer traffic will be driven toward participating stores for assembly, pick-up, delivery and returns on certain items. Oak Brook, Ill.-based Ace Hardware Corporation is a dealer-owned cooperative comprised of more than 5,100 independent Ace retailers in 62 countries. Ace's 1998 wholesale sales reached $3.1 billion and retail sales topped $13 billion. Ace has 15 distribution centers located across the United States and two in Canada operated by Ace Hardware Canada Limited, a subsidiary of Ace. An eighteenth center is planned to open in the fall of 2000 in Loxley, Ala. SOURCE: Ace Hardware Corporation
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