Store Management
March 2008
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
2
Store Management
Key Area’s of Concentration
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3
People
Process
Product
Promotion/Presentation
P&L Statement (Operating Statement)
People
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4
Selection
Onboarding
Communication/Engagement
Training/Development
Making The “Right” People Decisions
Selection
• Needs Assessment
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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
5
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
6
NHOST
New Hire Onboard Store Training
Validation Project
High
Levels of
Performance
New Team Member with Training
Standard of Performance
$$
Low
Time
7
$$
New Team
Member without
Training
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
8
Communication
“Good Communication leads to better
understanding and mutual confidence”
Six Steps of Effective Communication
1.
2.
3.
4.
5.
6.
9
Plan it
Keep it simple
Be Consistent
Communicate with urgency
Remember WIIFM
Be supportive, encourage, thank
Communication/Engagement
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Store/Department Team Meetings
Management Staff Meetings
Communication Centers (Bulletin Boards)
Email blast updates
1:1 Meetings
– Informational Meetings
– Coaching Sessions
– Counseling/Disciplinary Meeting
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10
1st sessions should always be corrective & developmental
Correct/instruct on process
Validate understanding
Behavior Change
Importance of Monthly Store Sales Meetings
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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
11 Team
Communications Timeline
Day
Week
 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
12
Month
 Store Team Sales Meeting
 Campaigns / Contests
 FrontRunner-Quarterly
Publication
 Sales Goals
Benefits of Training
WIIFM
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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:
1.
2.
3.
4.
5.
Tell them
Show them
Watch them do it
Let them do it on their own
Follow through days later
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•
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If they did it right---give them praise and recognition
If they did it wrong---repeat steps 3-5
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)
Store Process Management
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•
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Planning
Forecasting
Work Flow Management
Scheduling
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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Sweep The Floor
Clean the
Bathrooms
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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”
Daily To Do’s – Meeting Week
Sunday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday

Review prior day’s
sales, payroll and
shrink results,
complete paperwork
and Refund Shelf
Audit/Reverse Logistic
Process

Review prior day’s
sales, payroll and
shrink results,
complete paperwork
and Refund Shelf
Audit/Reverse Logistic
Process

Review prior day’s
sales, payroll and
shrink results,
complete paperwork
and Refund Shelf
Audit/Reverse Logistic
Process

Review prior day’s
sales, payroll and
shrink results,
complete paperwork
and Refund Shelf
Audit/Reverse Logistic
Process

Review prior day’s
sales, payroll and
shrink results,
complete paperwork
and Refund Shelf
Audit/Reverse Logistic
Process

Review prior day’s
sales, payroll and
shrink results,
complete paperwork
and Refund Shelf
Audit/Reverse Logistic
Process

Review prior day’s
sales, payroll and
shrink results,
complete paperwork
and Refund Shelf
Audit/Reverse Logistic
Process

Review/Adjust MPT
Plan Actual

Review/Adjust MPT
Plan Actual

Review/Adjust MPT
Plan Actual

Review/Adjust MPT
Plan Actual

Review/Adjust MPT
Plan Actual

Review/Adjust MPT
Plan Actual

Review/Adjust MPT
Plan Actual

Complete/review MPT
To Do List

Complete/review MPT
To Do List

Complete/review MPT
To Do List

Complete/review MPT
To Do List

Complete/review MPT
To Do List

Complete/review MPT
To Do List

Complete/review MPT
To Do List

Update communication
board and post
productivity report

Update communication
board and post
productivity report

Update communication
board and post
productivity report

Update communication
board and post
productivity report

Update communication
board and post
productivity report

Update communication
board and post
productivity report

Update communication
board and post
productivity report

Complete price
changes before
9:00AM and verify
execution using
Storenet Price Change
List

Review planning
calendar on Storenet
(Print/Post)

Print , deliver and
collect weekly account
statements

Process Negative On
Hands from Store Net

Print and post
Gameplan/“Hot Issues”

Price Changes take
place after 6:00PM
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
Complete/submit MPT
Forecast and schedule
by COB

Review prior week’s
results and prepare for
DM call
Ensure all Cycle
Counts, the 5 Walk
Outage Process and
Planograms for the
week are completed

Store Manager
Attends DM/SM
Meeting

Ad Prep / POP signs
every 4th or 5th week
per calendar
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Finalize and transmit
payroll

Prepare weekly
mail/Send Blue Bags
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Conduct Store
Meeting following
Store Meeting
Calendar (New Flexie)
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
Review StoreNet
Reports;
1.
HR Exceptions
2.
Reviews Due
3.
OLC % Complete
4.
Negative On Hands

