To improve the level of your tools, you'll have to earn the cards that belong to each one of them. You can obtain them by opening the chests. Whenever you get a card, it will be added to the meter located underneath each tool. Once it fills up and you can level it up, the tool's card will begin to vibrate and you'll receive a notification. On top of the card, you'll also need the right amount of coins to level a tool up. The higher the tool's level, the more coins you'll need.