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This podcast series is dedicated to interviews with industry leaders from the retail, wholesale, and vendor sides of home improvement retailing. Get insights into the trends and challenges confronting retailers in general and in particular the dealers who sell products and services for building, repairing, and renovating homes.
Episodes
Saturday Dec 17, 2022
Saturday Dec 17, 2022
Michael McLarney, Hardlines President and podcast host, interviews Derek Smith, Vice President of Ace Canada.
Key Takeaways:
[:38] Michael welcomes Derek to the podcast and introduces the topic, Ace Canada.
[1:01] Derek has been with Peavey for 15 years. Peavey acquired Ace Canada three years ago and Derek has been with Ace Canada since then.
[1:18] Ace Canada had been the wholesale operation of RONA Lowe’s Canada, serving ACE dealers, before Lowe’s divested itself of Ace.
[1:56] Derek explains why Peavey acquired Ace Canada. Peavey had been considering growing their hardware store presence in the country.
[2:14] Peavey had integrated Ontario’s TSC farm and hardware stores into their line a couple of years earlier. Adding the over 100 Ace stores to their line was the next step. They fit into Peavey’s roots of smaller communities in the prairies in the West.
[3:31] Peavey is based in Red Deer, Alberta. TSC Stores were based in London, Ontario. Peavey maintains both offices. Red Deer is the HQ and London is a regional office.
[3:58] Peavey and TSC are corporate stores. The Ace locations are wholesalers, which is a pivot for Peavey. Derek says the background functions are not that different. The same teams are doing the same work, making it an easy transition for Peavey. Everything Peavey does is to try to improve its relationship with all customers, retail and wholesale.
[5:38] Derek talks about the Ace customers’ responses to the transition to Peavey. For some, it has worked out well, and for some, it has been a challenge. Ace Canada had gone through several hands in the past. Peavey wanted to bring stability to the banner. The Ace brand tests very well in surveys in Canada, even where people don’t know there’s an Ace store near them.
[7:25] In the transition, some Ace dealers didn’t sign on with Peavey, and some closed or sold to other interests. Peavey dropped some dealers that didn’t align with their business. Peavey acquired some dealers, as well. Peavey is focused on building that brand and giving a good, compelling reason for dealers to want to be with Peavey.
[8:45] Derek discusses the marketing strategy for Ace. Not every solution works for every dealer. They don’t force a model on dealers. There are three variants of Ace Canada stores: building centers, farm & ranch, and hardware stores. Peavey has added some products to accommodate different stores.
[10:55] Derek talks about having Ace private label products in the stores to set them apart from other stores.
[11:30] Derek explains how Peavey works with Sexton Group for building materials and lumber for home centers.
[12:36] Dealers move between banners depending on the market, their business, and even the family ownership. Sexton gives Peavey robust experience with building supply.
[14:11] With the right opportunity, Peavey sometimes acquires small-town privately owned stores and converts them to corporate stores. They are not looking for numbers but for productive stores that generate revenue.
[18:15] After the amalgamation with the Ace Canada banner, Peavey’s focus was on the existing dealers and making sure they were looked after. Derek says that will always be the focus. Peavey likes to remember where they come from. They won’t ignore the current dealers to bring on someone new.
[19:26] The growth is going to come from right across the country. They will work where the interest lies. Over the last three years, a dozen more dealers have joined. The Ace name recognition has a lot of people thinking about coming on.
[20:28] There is interest in Eastern Canada. A cluster of four dealers in Nova Scotia has come on board. There is now also a Peavey Mart in Bedford, Nova Scotia.
[22:28] Ace U.S. is known for training programs and customer service. Having the Canada license gives Ace Canada access to pretty much everything Ace does. Ace is a sophisticated organization. Derek visited the headquarters near Chicago to see how they approach business. Training is big, with online learning from the Ace Learning Place, which is exciting for dealers.
[25:04] Dealers see inflation as a huge concern, including the cost of transportation with fuel surcharges. Dealers face the challenge of trying to sell to their customers for a fair price without appearing to be gouging when the cost of goods is so high.j Peavey faces the same pressure.
[26:31] Peavey at first did not have an online ordering portal for dealers. They built one from scratch in under six months. They have recently had the dealers vote on what improvements they would like to see in the system. Peavey is working on those improvements now.
[27:44] Derek explains how Peavey provides bilingual support for their Ace dealers in Quebec. Their dealer support team is 100% bilingual in French and English without an accent as far as Derek can tell. There are translators in the offices and all material is sent to the dealers in both languages.
[29:14] Derek sees really good potential for growth for Ace Canada. There is an appetite for options and Ace can be one of those options for a lot of dealers. There is considerable interest in the Ace Canada banner. They would like to serve communities that don’t have much now. Queries are coming from everywhere in Canada from the Arctic to the U.S. border.
[31:11] Peavey is becoming a national company. They have most regions of the country represented. They continue to grow and push where it makes sense and the moves are beneficial to everyone. Ace Canada considers the dealers to be their partners in business and value the relationship. They want to get to know their dealers and for the dealers to know them.
[32:12] Michael thanks Derek for being on What’s in Store.
About Us:
What’s in Store is a podcast series of the Hardlines Information Network, brought to you by RDTS: Innovative strategies to maximize your ROI.
Resources:
Quotes:
“We’ve always aspired to want our customers to love us, so everything we do is designed to try and improve the relationship we have with any customer, whether it’s a retail customer or a wholesale customer.” — Derek
“Every dealer’s business is different and unique. We recognize that. We know that they’re all different. We’re not trying to force a model down anyone’s throat.” — Derek
“We’ve actually added … a number of SKUs back in that had sort of fallen off previously. We believe strongly in having private-label product in those stores. You have to have something that makes you different and unique and that’s one of the ways to do that.” — Derek
“Tracking those movements amongst banners through the years at Hardlines, we realize that there’s no one size fits all for everybody. It’s a very personal choice, depending on the market, the business, and the family ownership.” — Michael
“We run corporate stores quite well. We’re successful at it. We’ve got stores right across the country. … We’re not interested in numbers. … The number of stores you have is irrelevant if they’re not productive and they’re not generating income and revenue.” — Derek
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