Aarons 2014 Annual Report Download - page 20

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Our emphasis on customer service requires that we develop skilled, effective employees who value our customers and project a
genuine desire to serve their needs. To meet this requirement, we have developed the field development program, one of the
most comprehensive employee training programs in the industry. Our field development program, called Aaron’s University, is
designed to provide a uniform customer service experience without reference to store location or nature of store ownership. The
primary focus of the field development program is equipping new associates with the knowledge and skills needed to build
strong relationships with our customers. Our learning and development coaches provide live interactive instruction via
webinars and by facilitating hands-on training in designated training stores. The program is also complimented with a robust e-
learning library. Additionally, Aaron’s has a management development program that offers development for store managers and
future store managers. Also, we periodically produce video-based communications on a variety of topics pertinent to store
associates regarding current Company initiatives.
Purchasing and Retail Merchant Relationships
For our store-based operations, our product mix is determined by store managers in consultation with regional managers and
divisional vice presidents, based on an analysis of customer demands. The following table shows the percentage of the
Company’s store-based revenues for the years ended December 31, 2014, 2013 and 2012 attributable to different merchandise
categories:
Merchandise Category 2014 2013 2012
Furniture 39% 36% 35%
Electronics 26% 29% 32%
Appliances 24% 22% 20%
Computers 9% 9% 10%
Other 2% 4% 3%
We purchase the majority of our merchandise directly from manufacturers, with the balance from local distributors. One of our
largest suppliers is our own Woodhaven Furniture Industries division, which supplies the majority of the upholstered furniture
and bedding we lease or sell. Integrated manufacturing enables us to control the quality, cost, delivery, styling, durability and
quantity of a substantial portion of our furniture and bedding merchandise as well as providing us with a reliable source of
products. We have no long-term agreements for the purchase of merchandise.
The following table shows the percentage of Progressive’s revenues for the year ended December 31, 2014 attributable to
different retail partner categories:
Retail Partner Category 2014
Furniture 44%
Mattress 24%
Auto 13%
Mobile 12%
Jewelry 4%
Other 3%
During 2014, approximately 27% of the lease merchandise acquired by Progressive and subsequently leased to customers was
concentrated in two retail partners.
Distribution for Store-based Operations
Sales and lease ownership operations utilize our 17 fulfillment centers to control merchandise. These centers average
approximately 118,000 square feet, giving us approximately 2.0 million square feet of logistical capacity.
We believe that our network of fulfillment centers provides us with a strategic advantage over our competitors. Our distribution
system allows us to deliver merchandise promptly to our stores in order to quickly meet customer demand and effectively
manage inventory levels. Most of our continental U.S. stores are within a 250-mile radius of a fulfillment center, facilitating
timely shipment of products to the stores and fast delivery of orders to customers.
We realize freight savings from bulk discounts and more efficient distribution of merchandise by using fulfillment centers. We
use our own tractor-trailers, local delivery trucks and various contract carriers to make weekly deliveries to individual stores.