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Battling the BIG BOXES: Turner Ace Hardware’s 4 success strategies

By Linda Segall    

Whenever a “big box” store—such as a Walmart, Home Depot, or Best Buy—announces its intentmike turner to come into a community, small business owners cringe. They fear the fallout of the big box presence: lost customers and revenues.

Some businesses, however, have found ways to succeed despite sitting in the shadow of these monoliths. Turner Ace Hardware is one of them.

Mike Turner, owner of two Ace franchises—one in Jacksonville Beach off A1A and J. Turner Butler Blvd. and the other on Atlantic Blvd. near Hodges—admits, however, that when Home Depot and Lowe’s entered the picture, his businesses felt the fallout. Yet, his Ace stores continue to serve their communities as they have done for more than 50 years.

As Turner describes his family’s half-century retail journey, it becomes apparent that endurance and success have resulted because Mike Turner and other Turner family members have done four things:

• Taken advantage of opportunities,

• Remained flexible,

• Differentiated their stores, and

• Delivered great customer service.

Taking advantage of opportunities

“The store started with my grandfather, A. J. Sr.,” reflects Turner. “He had been selling Fords at Lynch-Davidson Ford downtown, but he saw an opportunity to go into the hardware business for himself. He sold his house on the river by Fort Caroline Monument and built a store with an apartment above it in the Arlington area. That’s how he got started with an old-fashioned hardware store, with barrels of nuts and bolts in the aisles.”

Other opportunities, including becoming an Ace franchise in 1963, came along as the years passed and Turner’s father got into the business. Those opportunities included buying, selling, and building other stores and expanding into new business areas.

After Turner’s father got into the business, the original store was moved to a new location in Arlington. “That happened in 1972. That store is still standing; my brother owns it,” said Turner. (His brother Steve recently opened another Ace franchise in Fernandina Beach.)

Turner himself got into store management at age 20, when the family bought a store on Normandy Blvd. “It had basic hardware and a garden shop, but we sold a bit of feed and a lot of fencing, something I didn’t know much about but I learned,” he says. The Turners sold that store several years later when a retired steel executive wanted to get into the hardware business. “He lived his dream for a little while, but it got the best of him.” says Turner with a smile. “The hardware business isn’t something you retire into.”

When an outdoor nursery with 2.5 acres and a True Value store on the property came on the market, the Turner family saw a new opportunity. “We turned the store into an Ace,” relates Turner. That was our first venture into outdoor nursery. We’d had garden shops on the sides of our stores, but never a true nursery. That put us on the map in nursery in a big way.”

Opportunity knocked again in 1995 when property became available in Jacksonville Beach. Turner’s father bought five acres and built the biggest store building codes would allow—50,000 square feet with a garden shop. In 1999 the family did a repeat by acquiring property at Atlantic and Hodges and duplicated the Beach’s store on it. “We didn’t know exactly how we would use such a big building,” said Turner. “But we didn’t want to make the mistake we made earlier at our Regency [Atlantic and Southside] store, which had been on a good corner. It originally was a small building, and over the years we kept adding onto that store so we could offer floral and a garden center. The old building became a conglomeration that didn’t look very appealing. We didn’t want to have the same thing happen…adding on like that. So we built big in Jacksonville Beach and on Atlantic and Hodges.”

Remaining flexible

Flexibility is the ability to bend. In retail, that means being able flex with the times and economic conditions.

“One of the best decisions we made was to become an Ace franchisee,” says Turner. “Ace allows you a lot of latitude. You are not required to buy anything from them, although it behooves you to buy everything that Ace offers because they have the buying power, since they have 5,000 stores. But the good thing is that Ace encourages you to bring in other things to serve your neighborhood.”

Not only can the store add items, it can also subtract items, too, something Turner has been willing to do to remain competitive, because of the economy as well as because of the proximity of Home Depot, Lowe’s, and even Super Walmart. “You have to watch your inventory closely,” he says. “If you see that something that turned over four or five times a year is now only turning once a year, you have to reduce the inventory or eliminate the item. You have to know what’s making you money and what’s not.”

