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THE GROMMET EXPLORES PHYSICAL OPPORTUNITIES: The company is expanding its retail presence at Ace Hardware stores, with test flagship locations and a catalog.

It's not easy to become a grommet, which is what the creators of The Grommet call the innovative products on their website. But for those that make the cut, the experience can be life changing.

Now the creators of The Grommet, backed by their majority stakeholder Ace Hardware, are exploring their own ways to grow this entrepreneur-focused brand with various retail options.

Jules Pieri and Joanne Domeniconi, co-founders of The Grommet, have launched more than 2,500 products since they began their e-commerce site in 2008, counting items such as S'well reusable water bottles, SodaStream beverage makers and FitBit activity trackers among their introductions.

"We look at 300 ideas a week," explained Pieri, who is also the company's CEO. Products that are considered for grommet status have to be distinctive and meet specific criteria: solving a problem, introducing a new technology, providing a new way of thinking about an existing product. About a quarter of The Grommet's products fall into home and housewares-related categories, like Lake Art, a 3D wall-mounted rendering of a body of water that was the top product from last year.

Out of the hundreds products from entrepreneurs they consider weekly, just 20 or 30 will warrant moving to the next stage, which includes getting samples, testing them and vetting the producer's story and claims.

"There's almost an investigative journalism aspect to it," said Pieri, as they look into the product's functionality and the company's values. From the beginning, she said, they wanted to distinguish themselves from big e-commerce players and the products they post online.

"Most of large e-commerce is buyer beware," said Pieri. "We're the opposite because we lend our reputation to this process." She said although it can be costly and disruptive, they will pull a product at the last minute if they find it doesn't live up to its claims.

Once a potential grommet passes the vetting process, they then do a pre-launch test with 10 percent of the site's email community to gauge the reaction. This not only gives The Grommet data on the viability of the product, but keeps the maker from being overwhelmed with orders. "We don't want to slam someone with demand they can't handle," said Pieri.

And demand is likely to grow since The Grommet has undertaken several actions of late to raise its own profile.

In early October, Ace Hardware acquired a majority stake in The Grommet. While the owners and the management team at The Grommet retain their equity ownership in the business, Pieri said, teaming with Ace opens up a whole new customer base for The Grommet's entrepreneurs.

"The Grommet's product discovery model inspires us to think beyond traditional hardware categories and explore new categories and brands," said Maya Schultz, merchant of product innovation for Ace Hardware Corp. "The e-commerce platform allows us to test the product for the Ace retailers and bring to market those new products where we know there is an engaged consumer."

A new product at an Ace Hardware store, with its thousands of SKUs, may be lost in the crowd, said Pieri. "Innovative products can't always stand out on their own," she said, "but our Grommet displays help."

Ace has 250 innovation incubators in stores that provide a pipeline for some of The Grommet's products. Pieri said of the many items placed in The Grommet displays there were some expected successes, but a few big surprises as well.

Among the surprises were the Duke Cannon men's grooming line--not a usual category for Ace--and Soggy Doggy pet-drying towels and related products, although many more hardware stores are now carrying pet-related items. Not surprising was the acceptance of the Tub Shroom, a mushroom-shaped plug that prevents long hair from clogging a drain.

"As the sales results of the innovation incubator stores materialized, we realized we had a unique opportunity that serves the core DNA of both companies: we exist to help small businesses thrive," said Schultz. "Together we can offer makers and entrepreneurs an e-commerce and a brick-and-mortar platform that can set them on a path of meaningful growth while simultaneously offering differentiated products to more than 5,000 local Ace Hardware stores."

About 55 percent of what The Grommet introduces is relevant to Ace Hardware stores, Pieri said, many of which include large housewares and gift sections. And it's likely that some products that garner success at Ace's The Grommet displays will make the transition to planograms for all 5,000-plus Ace outlets.

For the 45 percent of products that aren't a fit for Ace, Pieri said there remains a market among the company's online community and its other wholesale clients. The Grommet began its wholesale business in 2014.

Another way The Grommet is building a retail brand is with its own stores. Still in the testing phase, Pieri said they opened a shop at the Natick Mall in October, which has a six-month lease, and in November debuted a pop-up shop on Boston's Newbury Street. Both stores are a means to test The Grommet's brick-and-mortar retail operation. "We see ourselves as a media company first," said Pieri, "not a retailer. But this helps with awareness."

Stores, she said, are about finding customers. The Grommet has had an easier time of discovering makers and entrepreneurs, but with 30 percent national awareness, it now it wants to build the brand and develop a customer base for its grommets.

The company has also dropped a catalog for the first time, reaching out to 500,000 active and lapsed customers and another 250,000 unknowns. "Catalogs are making a comeback," said Pieri. "A lot of digital-first companies are finding success with catalogs." In addition, there's a new brand campaign of social media and display ads promoting the intriguing process of discovering grommets.

Looking at an even bigger picture, Pieri said The Grommet's three-year plan includes having a true store-within-a-store at Ace Hardware, opening 10 to 20 flagship retail stores and breaking into a least one international market.

By Joanne Friedrick

1 Ace Hardware, which now has a majority stake in The Grommet, has featured innovation incubator displays in some of its stores.

2 The Grommet store at the Natick Mall in Massachusetts.

3 Co-founders of The Grommet Jules Pieri and Joanne Domeniconi.

4 The interior of the Natick Mall store, which opened in October for a six month test run.

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Title Annotation:retailNEXT:
Author:Friedrick, Joanne
Publication:HFN Home Furnishings News
Date:Jan 1, 2018
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