Advance Auto Parts 2011 Annual Report Download - page 19

Download and view the complete annual report

Please find page 19 of the 2011 Advance Auto Parts annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

4
based on the demographics in each store’s geographic area.
We also provide a variety of services free of charge to our customers including:
• Battery & wiper installation
• Battery charging
• Check engine light reading where allowed by law
• Electrical system testing, including batteries, starters, alternators and sensors
• “How-To” Video Clinics & Project Brochures
• Oil and battery recycling
• Loaner tool program
Our stores are 100% company operated and are divided into three geographic areas. Each geographic area is
managed by a senior vice president, who is supported by regional and district management. District Leaders have
direct responsibility for store operations in a specific district, which typically consists on average of 12 stores.
Depending on store size and sales volume, each store is staffed by approximately 8 to 16 Team Members, under the
leadership of a General Manager. Store Team Members are comprised of full and part-time Team Members. A
majority of our stores include at least two parts professionals, or parts pros, who have an extensive technical
knowledge of automotive replacement parts and other related applications to better serve our Commercial and DIY
customers. Many of our stores include bilingual Team Members to better serve our diverse customer base. We offer
training to all of our Team Members, including formal classroom workshops, e-learning and certification by the
National Institute for Automotive Service Excellence, or ASE. ASE is broadly recognized for training certification
in the automotive industry.
Commercial Sales. Our Commercial sales consist of sales to both our walk-in and delivery customers, which
represented approximately 31% of our AAP sales in Fiscal 2010. Since 2000, we have aggressively expanded our
sales to Commercial customers through our Commercial delivery program. For delivered sales, we utilize our
Commercial delivery fleet to deliver product from our store locations to our Commercial customers’ place of
business, including independent garages, service stations and auto dealers. Our stores are supported by a
Commercial sales team who are dedicated to the development of our national, regional and local Commercial
customers. Our Commercial sales management is closely aligned with our store management as part of our overall
integrated store operation.
We have concentrated a significant amount of our investments over the past three years on increasing our
Commercial sales at a faster rate in light of the favorable market dynamics. We have added key product brands in
our stores that are well recognized by our Commercial customers, as well as increased the parts knowledge of our
store Team Members. We have increased the size of our sales force by approximately 45% for a greater emphasis on
acquiring new Commercial customers and increasing our share of existing commercial customers’ purchases. In
2010, we continued our incremental investments in additional parts professionals, delivery trucks and drivers for
approximately half of our AAP stores with Commercial programs, and added a business-to-business platform to our
e-commerce capability. We believe these investments and the commitment to consistent delivery times and order
accuracy will enable us to gain more Commercial customers as well as increase our sales to existing customers who
will use us as their “first call” supplier. At January 1, 2011, 3,018 AAP stores, or 90% of total AAP stores, had
Commercial delivery programs, a slight increase from 88% at January 2, 2010.
Store Development. Our store development program has historically focused on adding new stores within
existing markets where we can achieve a larger presence, remodeling or relocating existing stores and entering new
markets. The addition of new stores, along with strategic acquisitions, has played a significant role in our growth
and success. We believe the opening of new stores, and their strategic location in relation to our DIY and
Commercial customers, will continue to play a significant role in our future growth and success.
We open and operate stores in both large, densely populated markets and small, less densely populated areas.
We complete substantial research prior to entering a new market. Key factors in selecting new site and market
locations include population, demographics, vehicle profile, number and strength of competitors’ stores and the cost
of real estate.