Ace Hardware's Major Investment in This Underused Marketing Strategy Reaped Huge Returns Ace Hardware's recent outreach strategy is not just winning over customers but is also attracting a record number of prospective franchisees — And it landed the brand at #5 in this Year's Franchise 500.
By Margot Boyer-Dry •
This story appears in the January 2024 issue of Entrepreneur. Subscribe »
To view our entire 2024 Franchise 500 list, including category rankings, click HERE
Started Franchising: 1976
Total Units: 5,813
Cost to Open: $579.4K-$1.9M
Have you seen a lot of Ace Hardware ads lately? There's a good reason — the brand increased its digital ad spend by $23 million in 2023, and as a result saw a 17% bump in digital business. Because 90% of online orders are placed for local pickup or delivery, most of those customers went straight to their local Ace.
It's no wonder that in 2024, Ace plans to increase digital marketing by another $25 million.
Moves like this help Ace compete in a crowded hardware market. "We're not the biggest, but we'll be the best," says Ace president and CEO John Venhuizen — and in Entrepreneur's ranking, Ace has accomplished that mission. This is Ace's ninth consecutive year as No. 1 in its category, and its fifth overall appearance in the Top 10. It was No. 7 on the ranking last year.
Related: Focusing on These 2 Key Areas Helped Ace Hardware Capitalize on the Pandemic Sales Spike
While Ace invests heavily in increasing national brand awareness, its true power lies in its hyperlocal attitude.
Ace Hardware wants its franchisees to think and operate with a degree of uniqueness, catering to the neighborhoods they serve. As a result, no two stores have the same footprint or product selection, and many even have unique names. In Oakland, New Jersey, for example, you'll find Oakland Ace Hardware — the result of an independent hardware shop, Oakland Hardware, converting to a franchise. There are similar stores nationwide.
The way Ace sees it, the brand is capitalizing on the people consumers trust — their neighbors. "Who do you think is going to provide better service?" Venhuizen asks. "The local folks sitting next to their customers at the Rotary Club meeting, or a store manager under a corporation that gets all the profits far away?"
That hyperlocal thinking also leads to local convenience. The brand had 5,813 units globally as of July 31, 2023 — an increase of 139 over the previous year's count — and 4,926 of those were in the U.S. This means that 75% of Americans live within 15 minutes of an Ace store, which Venhuizen says helps Ace fulfill orders faster than its competition — and with a more personal connection.
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That personal touch extends even to the employees who make deliveries. "More often than not," says Venhuizen, they'll ring the doorbell and say, 'Are there questions you have about this?'"
That doesn't just impress customers; it also impresses future franchisees. Ace says its unit growth is driven both by new and existing owners, and that it's seeing historically high levels of interest. More than 200 prospective franchisees attended its convention in September.
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