Advance Auto Parts 2006 Annual Report Download - page 3

2006 was a challenging year that tested the mettle of lower income
consumers and the retailers that serve them. Rising interest rates, a
third consecutive year of gasoline price increases, higher insurance
premiums, and a softening housing market – among other factors –
took their toll on consumers’ wallets.
Many companies devote space in pages like these to addressing “exe-
cution,” often saying something cliché, like “execution is key to our
success.” The real key, though, is determining where execution can be
improved, and then improving it. As macroeconomic challenges
mounted, we spent much of 2006 doing exactly that. We refined our
expectations of what constitutes superior execution, and then focused
on achieving it – in every store, with every customer, every day.
Specifically, we implemented a number of customer service initiatives
that more pro-actively address the unmet needs of the automotive
aftermarket consumer, including:
• A Guaranteed Greeting program, whereby our Team Members
commit to greet every customer who enters our stores. We know
that customers who are greeted and receive expert advice from our
knowledgeable Team leave our stores more satisfied – and are more
likely to return for their future automotive parts needs.
• Legendary phone service, which ensures that we treat customers
who call our stores with the same level of enthusiasm and profes-
sionalism as customers who shop our stores. We know a large
percentage of our customers call our stores before they come in,
and we want to make it easier than ever for them to do business
with us. Superior service will turn more phone inquiries into walk-
in customers, and we are using a mystery-shop program to ensure
our stores are executing this program effectively.
• A program called “Carry Out the Groceries,” where our Team
Members assist customers in carrying their merchandise to their
vehicle, without the customer even having to ask.
• Unique promotions, which reinforce our value proposition. We want
to establish top-of-mind awareness with our customers that
Advance is the destination for free installation services on products
such as automotive batteries and wiper blades. We also are using
new promotional concepts, such as a 10-for-$10 sale, to
drive additional footsteps to our stores.
Advance has always been known for Legendary Customer Service;
it’s not a new concept. But with consumers facing difficult financial
circumstances, it’s even more essential that we deliver above and
beyond their expectations. We like to think of this as “Enthusiastic
Customer Service … and then some,” and I am pleased to say that our
Team Members have embraced these new programs overwhelmingly.
Just as importantly, our customers have noticed – and they are taking the
time to share their positive experiences with us. We’ve selected a num-
ber of these customer compliments to highlight in this annual report.
We visit our stores weekly to ensure high standards, but nothing
matters more to us than customer feedback. So the next time you
Advance Auto Parts, Inc. ▲ Annual Report 2006
1
Letter to our Stockholders
Advance Auto Parts serves many
customers who work on their vehicles
out of economic necessity, and given
the challenges those customers face,
it is imperative that we step up our
game, to serve our customers better
than ever.
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