AutoZone 2013 Annual Report Download - page 5

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Leveraging technology was a new initiative for 2013. We have a long and strong heritage of leveraging technological enhancements to
provide solutions to our customers. In 2013, we determined we needed to intensify our focus on this area so we reset our expectations on
technology investment. We are just beginning to see the first system enhancements but we are excited about the impact they will have on
our performance.
We believe the work we completed on all of these initiatives last year positions us well as we enter 2014.
U.S. Commercial
In fiscal 2013, our Commercial sales grew by 12.6% (10.4% on a 52 week basis) ending the year at $1.459 billion. This is a highly fragmented
sector of our industry and we see tremendous opportunities to increase our market share. We have been aggressively investing in this sector
for the last several years and, as a result of those investments and a tremendous amount of hard work by our team, our sales have more than
doubled since 2010. In just the past three years alone, we have added 997 new commercial programs and we now have the program in 71% of
our domestic stores. We have ample opportunities for continued growth as we continue to leverage our culture and knowledgeable AutoZoners,
increase and further develop our world class sales force and enhance our parts availability, all designed to make us our professional customers’
Trusted Partner.
International
This year marked our first foray into expansion outside of North America when we opened our first stores in Brazil. We opened our first stores
in Mexico in 1998 and today have 362 stores across all 31 Mexican states and the Federal District. Our business model has worked very well
in Mexico and our expectations are to continue to grow our store count at a similar pace for the foreseeable future. Based on our success
in Mexico, we have decided to open 10-15 stores in Brazil to evaluate the Brazilian customers’ receptivity to our stores and to assess our
financial performance. We will open these stores over the next couple of years, and then pause development while we refine our offerings and
operations to meet the unique needs of this market. Once we have proven that our offering is successful, we will then determine our long-term
growth plans in this large and growing market.
Digital Integration
For the last few years, our fourth strategic growth priority has been ALLDATA. As we assessed the ever-changing landscape in our industry,
we determined that we should broaden our thinking. Therefore, for 2014, we have renamed this strategic priority “Digital Integration” which
is designed to encompass and leverage all of our digital assets. Today, we have a wealth of data, content and customer relationships from
ALLDATA, autozone.com, autozonepro.com and AutoAnything. It is important and imperative that we “combine forces” and look at our
customers and opportunities on a more holistic basis. We are in the very early stages of initiating this change and we have tremendous work
ahead of us, but this promises to be an important and significant change in our thinking that has the opportunity to significantly deepen our
relationships with our customers.