Turner has also been willing to recognize when it is time to “fold his hand.” The family had a store in the Regency area (Southside and Atlantic) for a number of years. But when Home Depot came in with a new building, the family recognized the rambling old store had seen its better days. The location was prime, however, and they sold the building and real estate to buy property and build a new store at Atlantic and Hodges.

Similarly, as the economy turned south and Lowe’s joined in the big box battle on Atlantic Blvd. near his store on Atlantic and Hodges, Turner assessed the store’s strengths, trimmed it down to an appropriate size, and leased 30,000 of its 50,000 square feet to Lifestyle Family Fitness. Owning the property instead of renting gave him options, he says. Likewise, owning the Arlington building and land behind it gave the Turners another option for income: They put up a stretch of warehouses behind the store, which have provided a “nice monthly income.”

Differentiating

Although Home Depot and Lowe’s attract some of the same customers as Ace, in some respects they are not direct competitors, says Turner. That’s because Turner has successfully differentiated his stores from all the others.

“We don’t carry lumber; never have,” he says. “And Home Depot caters to commercial trade—maybe 60% or more of its sales are to contractors. We only have about 10% commercial.”

Turner takes full advantage of Ace’s corporate policy that lets individual stores carry items specific to its constituency. He watches trends and seeks out quality products he thinks will sell. His stores carry high end patio furniture, as well as spas and outdoor kitchens. Home Depot carries those items, too, but not the same quality. “We go to furniture shows in Chicago, the Merchandise Mart in Atlanta, and grill shows in Orlando to find higher end patio furniture,” he says. “When customers buy from us, they can get custom-ordered fabrics. They can’t do that at the big boxes. Customers get what’s on the floor. They have no choice, something we give.”

Customer service

Another way in which Turner differentiates his businesses from the big boxes is through excellence in customer service. “You try to give what they don’t—customer service,” says Turner. “You make sure when people come in, they are greeted and let them know you are happy they are there.”

To provide that high level of customer service, Turner prides himself on hiring mostly full-time employees. “We do have some part-timers,” he says, “but we try to keep as many full-time people as we can. We feel we get a more loyal person that way. If someone is here making a living, they are more apt to give it their all instead of someone who is here temporarily. And it’s expensive to train new people, so we don’t want turnover.”

Turnover has not been a problem, especially in the management ranks. His managers have been with him a long time—20 years in Beach’s store, 10 in the other. “They are familiar with the products and make sure employees get trained,” says Turner. That training is important, because customers rely on Ace employees for advice on not only what they need to buy but how to use various products. “If the person who’s waiting on you can’t answer your question, there will be someone in the store who can,” promises Turner.

Ace offers training programs, but Turner makes sure his employees get training on products local customers want, such as shallow-well pumps. He says a vendor put together a training program on pumps for his employees. It was so popular that it had to be repeated.

 “Training is constant,” he says. And it is through training that he makes sure his stores reflect Ace’s slogan—“the helpful hardware place.”. “If anything,” he says, “that’s what makes us different from Home Depot.”

Most customers would agree.

Linda Segall is editor of Advantage: The Resource for Small Business. She can be reached at Linda@advantagebizmag.com or 904-677-2463.

 

SIDEBAR 1

Competition among Ace franchises?

Turner Ace Hardware is a franchise operation, operating in two locations: 13164 Atlantic Boulevard Jacksonville, and 784 Marsh Landing Parkway, Jacksonville Beach.

A few miles down the road from the JAX Beach store is Proctor Ace Hardware in Ponte Vedra. And Steve Turner, Mike’s brother, operates an Ace store on Arlington Rd., as well as one in Fernandina Beach. There are several other Ace stores within the Jacksonville area.

Do they compete with one another?

“Not at all,” answers Turner. “Ace is good about not saturating the market with franchises. The stores are far enough away that we do not compete. Customers go to store closest to them. Very few will go out of their way to go to another store, unless the one they visited doesn’t have what they need. We actually advertise together because it makes good business sense.”

SIDEBAR 2

How Turner Ace Hardware endures

Turner Ace Hardware has survived numerous economic recessions as well as the onslaught on big box stores. Its endurance is directly related to the Turner family’s willingness and ability to:

• Take advantage of opportunities,

• Be flexible;

• Differentiate; and

• Provide top quality customer service.


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