{"id":7554,"date":"2015-12-09T23:30:00","date_gmt":"2015-12-10T04:30:00","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/autozone-bringing-customer-focus-to-the-wild-west-of-auto-parts-retailers\/"},"modified":"2015-12-09T23:37:40","modified_gmt":"2015-12-10T04:37:40","slug":"autozone-bringing-customer-focus-to-the-wild-west-of-auto-parts-retailers","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/autozone-bringing-customer-focus-to-the-wild-west-of-auto-parts-retailers\/","title":{"rendered":"AutoZone: Bringing Customer Focus to the Wild West of Auto-Parts Retailers"},"content":{"rendered":"<p>&nbsp;<\/p>\n<p>AutoZone is a leading automotive parts retailer and a leading distributor of automotive replacement parts and accessories.\u00a0 AutoZone operates over 5,000 stores in the United States (including Puerto Rico locations.\u00a0 In recent years, AutoZone has focused more on expanding their store count outside of the United States, and now operates 441 stores in Mexico as well as 7 stores in Brazil.\u00a0 These locations stock a wide variety of products for cars, trucks, sport utility vehicles and vans.\u00a0 These products include new and refurbished automotive hard parts, maintenance items, as well as accessories.\u00a0 In addition to AutoZone\u2019s retail sales channel, 4,100 locations also operate a commercial sales program that provides timely delivery of parts to repair garages of varying size and scope, automotive dealers, and service stations.\u00a0 Additionally, a large percentage of products carried are available for sale through <a href=\"http:\/\/www.autozone.com\">www.autozone.com<\/a>.<\/p>\n<p><strong>Great People Providing Great Service<\/strong><\/p>\n<p>The aspect of AutoZone\u2019s operating model that may be its largest competitive advantages lies in the customer centric focus that is instilled into each and every \u201cAutoZoner\u201d from day one.\u00a0 As the largest auto-parts retailer with a focus on the DIY (do-it-yourself) customer, AutoZone understands that providing high quality and effective service is the best way to capture repeat business.\u00a0 CEO William Rhodes alluded to this competitive advantage following AutoZone\u2019s most recent earnings call, stating \u201cWe are pleased to report our thirty-seventh consecutive quarter of double digit earnings per share growth. Our strong culture enables us to provide exceptional customer service, which is a key point of differentiation.\u201d\u00a0 This culture of exceptional customer service is immediately apparent when one takes a look at the AutoZone pledge and values, shown below:<\/p>\n<p><a href=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/pledgeAndValues.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-7499 aligncenter\" src=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/pledgeAndValues-300x227.jpg\" alt=\"pledgeAndValues\" width=\"300\" height=\"227\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/pledgeAndValues-300x227.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/pledgeAndValues.jpg 525w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>AutoZone employees, take this pledge and the accompanying values very seriously, and it is not uncommon to witness employees (and vendors) chant the pledge in unison in advance of business meetings.\u00a0 Below is a video of the beginning of an AutoZone meeting that was used as reference for AutoZone Brazil during the company\u2019s early expansion into the country.<\/p>\n<p style=\"text-align: center\"><iframe loading=\"lazy\" title=\"AutoZone Brasil\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/irvcZPJQRbU?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Improving Inventory Availability<\/strong><\/p>\n<p>Always looking for an opportunity to iterate and improve productivity in existing stores, AutoZone CEO William Rhodes has recently turned his attention to opportunities that will leverage the company\u2019s scale in order to optimize inventory placement.\u00a0 Over the past few years, AutoZone has worked diligently to implement novel techniques to improve in-store product availability for the end user.\u00a0 Historically, AutoZone relied heavily on their eight U.S. distribution centers to supply and replenish all 4,000+ retail locations.\u00a0 More recently, they have looked at ways to utilize stores as a secondary distribution source.\u00a0 Certain locations are now designated as mega hub stores, which are open 24 hours, offer retail up front, with a distribution center in the back.\u00a0 This significantly expands the parts holding capacity of a store, making it more likely for a specific location to have exactly what the customer wants.<\/p>\n<p><strong>What Next?<\/strong><\/p>\n<p>AutoZone has done a tremendous job of connecting its operating model to its overall business model of providing automotive parts to consumers primarily through their retail stores.\u00a0 By focusing on the consumer and working toward ensuring that they can effectively service this end user, they have delivered best in class results such as thirty-seven consecutive quarters of double digit earnings per share growth.\u00a0 As an auto-parts retailer, AutoZone has benefitted from a depressed economy, which led to consumers delaying new car purchases, instead opting to continue to maintain their older vehicles.\u00a0 With the economy slowly recovering, and consumers more likely to make that new vehicle purchase, AutoZone has looked to expand their commercial offering in order to reach those consumers that are now taking their vehicles to the dealership or service center instead of maintaining the vehicles themselves.\u00a0 Historically, AutoZone has set itself apart from its peers, and continues to lead the way when it comes to retail execution within auto-parts.\u00a0 Whether they can do the same as they are forced to adjust their core business model will be their next challenge.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Sources<\/strong><\/p>\n<p>http:\/\/www.fool.com\/investing\/general\/2015\/07\/15\/these-2-graphs-should-worry-autozone-inc-investors.aspx<\/p>\n<p>http:\/\/www.autozoneinc.com\/about_us\/our_story.html<\/p>\n<p>http:\/\/loyalty360.org\/resources\/article\/autozone-puts-customers-first-to-instill-brand-loyalty<\/p>\n<p>http:\/\/www.chainstoreage.com\/article\/th-straight-quarter-eps-growth-autozone<\/p>\n","protected":false},"excerpt":{"rendered":"<p>AutoZone: Bringing Customer Focus to the Wild West of Auto-Parts Retailers<\/p>\n","protected":false},"author":948,"featured_media":7555,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-7554","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>AutoZone: Bringing Customer Focus to the Wild West of Auto-Parts Retailers - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/autozone-bringing-customer-focus-to-the-wild-west-of-auto-parts-retailers\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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