PHILADELPHIA (April 3, 2014) — Automotive aftermarket retailer Pep Boys – Manny, Moe & Jack is mapping a return to its glory days — back when its famous founding trio knew their customers by name and lifelong relationships were forged.
“I keep telling our associates that in the year 2014, I expect [them] to have relationships just like Manny, Moe and Jack had back in 1921—when customers came in, and they knew each and every one by name. That’s the kind of service that people are looking for,” said Ron Stoupa, who has led marketing for the Philadelphia-based aftermarket chain over the past four years.
The focus comes as Pep Boys grapples with a fundamental shift in auto care from a do-it-yourself model to a do-it-for-me model, and as the company faces increased scrutiny from Wall Street.
Its most-recent quarterly results disappointed investors with lower-than-expected earnings and revenue of $507 million. For the nine months ended Nov. 2, comparable store sales fell 1 percent.
“Our research shows that Pep Boys is a well-recognized brand by two-thirds of consumers, and customers recognize [it] as having knowledgeable staff, clean stores and good prices,” said Colin Bird, an analyst with marketing research firm Mintel Group Ltd. “But overall, car dealers are really making inroads into the do-it-for-me market.
“Pep Boys realized they need to step up their game.”
The company straddles two sub-categories in the auto aftermarket. It sells car parts, like AutoZone, but also offers maintenance and repair service, like car dealerships, independent mechanics and specialty providers such as Jiffy Lube Inc.
Auto dealers may, in fact, be Pep Boys’ biggest competition as the company looks to boost profitability.
According to Mr. Bird, car dealers derive 55 percent of revenue from new-car sales; 30 percent from used-car sales; and 13 percent from parts and service.
However, parts and service comprise more than half of their total profits, which helps explain why car makers such as Ford Motor Co. and Chrysler Group L.L.C. are building standalone quick-service centers on dealer lots, such as Ford’s Quick Lane Tire & Auto Centers and Chrysler’s Mopar Express Lanes.
Pep Boys is fighting back with a “holistic” rebranding — changing not only its marketing and advertising strategy, but revamping store interiors and exteriors, implementing new customer-service training programs and recalibrating its internal culture. Even its signature Manny, Moe and Jack caricature logo has been redesigned.
Pep Boys also has ditched its price-based tagline and jingle “Everything for Less” and moved to a more relationship-based message with “Trust the Boys to Get You There.”
Boston-based agency Mullen Communications Inc.’s Winston-Salem, N.C., office handles creative for the Pep Boys brand, which spent $23 million on measured media in 2013, according to Kantar Media, a unit of WPP P.L.C.
Pep Boys is tackling two main initiatives through its “Road Ahead” format launched last year. The first is complete store redesigns and the second is employee retraining.
The company estimates a cost of $525,000 and three to four months to transform a supercenter store into its “Road Ahead” design, which includes modern wood and stone exteriors. Inside there are streamlined shopping zones and a large customer lounge with leather chairs, TV, WiFi and coffee bar.
Employees in those stores will go through a “cycle of service” intensive retraining, Mr. Stoupa said. Employees in the rest of the U.S. stores are going through the same training on a smaller scale while they await their own market overhauls. All of Pep Boys’ 800 stores are company owned.
Pep Boys’ approach is in line with the changing market. As cars become more complicated with more software and computerized parts, consumers are less likely to work on their own vehicles.
“The do-it-for-me crowd is growing fast and the do-it-yourself crowd is shrinking,” Mr. Stoupa said. He used himself as an example, explaining he entered the market as a young man and DIY-car guy with a 1977 Thunderbird, “a lot of time, no money and a lot of knowledge.”
Today he’s in the other camp — as someone who has more money, no time and less knowledge of his 2010 Infiniti.
This report appeared in Advertising Age magazine, a New York City-based sister publication of Tire Business. Ms. Bulik is a free-lancer and frequent contributor to Ad Age.
In terms sales and revenue, how is your business shaping up in 2016 vs. 2015?
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32% (45 votes)
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