Advance Auto Parts 2014 Annual Report Download - page 11

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space and prominently display high-turnover products and accessories to customers. We utilize aisle displays to feature high-
demand or seasonal merchandise, new items and advertised specials, including bilingual signage based on the demographics in
each store's geographic area.
Our Customers
We serve both Commercial and DIY customers. Our Commercial customers consist primarily of delivery customers for
whom we use our commercial delivery fleet to deliver product from our store or branch locations to our Commercial
customers’ places of business, including independent garages, service stations and auto dealers. We also serve approximately
1,325 independently-owned Carquest stores with shipments directly from our distribution centers. Our DIY customers are
primarily served through our stores and can also order online to pick up merchandise at a conveniently located store or have
their purchases shipped directly to them.
A majority of our stores include at least two parts professionals, or parts pros, who have extensive technical knowledge of
automotive replacement parts and other related applications to better serve our Commercial and DIY customers. Many of our
stores also 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.
Since 2008, we have concentrated a significant amount of our investments on increasing our Commercial sales at a faster
rate in light of favorable market dynamics. We have added key product brands in our stores that are well recognized by our
Commercial customers and have increased the number of parts professionals, delivery vehicles and other support services to
serve those customers. In 2012, we added eService offerings for our Commercial customers, including online training solutions,
fully searchable diagnostic and repair resources and online marketing services, which are available on a subscription basis. 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. Our
acquisition of GPI, which is highly concentrated in the Commercial market, also increased our market penetration and
Commercial capabilities. As a result, our Commercial sales represented approximately 57.0% of our sales in 2014 compared to
40.4% in 2013.
While Commercial is our growth engine, DIY customers remain a sizable portion of our business and we remain focused
on continuing to deliver on our value proposition to our core DIY customers as well. Store Team Members utilize our point-of-
sale ("POS") system, including a fully integrated electronic parts catalog ("EPC"), to identify and suggest the appropriate
quality and price options for the SKUs we carry, as well as the related products, tools or additional information that is required
by our DIY customers to complete their automotive repair projects properly and safely. Except where prohibited, we also
provide a variety of services in our stores free of charge to our customers including:
• Battery and wiper installation;
• Battery charging;
• Check engine light reading;
• Electrical system testing, including batteries, starters, alternators and sensors;
• “How-To” video clinics;
• Oil and battery recycling; and
• Loaner tool programs.
Store Development
Our store development program has historically focused on adding new stores and branches within existing markets where
we can achieve a larger presence, remodeling or relocating existing stores and entering new markets. The addition of new
locations, 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 Commercial and DIY 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, traffic count, vehicle profile, number and strength of competitors' stores and the cost of real estate.