Pep Boys Banks on Rebranding Effort 'The Road Ahead'

Pep Boys is mapping a return to its glory days -- back when its famous founding trio, Manny, Moe and Jack, 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 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%. "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. But, overall, car dealers are really making inroads into the do-it-for-me market," said Mintel analyst Colin Bird. "Pep Boys realized they need to step up their game." Pep Boys straddles two sub-categories in the auto aftermarket. It sells car parts, like AutoZone, but also offers maintenance and repair service, like dealerships, independent mechanics and specialty providers such as Jiffy Lube. Dealers may, in fact, be Pep Boys' biggest competition as the company looks to boost profitability. According to Mr. Bird, dealers derive 55% of revenue on new-car sales; 30% from used-car sales; and 13% on parts and service. However, parts and service make up more than half of their total profits, which helps explain why carmakers such as Ford and Chrysler 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 has also ditched price-based tagline and jingle "Everything for Less" and moved to a more relationship-based message with "Trust the Boys to Get You There." Mullen, Winston-Salem, N.C., handles creative for the brand, which spent $23 million on measured media in 2013, according to Kantar Media. The company is tackling two main initiatives. 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," said Mr. Stoupa. 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.

Pep Boys Banks on Rebranding Effort 'The Road Ahead'

Featured Stories