AutoZone, Inc. (AutoZone) operates as a retailer and distributor of automotive replacement parts and accessories in the Americas.
The company operates various stores in the United States (‘U.S.’), Mexico, and Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. In the company’s domestic stores as well as the vast majori...
AutoZone, Inc. (AutoZone) operates as a retailer and distributor of automotive replacement parts and accessories in the Americas.
The company operates various stores in the United States (‘U.S.’), Mexico, and Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. In the company’s domestic stores as well as the vast majority of the company’s stores in Mexico and Brazil, the company has a commercial sales program that provides prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts.
The company also sells automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com, and the company’s commercial customers can make purchases through www.autozonepro.com. Additionally, the company sells the ALLDATA brand of automotive diagnostic, repair, collision and shop management software through www.alldata.com. The company also provides product information on its Duralast branded products through www.duralastparts.com. The company does not derive revenue from automotive repair or installation services.
Store Operations
Store Formats
Substantially all stores are based on standard store formats, resulting in generally consistent appearance, merchandising and product mix with approximately 90% to 99% of each store’s square footage used as selling space. Most of the company’s stores carry approximately 20,000 to 25,000 unique SKUs with 40% to 50% of the space dedicated to hard parts inventory.
Stores are replenished primarily by the nearest distribution center but also typically have same-day access to one of the company’s domestic and international hub stores’ expanded inventory assortment. Additionally, the company has some mega hub stores in Mexico. Hub and mega hub stores work in concert with other stores to drive customer satisfaction through improved local parts availability and expanded product assortments.
Store Personnel Training
The company provides on-the-job training as well as formal training programs, including an annual national sales meeting with related cascading meetings at the company’s distribution centers, regional offices and stores; store meetings on specific sales and product topics; standardized computer-based training to support culture, safety, salesmanship, compliance and product and job knowledge; and several specialist, vendor and third-party programs to support learning and development in areas requiring technical expertise and specific job knowledge. All domestic AutoZoners are encouraged to complete the company’s in-house product knowledge program and Parts Expert certification, which is developed in partnership with the company’s key suppliers.
Store Support Centers
All store support functions are centralized in the company’s store support centers located in Memphis, Tennessee; Monterrey, Mexico; Chihuahua, Mexico; Sao Paulo, Brazil; and Gurugram, India. In addition, the company has offices in Shanghai, China and Istanbul, Turkey that provide sourcing or other support functions.
Store Automation
All of the company’s stores have Z-net, its proprietary electronic catalog that enables the company’s AutoZoners to efficiently look up the parts that the company’s customers need and provide complete job solutions, advice and information for customer vehicles. Z-net provides parts information based on year, make, model and engine type of a vehicle and also tracks inventory availability at the store, at other nearby stores and through special order. The Z-net display screens are placed on the hard parts counter or pods, where both the AutoZoner and customer can view the screen.
The company’s stores utilize its computerized proprietary Point-of-Sale System, which includes bar code scanning and point-of-sale data collection terminals. The company’s proprietary Store Management System provides administrative assistance, as well as enhanced merchandising information and improved inventory control. The Point-of-Sale System also enhances customer service, while the Store Management System provides simplified warranty and product return procedures.
Commercial
The company’s commercial sales program operates in a highly fragmented market, and the company is a leading distributor of automotive parts and other products to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts in the Americas. As part of the company’s program, the company offers credit and delivery to the company’s customers, as well as online ordering through www.autozonepro.com or through the AutoZone Pro mobile application. Through the company’s hub and mega hub stores, the company offers a greater range than its satellite stores of parts and products desired by professional technicians. The company has dedicated sales teams focused on independent repair shops, as well as national, regional and fleet commercial accounts.
Store Development
The company undertakes substantial research prior to entering new markets. The company seeks to open new stores in high visibility sites in high traffic locations within or contiguous to existing market areas and attempt to cluster development in markets in a relatively short period of time. The company’s stores are ‘destination stores,’ generating their own traffic, therefore the company situates most stores on major thoroughfares with easy access and good parking. In addition to continuing to lease or develop the company’s own locations, the company evaluates and may make strategic acquisitions.
Marketing and Merchandising Strategy
The company is dedicated to providing customers with superior service and trustworthy advice as well as quality automotive parts and products at a great value in the company’s conveniently located, well-designed stores and through the company’s online platforms. Key elements of this strategy are:
Customer Service
Customer service is the most important element in the company’s marketing and merchandising strategy, which is based upon consumer marketing research. The company emphasizes that its AutoZoners should always put customers first by providing prompt, courteous service and trustworthy advice. The company’s electronic parts catalog assists in the selection of parts, as well as identifying any associated warranties offered by the company or its vendors. In addition to the company’s in-store offerings, the company sells its full suite of automotive hard parts, maintenance items, accessories and non-automotive parts through www.autozone.com, for pick-up in store or to be shipped directly to a customer’s home or business, with next day or same day delivery programs in most of the company’s U.S. markets. Additionally, the company offers a mobile application that provides customers with store locations, driving directions, operating hours, product availability, the ability to purchase products and other information.
