O'Reilly Auto Parts 2012 Annual Report Download - page 19

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• the type and size of store that should be developed.
When entering new, more densely populated markets, we generally seek to initially open several stores within a short span of time in
order to maximize the effect of initial promotional programs and achieve economies of scale. After opening this initial cluster of new
stores, we seek to begin penetrating the less densely populated surrounding areas. This strategy enables us to achieve additional
distribution and advertising efficiencies in each market.
Management Structure
Each of our stores is staffed with a store manager and one or more assistant managers, in addition to parts specialists, retail and/or
installer service specialists and other positions required to meet the specific needs of each store. Each of our 386 district managers has
general supervisory responsibility for an average of 10 stores, which provides our stores with a strong amount of operational support.
Store and district managers complete a comprehensive training program to ensure each has a thorough understanding of customer
service, leadership, inventory management and store profitability, as well as all other sales and operational aspects of our business
model. Store and district managers are also required to complete a structured training program that is specific to their position,
including attending a week-long manager development program at the corporate headquarters in Springfield, Missouri. Store and
district managers also receive continuous training through on-line assignments, field workshops and regional meetings.
We provide financial incentives to all store Team Members through incentive compensation programs. Under our incentive
compensation programs, base salary is augmented by incentive compensation based upon their individual and/or store’s sales and
profitability. In addition, each of our district managers participate in our stock option program and store managers may be eligible for
a quarterly bonus program based on their store’s performance. We believe that our incentive compensation programs significantly
increase the motivation and overall performance of our store Team Members and enhance our ability to attract and retain qualified
management and other personnel.
Professional Parts People
We believe our highly trained team of Professional Parts People is essential in providing superior customer service to both DIY and
professional service provider customers. Because a significant portion of our business is from professional service provider
customers, our Professional Parts People are required to be highly, technically proficient in automotive products. In addition, we have
found that the typical DIY customer often seeks assistance from a Professional Parts Person, particularly when purchasing hard parts.
The ability of our Professional Parts People to provide such assistance to the DIY customer creates a favorable impression and is a
significant factor in generating repeat DIY business.
We screen prospective Team Members to identify highly motivated individuals who either have experience with automotive parts or
repairs, or automotive aptitude. New store Team Members go through a comprehensive orientation focused on the culture of our
Company as well as the requirements for their specific job position. Additionally, during their first year of employment, our parts
specialists go through extensive automotive systems and product knowledge training to ensure they are able to provide the highest
level of service to our customers. Once all of the required training has been satisfied, our parts specialists become eligible to take the
O’Reilly Certified Parts Professional test. Passing the O’Reilly test helps prepare them to become certified by the National Institute
for Automotive Service Excellence (ASE).
All of our stores have the ability to service professional service provider customers. For this reason, select Team Members in each
store complete extensive sales call training with their regional field sales manager. Afterward, these Team Members spend at least
one day per week calling on existing and potential professional service provider customers. Additionally, each Team Member
engaged in such sales activities participates in quarterly advanced training programs for sales and business development.
Customer Service
We seek to provide our customers with an efficient and pleasant in-store experience by maintaining attractive stores in convenient
locations with a wide selection of automotive products. We believe that the satisfaction of DIY and professional service provider
customers is substantially dependent upon our ability to provide, in a timely fashion, the specific automotive products requested.
Accordingly, each O'Reilly store carries a broad selection of automotive products designed to cover a wide range of vehicle
applications. We continuously refine the inventory levels and assortments carried in each of our stores, based in large part on the sales
movement tracked by our inventory control system, market vehicle registration data, failure rates and management's assessment of the
changes and trends in the marketplace. We have no material backorders for the products we sell.
Our online ordering service provides enhanced customer service capabilities to our DIY and professional service provider customers.
Our program allows customers to view available parts and prices online, purchase parts online and/or either ship these purchases to
their location or have these parts available for pick up in our local store.