Pep Boys 2012 Annual Report Download - page 45

target customer segments’ needs and desires, so that we can deliver outstanding customer service and
build long-lasting, loyal relationships with them. We utilize advertising, promotions and a loyalty card
program (Rewards) to convey our commitment to customer service and to promote our service and
repair capabilities and product offerings. We are committed to an effective multi-media promotional
schedule supplemented by extensive direct marketing and grass-roots campaigns and occasional print
campaigns. Finally, we utilize in-store signage and creative product placement to help educate
customers about services and products that fit their needs.
We maintain a website located at www.pepboys.com. It serves as a portal to Pep Boys, allowing
consumers the freedom and convenience to access more information about the company, our stores and
our service, tires, parts and accessories offerings. Customers 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 can now purchase products online from us for in-store or home delivery. A mobile
version of our website was launched in 2012, providing increased convenience to our customers. We are
committed to the continual improvement of our on-line presence as part of our strategy to grow where
our target customers live, work and shop.
STORE OPERATIONS AND MANAGEMENT
Most Pep Boys stores are open seven days a week. Most Supercenters have 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 Divisional Vice
Presidents. The Divisional Vice Presidents report to either the Vice President—Supercenters, Eastern
US and Service & Tire Centers or the Vice President—Supercenters, Western US who in turn report to
the Senior Vice President—Store Operations who in turn reports to the President & Chief Executive
Officer. As of February 2, 2013, a Retail Manager’s and a Service Manager’s average length of service
with Pep Boys is approximately 10.3 and 7.1 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 our advertising, accounting, purchasing, information technology and most of
administrative functions are conducted at our corporate headquarters in Philadelphia, Pennsylvania.
Certain administrative functions for our regional operations are performed at various regional offices.
See ‘‘Item 2 Properties.’’
INVENTORY CONTROL AND DISTRIBUTION
Most of our merchandise is distributed to our stores from our 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 level. 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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