How Ace Hardware built its employee AI assistant

Last week, Ace Hardware announced that it has launched an AI assistant for employees in more than 2,300 stores. The tool is called “Hey ARMA,” referring to its Ace Retailer Mobile Assistant platform used in stores. It provides product information, project advice and recommendations, and can compare different products or help customers with products they may have purchased elsewhere.

The retailer started building the tool last year with a new team of about seven new and existing employees, Andy Enright, svp of retail strategy and operations at Ace Hardware, told Modern Retail. He said the company initially thought about partnering with a third-party developer to build it or help build it, even meeting with three external companies for proofs of concept and an idea of how long that would take, as well as how much that would cost.

Many retail executives over the past few years have faced the question of whether to build a tool in-house or find an outside software vendor to do so for them. Ace Hardware saw value in building an AI team internally — building the tool from scratch, but still leveraging third-party large language models and existing data.

The retailer, per Enright, is working on AI initiatives around inventory management as well as making operational best practices accessible through Hey ARMA. It also plans to launch a new retail analytics platform this summer and implement AI components into that.

“We decided it would be best for a multitude of reasons to build it internally and go at our own pace and build and scale this further in the future, and take more control over it,” Enright said. Those reasons, he added, included building up AI competency within Ace Hardware’s workforce and being able to apply that to other projects.

Building an in-house tool also allowed flexibility to be able to test the assistant at stores, get feedback and build a tool catered to its stores specifically. That was important, Enright said, because Ace Hardware’s stores are independently owned. As a result, the company doesn’t force all its stores to use its tool and instead has to convince each store to activate it.

The need for buy-in from local stores is why the company worked closely with them while building the tool, to make it something valuable, Enright said. For example, Enright said the assistant originally didn’t have promotions, but the development team quickly found out in stores that customers would ask a lot of questions about what products were on sale. Now, employees can ask the assistant which grills are on sale, for example.

The typical Ace Hardware store has 20,000 -25,000 unique items — plus more than 100,000 in its distribution centers — according to Enright. The assistant is designed to help employees spend less time searching through the catalog for products and more time talking to customers.

“If we can help our on-the-floor, in-store associates get answers to customers quicker — higher-quality, faster answers — that’ll increase our helpfulness,” Enright said. “Hopefully [associates] are more confident to go help customers with whatever oddball questions may be thrown their way from customers in the store,” Enright said.

Ace Hardware is far from the first retailer to give employees an AI tool for them to quickly access information. In 2024, Target announced its Store Companion, designed to answer process questions, coach new team members and support store operations management. Best Buy announced plans that same year to develop a generative AI assistant to help employees access company resources and product guides.

Greg Carlucci, a senior director analyst at Gartner who consults CMOs as well as digital commerce and marketing leaders, said employee AI assistants could be a better way to bring AI into stores than customer-facing assistants.

Having a “human in the loop” may comfort customers who are less receptive to using an AI chatbot, Carlucci said. That could be because 50% of Americans are more concerned than excited about the increased use of AI in daily life, according to the Pew Research Center. Still, they may be fine with an employee using it to help them find the exact product they need.

“If there’s a specific or nuanced question that might be specific to a user’s home or product that they have that maybe is outdated, or that the associate may not have as much background on, they can use that AI tool to help them make sure they’re given the right information,” Carlucci said.

Bryan Gildenberg, founder and CEO of Confluencer Commerce and a longtime retail consultant, said this new AI assistant helps Ace Hardware stay competitive with The Home Depot and Lowe’s. That’s because an Ace Hardware store may only have a couple of employees working there at a time who have to service multiple departments. Meanwhile, at a Home Depot, an employee is more likely to work exclusively in one department.

“What AI should enable Ace to do is to replicate some of the depth-of-category expertise that a Home Depot or a Lowe’s has, by allowing a more generalist associate to be able to answer deeper questions for customers,” Gildenberg said. “Most of the people that I’ve met that work at an Ace are pretty knowledgeable folks, but they don’t necessarily have the depth of understanding of somebody who goes to Home Depot every day and works in the paint category and does nothing but do that.”