Careers at AutoZone
AutoZone’s mission is to provide its customers with trustworthy advice and real solutions, ensuring the customer has what it takes to do the job right.
In 1968, following graduation from college, Joseph R. Hyde III began working at his family’s business, a wholesale grocer called Malone & Hyde. Over the next decade, the ambitious Hyde greatly diversified the company’s operations, adding a drugstore chain called Super D Drugs, followed by supermarkets, sporting goods stores, and automobile parts stores.
The company’s first auto parts store was launched in 1979, when Hyde opened Auto Shack in Forest City, Arkansas. He aimed to offer a wide range of products at low prices, targeting them at three types of customers: “do-it-yourselfers,“ “shade tree mechanics,“ (people who worked on others‘ cars for extra income), and “buy-it-yourselfers“ (people who hired others to install parts on their cars).
Hyde also sought to differentiate Auto Shack in terms of the store environment. Employees were trained to be able to offer expert, quality advice. Also, the chain established locations in areas where individuals who worked on their cars lived, and maintained long after-work hours for convenience purposes. Lastly, the venues were clean and bright to stand out from typical auto parts stores.
The strategy was a huge success, and by the end of its first year Hyde had opened seven stores across Arkansas and Tennessee. By the end of the second year it opened 23 more stores, spread across five states: Alabama, Kentucky, Missouri, Mississippi, and Texas. Site research was always conducted beforehand. For its first ten years in business, Auto Shack was launching a new store every week.
Hyde’s business savvy allowed the company to adapt to and benefit from changing market conditions. The cost of purchasing cars was getting more expensive all the time, increasing the market for consumers who just wanted to buy replacement parts instead. Also, Auto Shack’s model of distributing a high volume of goods in numerous stores kept costs and prices low.
By 1982 the company was operating 74 stores, and its Memphis, TN warehouse had grown to 96,000 square feet. Auto Shack kept expanding its presence in new states. In 1985 it started an Express Parts Service that rushed parts to customers who called in over a toll-free service line. The offering enabled the company to provide services to areas of the U.S. without its stores.
In 1987 Hyded divested all parts of Malone & Hyde except for Auto Shack. When a lawsuit was brought for infringement on the “Radio Shack“ trademark, it decided to change its name. It settled on “AutoZone“, which it felt reflected its upscale image. In 1989, it implemented WITT-JR, an electronic catalog customers could use to search parts and keep warranty information.
The 1990s saw many milestones. In 1991 its shares were offered for sale on the New York Stock Exchange. In 1994, it began using satellites for communication between the corporate office and stores. That year, sales hit $1.5 billion. In 1995, it opened its 1,000th store location. In 1996, service was revolutioned when it launched its first website, through which users could make purchases.
Benefits at AutoZone
Business model of AutoZone
AutoZone has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at all consumers who seek auto replacement parts and accessories.
AutoZone offers three primary value propositions: convenience, cost reduction, and brand/status.
The company offers convenience by making life simpler for its customers. It enables consumers to purchase something online and then pick it up in-store on the same day. It also enables them to return core parts (failed replaced parts) they have purchased online at a full refund.
The company reduces costs through various options. It has a section on its website called “Deals & Savings” through which it offers various discounts. It offers free ground shipping on all orders totaling at least $75, as well as orders shipped to APO/FPO/DPO addresses. It allows customers to come in any store to find out why their Check Engine Light is on for free. Lastly, it enables customers to borrow rather than buy specialty tools outright through its Loan-A-Tool program.
The company has established a powerful brand due to its success. It is the second-largest retailer of auto parts and accessories in the U.S., behind Advance Auto Parts. It sells its products through 5,314 locations in 50 U.S. states and the District of Columbia, Puerto Rico, Mexico, and Brazil.
AutoZone’s main channels are its branded retail stores. The company promotes its offering through its website, social media pages, TV/online advertising, promotions, loyalty card programs, in-store signage/circulars, sports sponsorships, and participation in trade shows and conferences.
AutoZone’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website features a section called “Repair Help” with resources such as a troubleshooting guide, automotive glossary, and a video library. It also provides answers to frequently asked questions.
That said, there is a personal assistance component in the form of phone, e-mail, and in-store customer support. There is also a community component in the form of a forum on its site where customers can interact.
AutoZone’s business model entails distributing products to its customers.
AutoZone’s key partners are the store support centers that provide the merchandise for its retail locations; they are based in Memphis, Tennessee; Canoga Park, California; Monterrey, Mexico; and Sao Paulo, Brazil. The company also maintains an affiliate program through which it invites third parties to promote it on their platforms (websites, mobile apps, etc.). Referrals that result in purchases lead to an 8% commission for the parties as well as potential performance incentives.
AutoZone’s main resources are its physical resources, namely its retail stores in all 50 states and the District of Columbia, Puerto Rico, Mexico and Brazil. It has important human resources in the form of store associates who assist customers.
Lastly, it places a high priority on its intellectual property, with its many trademakrs representing important components of its marketing/merchandising strategies.
AutoZone has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of sales/marketing, operating, and administration expenses.
AutoZone has one revenue stream: revenues it generates from sales of products to customers through its retail stores.
info: William C. Rhodes earned a Bachelor’s degree in Accounting at the University of Tennessee. He previously held several leadership roles at AutoZone, including Executive Vice President – Store Operations and Commercial, and was a manager at Ernst & Young.
info: William T. Giles earned a B.A. in Accounting and Management at Alfred University. He previously served as EVP – Finance, Information Technology and Store Development and Treasurer at AutoZone and as CFO of Linens N’ Things.
info: Ronald B. Griffin previously served as SVP, Global Information Technology at Hewlett-Packard Company, as EVP and Chief Information Officer for Fleming Companies, and as Chief Information Officer of Home Depot.
info: Kristen C. Wright earned a B.A. and JD at the University of Arkansas. She previously served as Vice President, Assistant General Counsel, and Assistant Secretary at AutoZone and as a partner at Bass, Berry & Sims.
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