The company also provides access to specialty tools as one of its free services. Through the company’s Loan-A-Tool program customers can borrow a specialty tool, such as a steering wheel puller, for which a do-it-yourself (‘DIY’) customer or a repair shop would have little or no subsequent use beyond a single job. AutoZoners also provide free diagnostic and related services, including check engine and anti-lock braking system light readings through the company’s AutoZone Fix Finder service, testing of starters, alternators and batteries, battery charging and the collection of used oil for recycling.
Merchandising
The following tables show some of the types of products the company sells by major category of items:
Failure: A/C Compressors, Batteries & Accessories, Bearings, Belts & Hoses, Calipers, Chassis, Clutches, CV Axles, Engines, Fuel Pumps, Fuses, Ignition, Lighting, Mufflers, Radiators, Starters & Alternators, Thermostats, Tire Repair, and Water Pumps.
Maintenance: Antifreeze & Windshield Washer Fluid; Brake Drums, Rotors, Shoes & Pads; Chemicals, including Brake & Power; Steering Fluid, Oil & Fuel Additives; Oil & Transmission Fluid; Oil, Cabin, Air, Fuel & Transmission; Filters; Oxygen Sensors; Paint & Accessories; Refrigerant & Accessories; Shock Absorbers & Struts; Spark Plugs & Wires; and Windshield Wipers.
Discretionary: Air Fresheners, Cell Phone Accessories, Drinks & Snacks, Floor Mats & Seat Covers, Interior & Exterior Accessories, Mirrors, Performance Products, Protectants & Cleaners, Sealants & Adhesives, Steering Wheel Covers, Tools, Towing, Vehicle Entertainment Systems, and Wash & Wax.
Customer satisfaction is often impacted by the company’s ability to promptly provide specific automotive products as requested. Each store carries the same basic products, but the company tailors its hard parts inventory to the makes and models of the vehicles in each store’s trade area and tailors the remaining store’s assortment to the local demographics. The company’s hub stores (including mega hub stores, which carry an even broader assortment) carry a larger assortment of products that are available to customers of the surrounding local stores. The company is continuously updating the products the company offers to ensure its inventory matches the products its customers need or desire.
Brand Marketing: Marketing and Loyalty
The company is constantly working to understand its customers’ wants and needs so the company can build long-lasting, loyal relationships. The company utilizes advertising, direct marketing, loyalty programs and promotions primarily to highlight the company’s great value, the availability of high quality parts and develop a relationship with an expanding base of customers. Digital and broadcast media are the company’s primary advertising methods of driving retail traffic, while the company leverages a dedicated sales force and the company’s ProVantage loyalty program to drive commercial sales.
Store Design, Visual Merchandising and Promotional Execution
The company designs and builds stores for high visual impact. The typical store utilizes colorful exterior and interior signage, exposed beams and ductwork, finished floors and brightly lit interiors. Batteries, maintenance products, accessories and non-automotive items are attractively displayed for easy browsing by customers. In-store signage and special displays promote products on floor displays, end caps and shelves. The company utilizes in-store signage, creative product placement and promotions to help educate customers about products that they may need.
Purchasing and Supply Chain
Merchandise is selected and purchased for all stores through the company’s store support centers located in Memphis, Tennessee; Monterrey, Mexico; Sao Paulo, Brazil and Gurugram, India. Additionally, the company has offices in Shanghai, China and Istanbul, Turkey to support the company’s global sourcing efforts. Most of the company’s merchandise flows through its distribution centers to the company’s stores by its fleet of tractors and trailers or by third-party transportation firms. The distribution centers replenish the company’s stores up to multiple times per week depending on store sales volumes.
Trademarks and Patents
The company has registered several trademarks and service marks in the U.S. Patent and Trademark Office, as well as in certain other countries, including without limitation: ‘AutoZone,’ ‘Get in the Zone,’ ‘Duralast,’ ‘Econocraft,’ ‘ProElite,’ ‘ShopPro,’ ‘SureBilt,’ ‘TotalPro,’ ‘TruGrade,’ ‘Valucraft,’ and ‘ALLDATA,’ along with variations of these trademarks.
Seasonality
The company’s business is somewhat seasonal in nature, with the highest sales typically occurring in the spring and summer months of February through September, and the lowest sales in the months of December and January.
History
AutoZone, Inc. was founded in 1979. The company was incorporated in 1991.