Store Management

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Store Management
March 2008
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Advance Auto Parts

• Aftermarket Automotive Parts and Accessories
  Retailer
• 3200 Stores in 40 States and Puerto Rico
• Projected over 5 Billion in Sales for Fiscal
  2008
• Approx 3.9 Billion Retail
• Approx 1.1 Billion Commercial Sales
• Over 45,000 Team Members
• 7 Distribution Centers

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Store Management Key Areas of Concentration

• People
• Process
• Product
• Promotion/Presentation
• PL Statement (Operating Statement)

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People

• Selection
• Onboarding
• Communication/Engagement
• Training/Development

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Making The Right People Decisions

• Selection
• Needs Assessment
• Determine Position or Positions needed
• Identify Specific Skill Set Required
• Assess Internal Candidates
• Identify Recruiting Support for External
  Candidates
• Interviewing
• What you can or can not say
• Federal Guidelines to be aware of
• HIPPA
• ADA
• EEOC

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Making the Right People Decision

• Onboarding
• Most companies put the new employee through a
  process that resembles drinking water from a
  fire hose.
• Every person will assimilate information at their
  own rate
• The first week is one of the most critical times
  for all new employees
• Set Expectations of Employee
• Communicate what they should expect of the
  Company
• Create a warm welcoming environment

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NHOST New Hire Onboard Store TrainingValidation
Project
High
New Team Member with Training
New Team Member without Training

Standard of Performance
Levels of Performance

Low
Time
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NHOST Validation Project

• At Nine Weeks.
• Sales per labor hour
• NHOST Team Members averaged 100 sales per labor
  hour
• Non-NHOST Team Members averaged only 80 sales
  per labor hour
• Customer Average
• NHOST Team Members had an 18 Customer Average
• Non-NHOST Team Members had a 16 Customer Average
• Customer Count
• NHOST Team Members averaged 200 transactions
• Non-NHOST Team Members averaged 100 transactions

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Communication

• Good Communication leads to better understanding
  and mutual confidence
• Six Steps of Effective Communication
• Plan it
• Keep it simple
• Be Consistent
• Communicate with urgency
• Remember WIIFM
• Be supportive, encourage, thank

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Communication/Engagement

• Store/Department Team Meetings
• Management Staff Meetings
• Communication Centers (Bulletin Boards)
• Email blast updates
• 11 Meetings
• Informational Meetings
• Coaching Sessions
• Counseling/Disciplinary Meeting
• 1st sessions should always be corrective
  developmental
• Correct/instruct on process
• Validate understanding
• Behavior Change

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Importance of Monthly Store Sales Meetings

• Sales
• Profits
• Opportunities
• Upcoming Promotions/Events
• Team Recognition
• SPIFs Team Sales Incentives
• Show Appreciation - Thank Them!
• Listen and Ask Questions!
• An Informed Team is an Engaged Team

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Communications Timeline
Day
Week
Month

• Complete MPT To Do List
• Update Communications Center
• Weekly Store Staff Meetings
• Sales Goals

• Hot Topics
• Game Plan
• Planning Calendar
• Team Member Schedule
• Sales Goals

• Store Team Sales Meeting
• Campaigns / Contests
• FrontRunner-Quarterly Publication
• Sales Goals

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Benefits of Training

• WIIFM
• Better performing Team Members
• Better Customer Service
• Better Team Retention
• Better Sales
• Training Creates Leverage!
• You should considerTraining an investment, your
  return is improved effectiveness, efficiencies
  and performance!

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How to Train.....

• Formula to presenting Training Content
• Tell them
• Show them
• Watch them do it
• Let them do it on their own
• Follow through days later
• If they did it right---give them praise and
  recognition
• If they did it wrong---repeat steps 3-5

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Training Resources

• Retail Academy
• Product Information
• Product Features and Benefits
• On Line Learning Center
• New E Learning System in 2008
• Interactive format
• In Store Training Programs
• Ops Training Class
• Leadership Training
• Tech Trainers
• Automotive Systems Technical Skills Training
• Automotive Systems Sales Training
• Project Selling (the complete job)
• Attachment (related item) Selling) Would you
  like fries with your order?

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StoreNet Site Map / SOP Site
Or use the SOP Hot Key
Click here to access the SOP Site
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Process Management
Management Planning and Training (MPT)
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Store Process Management

• Planning
• Forecasting
• Work Flow Management
• Scheduling

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Mission of MPT

• To provide Store Management with the proper
• tools and reporting to manage labor to its
• maximum yield, not its lowest cost while driving
• sales.

