Ace gets it, I don't think True Value does: Analogies for commercial district revitalization

Gina Schaefer and Marc Friedman plan to open a fourth D.C. hardware store. (By Susan Biddle -- The Washington Post)
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This entry was inspired in part by an entry in the Life in Mt. Vernon Square blog.
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Logan Hardware, an Ace Hardware affiliate, started in Logan Circle, opened a store in Glover Park, then Tenleytown, now plan a fourth store in Chinatown (Chinablock) according to this article from the Post, "Hardware Made a Little Easier," subtitled "Simplicity and Service Meet D.C. Residents' Needs."

Ace Hardware and True Value Hardware are co-operatives, where there is a national "company" that does buying, marketing, and development, but each store is individually owned.

It's a different model from Home Depot or Lowe's, where all the stores are owned by one company, so both individual store operations as well as the national branding, buying, product distribution, and store development functions are managed and executed by the same company.

This difference is similar to downtown and neighborhood commercial districts when compared to malls. Traditional commercial districts have buildings and stores owned by individuals. A mall is owned and managed by one company, has common marketing, and standard leases requiring standard hours and other requirements.

An independent commercial district may have a BID, merchants association, or Main Street program to provide overall marketing development and other support, or it may not. This can be a competitive disadvantage compared to shopping centers.

Plus, one major difference in any case, is that the shopping center managers develop a business and marketing plan with a specific vision for the retail stores offered, and they don't deviate. This can never happen in an environment when the properties have so many different owners, and when many of the businesses are independently owned. They don't have common hours, and they don't usually have one master marketing plan, even though the associations probably do general image development advertising promoting the district.

One advantage in that you have independent businesses which are truly unique compared to shopping centers, which for the most part, have the same kinds of tenants regardless of where you go (although this depends on the income demographic--malls in upscale areas have a different tenant mix than malls in middle- and lower-income areas). But there are still disadvantages.

Getting back to Ace vs. True Value.

Ace understands in the competitive environment that they face, that they must be more purposeful in developing stores (and their brand) in order to compete in the big box hardware and lumber sales environment marked by Lowes and Home Depot. Ace assists the opening of new stores in targeted markets, provides a merchandise credit of $215,000 to these stores, and assists in financing. Meanwhile, True Value appears to be much more laissez-faire, relying seemingly on high-quality business owners with their pulse on the market.

Some of the strongest independent hardware stores in the region are True Value affiliates (such as Strosniders in Maryland, and Fragers on Capitol Hill.) But when the business owners don't have those skills, True Value is stuck.

E.g., they are likely to lose the Dupont Circle store they have, because their co-op member won't consider a basement location--meanwhile a relatively new mostly underground Ace Hardware store in Chicago is doing very well. And other TV stores in DC need to better respond to competitive conditions and opportunities. (And True Value's national office doesn't respond to detailed emails...)
A basement location for Logan Hardware in Tenleytown. Photo: Mark Gong, Washington Post.

If Ace Hardware is smart, they'll snap up the store space that District Hardware rejected--see the letter to the editor in yesterday's Post, "Changing Times in Dupont Circle," by John Phillips, the owner of that building, responding to the recent Post article about changing retail in Dupont Circle, "Life in Dupont Circle Takes a New Turn."

Which I also blogged about in "Dupont Circle's changing retail environment covered in today's Post ."

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