Management Staff
Meeting once a week,
preferably at the
beginning of the
week to review
previous week’s
results.
Store Manager
“What Matters Most”
Variable Truck Delivery Day Overlay with MPT Workload Forecast Planning
Monday Delivery Day
Sunday

Work Daily Back
Stock Report

Receive
PDQ/MST/Store to
Store ASN’s

Review SOLO
Viewer and
Organize PDQ
Section

Review return
batteries
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Prepare Truck
Returns and
confirm ATIs
Monday
TRUCK DAY
Wednesday
Thursday
Friday
Saturday

Work Daily Back
Stock Report

Work Daily Back
Stock Report
 Work Daily Back
Stock Report

Work Daily Back
Stock Report

Work Daily Back
Stock Report

Work Daily Back
Stock Report


 Receive
PDQ/MST/Store to
Store ASN’s
Receive
PDQ/MST/Store to
Store ASN’s

Review
PDQ/MST/Store
to Store ASN’s
Receive
PDQ/MST/Store to
Store ASN’s


Receive
PDQ/MST/Store
to Store ASN’s
Receive
PDQ/MST/Store to
Store ASN’s


Review SOLO
Viewer and
Organize PDQ
Section
 Review SOLO
Viewer and
Organize PDQ
Section

Review SOLO
Viewer and
Organize PDQ
Section

Review SOLO
Viewer and
Organize PDQ
Section
Review SOLO
Viewer and
Organize PDQ
Section
Review SOLO
Viewer and
Organize PDQ
Section

 Process Store
Use/Known Theft
Items
 Process Store
Use/Known Theft
Items

Process Store
Use/Known Theft
Items
Process Store
Use/Known Theft
Items
Process Store
Use/Known Theft
Items

Enter Back Stock
Quantities From
Truck into scan
gun
 Complete This
Weeks Cycle
Counts
 Complete Call
Backs & Overstock
Directives
* Note All Tasks
should be completed
by 5 p.m

Complete The 5
Walk Outage
Process and
Perform Maxi
Requests as
Needed
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Tuesday
Confirm Truck
ASN when truck
is unloaded
Put away truck
(24 Hours)
 Supply / Add Order
(Check Store Net
for specific time)
 Complete This
Weeks POG’s
 Complete a
Positive Shrink
Hunt as Needed
Daily To-Do List
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6. Team Member Scheduling
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Product Management Basics
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Inventory Basics
Maxi Adjustments
Cycle Counts
Reverse Logistics
Planograms
Back Stock (overstock)
PDQ Program
Daily / Weekly Duties
Inventory Basics
Managing your store’s 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
don’t 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:
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Cycle Count inaccuracy
Refunds processed incorrectly
Ringing multiple quantities incorrectly
Overring (Post Voids not processed)
POS Exchanges / Defect Exchanges processed incorrectly
Theft
Shipping errors
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 (F8’ing) 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
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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
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Week
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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 F8’ing)
Confirm DC Truck ASN
Complete Maxi adjustments
Complete Price Change Front Tags
Place Store Supply Order (One order per week)
Place Add Order
The Advance Way to Manage Inventory
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Store Presentation/Promotion
Daily Store Inspection
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Store Presentation/Promotion
Daily Store Inspection
Daily Outside “Store Inspection”
• Use this process daily when walking the exterior of your
store!
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Green Areas and Landscaping
Parking Lot and Striping
Dumpster Area
Lighting
Sidewalks
Windows and Doors
Window Signage
Store Presentation/Promotion
Daily 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)
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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
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Sales
Gross Margin
Expenses
Profits
Operating Statement Basics
Budgets/Goals
• Performance is measured as a % of Sales and
% of Profits
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Sales % to Budget
Comp Sales %
Profit % to Budget
Comp Profits %
Bonuses are often tied to Sales Performance
Operating Statement Basics
Basis Point
• A basis point is a financial term used to describe One
one-hundredth of a percent
• If a store’s 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
51
Operating Statement Basics
Bottom Line
Total Gross Profit
- Total Operating Costs
= Operating Income/(Loss)
52
Operating Statement Basics
Controllable Expenses
• Utilities
• Maintenance and
Repairs
• Telephone
• Trash Removal
• Payroll
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• Supplies
• Bad Checks
• Cash Variance
Operating Statement Basics
“High Exposure” Controllable Expenses
• Worker’s Comp
• Liability Claims
• Vehicle Accidents
Safety is important both your Team, Customers
and shareholders!
54
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
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The Best Business Plan
The Best Processes
The Most Efficient Operation
The Best Pricing
The Most Inventory
Won’t Guarantee Success!
All things being equal............
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The Store With The Best
People Wins!!