Pep Boys 2011 Annual Report Download - page 51

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build long-lasting, loyal relationships. We utilize promotions, advertising, and loyalty card programs to
promote our service and repair capabilities, merchandise offerings and our commitment to customer
service and satisfaction. The Company is committed to an effective promotional schedule with TV and
radio promotions that focus on the most frequently needed services and are scheduled around periods
of time when automotive repair and preventative maintenance are top of mind and relevant to our
customers. These promotions will be supplemented by extensive direct marketing and grass-roots
campaigns and occasional print campaigns. Finally, we utilize in-store signage, creative product
placement and promotions to help educate customers about products that fit their needs.
The Company maintains a web site located at www.pepboys.com. It serves as a portal to our
Company, allowing consumers the freedom and convenience to access more information about the
organization, our stores and our service, tires, parts and accessories offerings. Consumers can purchase
and schedule installation of tires with our TreadSmart application, schedule a service appointment with
our eServe application, keep track of all their maintenance and service records electronically through
our online Glovebox application and are expected to be able to purchase products online from us for
in-store or home delivery during 2012. The site also provides consumers with general and seasonal car
care tips, do-it-yourself vehicle maintenance and light repair guidance, and safe driving pointers.
Exclusive online coupons are available to site visitors who register their e-mail addresses with us. These
coupons cover special discounts on services and products at Pep Boys.
STORE OPERATIONS AND MANAGEMENT
Most Pep Boys stores are open seven days a week. Each Supercenter has a Retail Manager and
Service Manager (Service & Tire Centers only have a Service Manager while Pep Express stores only
have a Retail Manager) who report to geographic-specific Area Directors and Division Vice Presidents.
(The Company is currently piloting a more customer-friendly and efficient store management model for
its Supercenters that combines all associates within a store under the management of a General
Manager.) The Division Vice Presidents report to the Executive Vice President of Stores who in turn
reports to the President and Chief Executive Officer. As of January 28, 2012, a Retail Manager’s and a
Service Manager’s average length of service with the Company is approximately 10.0 and 6.4 years,
respectively.
Supervision and control over individual stores is facilitated by Area Directors and Divisional Vice
Presidents making regular visits to stores and utilizing the Company’s computer system and operational
handbooks. All of the Company’s advertising, accounting, purchasing, information technology, and most
of its administrative functions are conducted at its corporate headquarters in Philadelphia,
Pennsylvania. Certain administrative functions for the Company’s regional operations are performed at
various regional offices of the Company. See ‘‘Item 2 Properties.’’
INVENTORY CONTROL AND DISTRIBUTION
Most of the Company’s merchandise is distributed to its stores from its warehouses by dedicated
and contract carriers. Target levels of inventory for each product are established for each warehouse
and store based upon prior shipment history, sales trends and seasonal demand. Inventory on hand is
compared to the target levels on a weekly basis at each warehouse, potentially triggering re-ordering of
merchandise from suppliers. In addition, each Pep Boys store has an automated inventory
replenishment system that orders additional inventory, generally from a warehouse, when a store’s
inventory on-hand falls below the target levels. We also consolidated certain of our slow-moving hard
parts inventory that had previously been stocked at each of our five warehouses into our centrally-
located Indianapolis warehouse that can service each of our stores with overnight delivery of these
parts, when necessary.
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