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Delivery
Plan for Staff Meeting
Clean Oil Recovery Tank
Sweep The Floor
Plan-o-Grams
DM Meetings
Clean the Bathrooms
DIFM Sales
Store Meetings
Plan for Store Meeting
Pick up the Parking lot
Process PDQ Returns
Clean Battery Rack
Restock Register Bags
Cycle Counts
Clean Test Equipment
DIY Sales
ASN Stocking
Staff Meetings
Store to Store Transfers
Reload Cash Register Tape
Clean and Organize Manager's Office Area
Price Changes
Clean Organize Parts Counter
Update Quota Board
Take Deposit to the Bank
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MPT.Driving Sales

• Drive sales by planning to..
• Have the Right Person
• In the Right Place
• At the Right Time
• Doing the Right Things
• You will serve your customers better!
• You will increase your sales!

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Seven Steps to MPT Plan
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Scheduling to Sell

• Work Flow Management
• Forecast Sales Expectation
• Forecast of Payroll Dollars/Percent
• Project Peak Selling Periods
• Schedule to support Peak Sales Periods
• Schedule to complete non-selling task
• Planogram updates
• Stock Put away
• Maintenance

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Store Manager What Matters Most
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Store Manager What Matters Most
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Daily To-Do List
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6. Team Member Scheduling
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Product Management Basics

• Inventory Basics
• Maxi Adjustments
• Cycle Counts
• Reverse Logistics
• Planograms
• Back Stock (overstock)
• PDQ Program
• Daily / Weekly Duties

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Inventory Basics

• Managing your stores inventory is really about
  managing different facets of the inventory
  process
• Proper Stock Levels and Variety
• Too little merchandise means we miss sales
• Too much merchandise means we waste inventory
  dollars on product we dont need
• Every Store has a different selling mix
• Generally speaking 20 of your inventory produces
  80 of your sales.
• Stock levels are driven by On Hand quantity and a
  Maxi quantity

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On Hand Integrity

• Ways On Hand integrity is compromised
• Cycle Count inaccuracy
• Refunds processed incorrectly
• Ringing multiple quantities incorrectly
• Overring (Post Voids not processed)
• POS Exchanges / Defect Exchanges processed
  incorrectly
• Theft
• Shipping errors

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Maxi Adjustments

• Maxi is the amount of inventory needed to support
  sales until the next DC shipment arrives
• A Maxi that is too low will not support sales
• A Maxi that is too high will lead to excessive
  backstock
• Request a new maxi through the Inventory
  Adjustment menu, or by using the RF Scanner
• Maxis are calculated based on last 4 weeks sales
  except for bulk chemicals batteries which use a
  2-3 week supply
• If lost sales are recorded properly using F10
  "Lost Sale" function, Inventory Management will
  adjust maxis accordingly

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Cycle Counts

• Cycle Count Basics
• Cycle counts are mini inventories, and if done
  properly, are the best way to maintain on hand
  integrity
• Before cycle counting, make sure merchandise is
  fronted, faced and in proper location
• Complete by the weekly due date
• We schedule approximately 1200 2000 pieces per
  week
• Count items in multiple locations
• back room, endcaps, wing panels, and backstock
• Confirming a cycle count without actually
  counting the merchandise (F8ing) is considered
  fraud

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Reverse Logistics(Distribution Center Returns)
The process of returning cores, defects and new
saleable merchandise to the DC, PDQ, or Master
PDQ to ensure proper credit.
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Reverse Logistics(Distribution Center Returns)
The process of returning cores, defects and new
saleable merchandise to the DC, PDQ, or Master
PDQ to ensure proper credit.
You should think of Reverse Logistics as the
Register at your backdoor!
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Planogram Management
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Planograms

• The planogram includes the following
• A Cover Sheet
• Provides the purpose of the planogram
• Provides notes on how to set the planogram
• Provides what you need to do to complete it
• A Contact Sheet
• Provides the person and phone numbers to call
• Planogram
• Visual presentation of where and how to place the
  merchandise
• Line Listing of the items, description, facings,
  and the minimum amount of merchandise

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Back Stock (Overstock)

• Back Stock Worked Daily
• Run Back Stock Move Report
• Work Backstock on Sales Floor
• Back Stock Worked Weekly
• Use Back Stock cart on Truck Day
• Scan in Back Stock after stocking is complete
• Organize Back Stock area with new items

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PDQ Program(Special Order Program)

• PDQ Program Maintained 100 Daily
• All items awaiting pick up have slips attached
• All items Paid (including Team Member purchases)
  unless for Commercial Account or for Warranty
  Replacement
• PDQ Defective Item for Replacement use POS/Def
  Exchange Hot Key
• PDQ Returns Sent Back Weekly
• Returns assigned to Totes Daily using the Parts
  Not in Totes Report

