Ace Hardware Insert Test Passes With Flying Colors

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Thanks to a test insert program targeting a new consumer segment in May, Ace Hardware's Chicago-area stores saw paint and paint-supply sales climb 24 percent compared with the same period in 2003.

The 4,800-store wholesale cooperative generally relies heavily on inserts because "they are cost effective," said Colleen Donahugh, print, production and co-op manager at Ace Hardware, Oak Park, IL. "Inserts have a very broad reach at a very low price per impression."

Ace decided earlier this year that it needed help testing the effectiveness of its ad insert program and also wanted to test new customer segments.

After consulting with Vertis, which provides advertising, media and marketing services, it decided on a test targeting its newspaper inserts using psychographic data. Vertis, Baltimore, prints more than 40 percent of the 575 million inserts Ace distributes annually.

This was unusual because normally with insert advertising, "demographics and psychographics are not involved," Donahugh said. The ZIP codes surrounding a store usually form the basis of an insert program.

To find the appropriate new consumer segment to target, Vertis used research from its annual Customer Focus study, which tracks consumer behavior across industry segments such as home improvement, furniture, grocery, sporting goods and home electronics as well as media that include ad inserts, direct marketing and the Internet.

"We learned through Customer Focus which consumers were using the hardware co-op or other types of options in the marketplace, as well as who were do-it-yourselfers, who were planning a painting project and who were interested in painting and that type of thing," said Janice Mayo, senior vice president of national sales and marketing at Vertis.

Vertis then analyzed those groups in its RISC AmeriScan, which uses a personality segmentation system to analyze the sociodynamic profiles of respondents.

Vertis found an untapped consumer segment that would be attracted to retail destinations offering home-decorating solutions. The market was "slightly younger and more affluent than Ace's core customer, who tends to be middle-class, middle-income and slightly older," Donahugh said.

The insert test targeted both groups: 40 percent of the roughly 2.5 million inserts went to Ace's core customers while 60 percent went to the new target.

Vertis then looked at newspaper zones and chose those with the highest potential for the core customers and for the new targets. Ace focused on the Chicago market, its largest U.S. market, with 155 retail stores. Newspapers used were the Chicago Tribune and Chicago Sun-Times, along with their networks of suburban papers.

Ace used different inserts for each segment. Both aimed to spur paint sales. They were designed to get customers into retail stores May 14-17. Vertis handled design and development as well as the media planning and placement, print and distribution.

Identical products were highlighted, and both were eight-page inserts, but each had a different creative execution.

"The core customer responds to price, product and value, so their cover was a screaming deal of 'Buy Two, Get One Free,' which really emphasized the free offer," Donahugh said. "The other group, however, responds more to an idea that 'these are types of things that I can do,' and had a woman on the front cover painting a wall."

The color palette in each insert differed for each target group, she said.

"The core customer responds to stronger colors while the new target responds to softer, more trendy colors, so those are the color schemes we chose for each group," she said.

Donahugh attributed the bulk of the results to the new target group.

"I think we connected with a target that generally does not look to Ace as a place where they would shop for their paint and paint supplies," she said. "I think they think of us as a hardware store, and not necessarily when they are thinking of home décor."


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