Pep Boys 2011 Annual Report Download - page 48

from DIY and toward DIFM due to increasing vehicle complexity and electronic content, and
decreasing availability of diagnostic equipment and know-how. In addition, while this needs-based
industry has a dedicated DIY customer base, the number of consumers who would prefer to have a
professional fix their vehicle fluctuates with economic cycles. For example, a drop in disposable income
during the most recent recession forced some former DIFM consumers to work on their own vehicles,
slightly growing the DIY industry. Weak labor and credit markets, depressed new vehicles sales, and
the increasing average length of vehicle ownership compounded this trend in 2009 and 2010. New car
sales started to rebound in 2011 but remain significantly below historical levels. The broader economic
recovery is expected to increase disposable income, which will likely result in the reversal of this recent
trend.
We expect the shift away from DIY and toward DIFM to increase as the economy recovers, and
continue for the foreseeable future. In anticipation of the change in consumer behavior we have
adopted a long-term strategy of leading with our automotive service offerings and expanding our
commercial business, while maintaining our DIY customer base through our innovative marketing
programs in order to capitalize on the forecasted long-term growth of the DIFM industry and decline
of the DIY business.
BUSINESS STRATEGY
Our vision for Pep Boys is to take our industry-leading position in automotive services and
accessories and be the automotive solutions provider of choice for the value-oriented customer. Our
brand positioning—‘‘PEP BOYS DOES EVERYTHING. FOR LESS.’’ is designed to convey to
customers the breadth of the automotive services and merchandise that we offer and our value
proposition. The four strategies to achieve our vision are to: (i) Earn the trust of our customers every
day, (ii) Lead with our service business and grow through our Service & Tire Centers, (iii) Establish a
differentiated DIY experience by leveraging our Automotive Superstore and (iv) Leverage our
Automotive Superstore to provide the most complete offering for our commercial customers.
Earn the TRUST of our Customers every day. We do this by delivering a customer experience
that is based on Speed, Expertise, Respect and Value. We start by utilizing customer analytics to
understand the services and products our customers need or want in order to build long lasting
relationships. Our rewards program provides us with information about our most loyal customers that
assists us in meeting their needs and wants, while helping to add to customer count increases and
repeat business by providing these customers with discounted towing, free services and rewards points
for purchases. We have developed a tailored marketing plan for each of our markets to maximize our
reach and efficiencies. These marketing programs include TV and radio promotions scheduled around
traditional shopping holidays that focus on the most frequently needed services, complimented with
digital media, direct marketing, grass-roots and print campaigns. In our stores, we strive to continuously
improve the customer experience by providing better looking and easier to shop stores and more
consistent execution of our simplified and streamlined operations. We strive to hire the best associates
and our goal is to be the preferred employer in our industry by focusing on associate hiring practices,
training and development, and rewarding associate performance through performance-based
compensation plans. Online, we continue to develop innovative ways to make it easier for customers to
do business with us, by providing our customers with the ability to use our website to research services
and products, schedule service appointments and purchase products online for in store or (coming
soon) home delivery.
Lead with our Service business and grow through our Service & Tire Centers. We do this by
being a full service—tire, maintenance and repair—shop that DOES EVERYTHING. FOR LESS. Our
full service capabilities, ASE (Automotive Service Excellence) certified technicians and continuous
investment in training and equipment allow customers to rely on us for all of their automotive service
and maintenance needs. We can provide these services at highly-competitive prices because our size
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