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Inventory Daily / Weekly Duties
Day
Week

• Store Recovery
• Review / assign totes
• Receive ASNs
• Review ATIs
• Review Order Viewer /
• PDQ shelf
• Process Store Use items
• Complete Cycle Counts
• Return to stock Cycle Count
• Work Backstock

• Review Planning Calendar on Store Net
• Review Game Plan
• Print manifests for weekly returns
• Complete Planograms
• Process outages / variances
• Complete callbacks and overstock returns
• Scan in new Backstock
• Complete Cycle Counts (No F8ing)
• Confirm DC Truck ASN
• Complete Maxi adjustments
• Complete Price Change Front Tags
• Place Store Supply Order (One order per week)
• Place Add Order

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The Advance Way to Manage Inventory
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Store Presentation/PromotionDaily Store
Inspection
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Store Presentation/PromotionDaily Store
Inspection

• Daily Outside Store Inspection
• Use this process daily when walking the exterior
  of your store!
• Green Areas and Landscaping
• Parking Lot and Striping
• Dumpster Area
• Lighting
• Sidewalks
• Windows and Doors
• Window Signage

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Store Presentation/PromotionDaily Store
Inspection

• Daily Inside Store Inspection
• Use this process daily when walking the exterior
  of your store!
• Consistency is the key!
• 4 ft X 4 ft Section
• Start with the Interior Walls
• Then Sales Floor Aisles
• Then Sales Floor End Caps and Wing Panels
• Then Sales Floor Stack Out Displays
• Then Parts Counter including the Register
  Displays
• Then Parts Department End Caps
• Finish with the Parts Department Aisles

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4-3-0 Parallel Merchandising
0 Feet (if there is not 4 between stackouts)
4 Feet minimum between displays
3 Feet (to fixture)
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Customer Convenience

• Place where customers will need them
• Front Ad Display
• Oil Rack
• Chemical Wall
• The more customers can carry, the more they buy!
• EZ Cart customers spend about 40 on average

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Store Display Signage(Daily, Weekly, Monthly)

• Ending promotional signs removed
• New Monthly Ad Signs Displayed
• POP (Point of Purchase) Signage updated
• OSP (Off Shelf Display) Rotated
• Stack-outs faced and filled
• End Cap Displays faced and filled or Updated
  (Seasonal)
• BOGO (Buy-one Get-one Free) Merchandise Displayed

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Operating Statement

• Four Key Result Areas
• Sales
• Gross Margin
• Expenses
• Profits

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Operating Statement Basics

• Budgets/Goals
• Performance is measured as a of Sales and of
  Profits
• Sales to Budget
• Comp Sales
• Profit to Budget
• Comp Profits
• Bonuses are often tied to Sales Performance

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Operating Statement Basics

• Basis Point
• A basis point is a financial term used to
  describe One one-hundredth of a percent
• If a stores payroll budget is 12.45 and the
  operating statement shows they ran a 12.25 they
  were 20 basis points under their budget

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Operating Statement Basics

• Flow Through
• Flow through is a term used to describe the
  profit you earn on the bottom line from
  incremental top line sales
• For every dollar over budget in sales, 30 should
  drop directly to the bottom line

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Operating Statement Basics

• Top Line Combined Retail and Commercial Sales
• Retail Sales are sales from walk-in DIY customers
• Commercial Sales are sales from DIFM customers
• Delivery
• Walk-In

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Operating Statement Basics

• Bottom Line
• Total Gross Profit
• - Total Operating Costs
• Operating Income/(Loss)

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Operating Statement Basics

• Supplies
• Bad Checks
• Cash Variance

• Controllable Expenses
• Utilities
• Maintenance and Repairs
• Telephone
• Trash Removal
• Payroll

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Operating Statement Basics

• High Exposure Controllable Expenses
• Workers Comp
• Liability Claims
• Vehicle Accidents
• Safety is important both your Team, Customers
  and shareholders!

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Where Does All The Money Go?

• Total Store Sales
• Cost of Goods Sold (COGS)
• Shrink, Allocated Warehouse and Other
• Payroll, Taxes Benefits
• Net Advertising Expenses
• Expenses / Other Operating Costs
• __________________________
• Operating Income / (Loss)

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Store Management Conclusion

• The Best Business Plan
• The Best Processes
• The Most Efficient Operation
• The Best Pricing
• The Most Inventory
• Wont Guarantee Success!
• All things being equal............

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The Store With The Best People Wins!!