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Scoring with stores within stores

GIVE AND TAKE The Verizon Wireless set up in Nettle Creek Ace Hardware, benefits both businesses.

About four years ago, a representative from Verizon Wireless approached Gary Schuette, owner of Nettle Creek Ace Hardware in Hagerstown, Ind., about set ting up a Verizon business within his 13,000-square-foot store.

“They were very aggressive in our marketplace, and they came to us because we had a strong customer base and consistent foot traffic,” Schuette said. “In our store they were going to get seen 300 times a day, as opposed to five or six times a day in a stand-alone store.”

According to Rick Long, manager of indirect sales for Verizon Wireless, Nettle Creek Hardware was a perfect spot for his company to make inroads into Wayne County, which is about 60 miles outside Indian a polis. “You look for retailers that are already set up and have people coming through their doors all the time,” he said. “In the case of Gary, we saw great potential, and it’s worked out well for us.”

The deal offers benefits to Schuette as well. It brings new customers into his hardware store who are looking for Verizon Wireless products and services, it allows him to offer something that the vast majority of the U.S. population uses, and it brings in new revenues, as Schuette gets paid based on performance and accounts opened.

To stay on top of the latest developments, Schuette and his staff do online training, check the Verizon internal Website and are in contact with account managers on a regular basis to learn new programs and procedures. The Nettle Creek staff also does a follow-up call with customers to see if their service was satisfactory and to remind them to send in rebate forms.

Sometimes the Verizon counter—which takes up 160 of the store’s 13,000 square feet—is so busy that two or three Nettle Creek employees are working it at the same time. Overall, things have gone so well that Schuette recently opened a free-standing Verizon store about 45 minutes away in Yorktown.

“Would I have believed we would be doing this kind of business when we started this four years ago? No,” he said. “It’s been a great niche for us.”

According to Bob Dearing, director of sales planning for True Value, operating a small franchise within a hardware store can be a strong boost to business, bringing in new customers and new revenue streams. He said many co-op members are taking advantage of such opportunities, with everything from Radio Shack to UPS to Starbucks. De a ring also noted that a franchise should be placed at the back of the store, since it forces people to walk through the hardware aisles to get to it.

Another popular franchise opportunity in hardware stores is Bass Pro Shops, which offers hunting and fishing equipment and apparel. Dearing said this is a “natural fit” for many hardware stores, especially in rural areas. “It’s all about foot traffic,” De a ring said. “If you add a Verizon or Radio Shack to the footprint, at the end of the day, you’re going to see a lot more people coming into the store.”

Taylorsville, N.C.-based Mc Leod-Feimster Ace Hardware has an Exxon gas station next to it that it leases to another company, as well as self-storage buildings on premises and U-Haul truck rental services available in the store. General manager Troy Smith said it’s important to give your store as many opportunities as possible for more income in this competitive market. “I feel we get a lot of traffic because of these other business opportunities, and that’s a big advantage,” he said.

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