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Here’s how Westlake Ace Hardware CEO George Smith describes the Lenexa, Kan.-based chain’s Project North Star: “It’s our vision for the future of Westlake and the foundation for all the decisions we make.”
It might sound intangible, but it’s as real as the brick and mortar in the chain’s 88 stores. According to Smith, the business-optimization plan launched in January 2010 factors in everything the new-and-improved Westlake Ace Hardware does. The North Star plan has brought about substantial changes to both the culture of the Midwestern hardware giant and the physical operations of the stores. A key initiative is the effort to own home repair and maintenance, which is emphasized with the new tagline: “Small projects. Big know-how. Ask away,” — a message promoted on endcaps and company circulars.
Specific in-store service guidelines were instituted and measured. Merchandising was fine-tuned, leading to the creation of a signature lawn and garden department rolled out to 25 stores this spring. Project North Star was the impetus behind the updated paint department — currently being tested — and the introduction of Craftsman tool departments to enhance selection. And the merchandising changes are supported by training initiatives.
“All of these things working together have had a very positive impact on our business,” Smith noted. And above all, the program has also led to quantifiable results even in a difficult business environment. Smith points to game-changing strategies and traction in the market. Plus, comp-store sales were up 3% in 2010, and are running up 4.5% so far this year.
For its bold organizational makeover and its commitment to customer service and quality operations, Westlake Ace Hardware has been named the 2011 Retailer of the Year, an award it will accept May 11 at the Golden Hammer Awards breakfast event in Las Vegas during the National Hardware Show.
Home Channel News talked to Smith about succeeding in the hardware business.
Home Channel News: What made you start looking at your business in a critical way?
George Smith: This was a time in the industry of a lot of cuts, and people were hunkering down. We realized that we weren’t going to grow in store count — no one was doing that, but we could use the downturn as an opportunity to really look under the hood of our business.
HCN: And where exactly did Project North Store come from?
Smith: Mike Sweeney of Hawn, Johnson & Morrison [Westlake owner] said, “You need to make sure that your strategy is really well defined, that the organizing principles of how you’re going to operate your business are very well articulated, and that everyone throughout your organization knows what they are.”
HCN: Did you think you had high marks in that regard?
Smith: I think like a lot of businesses, we needed improvement. We had a mission and a strategy, but we hadn’t stepped back and refocused it. So we went out and talked to all our associates, our managers, our district managers, our field staff, cashiers and all the way up and down the line. We talked to our customers, external constituents like Ace, and others. We tried to get a real good feeling for what the consumer thinks about us for, what are the really good things they like, and what they didn’t like, what did our associates think about us, what did they think we needed to do better or [what we were] doing well.
HCN: What were the big changes in focus?
Smith: The legacy that we’re neighborhood stores and committed to the communities — we need to make sure that comes out very strong. One of the things is, we said: “We’re going to be a customer-first organization.” We were a task-oriented company before in the field, and that’s not unusual for a retailer. So we said we have got to change that focus, and we have got to focus on the customer first. And we did that, and we developed our mission statement: ‘Keep homeowners’ homes running smoothly.’ We’re going to make sure we have expertise in our stores, and we’re going to make sure we train them effectively.”
HCN: The tagline “Small projects. Big know-how. Ask away.” has a nice ring to it. Was that your idea?
Smith: (Laughs) No, but it was a brilliant idea. We had consultants working with us and they came back with four, five or six approaches to our brand promise, and we really didn’t like any of them very much. Finally, another consultant — Linda Goodman — facilitated coming up with this. “Small projects. Big know-how. Ask away.” We heard it, and we thought, “Wow, this really makes sense.” We fell in love with it.
HCN: What are some of the physical changes in your stores that your customers will notice?
Smith: One of the first things we did in our stores was to clean up the clutter that traditional hardware stores seem to have. We made it easier for our customers to shop in our stores. We also implemented new signs and planograms throughout our stores. We are targeting signature categories of Paint, Lawn and Garden, and Tools for department updates in terms of products, layouts and design.
HCN: What’s the idea behind your lawn and garden strategy?
Smith: Last year we tested eight Lawn and Garden Centers, and we have rolled out 25 centers this spring. We are reinventing the live goods area, the nursery areas. We put in new fixtures and new signage to boost the atmosphere. We also have new technology in those centers. We have electronic scanners to help the customers with checkout. We also changed our tactics around product assortment. Where we used to have trees and shrubs, today, it’s really all about color. Our mantra now is “no bloom, no room.” It’s a very visual department with high-velocity products.