Retail AP Snapshot: Advance Auto Parts

Repairing of modern diesel engine, workers hands and tool. Car mechanic looking at engine for analysis symptoms of car at maintenance repair service station.

Advance Auto Parts is a US-based automotive aftermarket parts and accessories retailer. Established in 1932, the company now operates more than 5,100 stores across all US states, the Virgin Islands, Puerto Rico, and Canada. LPM’s Retail AP Snapshots highlight major AP department programs or strategies that see singular success, according to an outside nomination.*

Give us a snapshot of your department by the numbers.

2017 public figures: $9.37B revenue, 5,000 stores, AP dept. 30-40 people size range

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Website: advanceautoparts.com

What recent program or strategy has seen unique success for your department?

Advance Auto Parts (AAP) deployed a return authorization system 4+ years ago. They started with DIY shoppers and non-receipted returns only, and over time expanded to also include their Pro customers and all return and exchange transactions, including return policy enforcement. More recently, they even added features to help assist AAP personnel ask more probing questions upon return of product with specific warranty requirements.

How did the idea or program/strategy originate?

There was a desire to better manage returns and reduce fraud.

How has your department exceeded the expectations of senior leadership?

The return solution has exceeded savings and profit expectations, and AAP is most proud of 54 consecutive weeks of year-over-year improvement in return rate.

What were the obstacles?

Both the initial launch of the return solution and the expansion into policy denials were obstacles. In both cases, the concern was around the alienation of customers by changing the return experience. However, in both cases it was quickly realized that good customers were not being harmed, and in fact the store was able to spend even more time assisting right customers as a result of the return decision.

What does your department do that pushes the envelope in terms of technology, tools, or approach?

This technology has allowed the AAP AP department to work closely with the merchandising department to ensure the right questions are being asked of the consumer regarding specific products. It has changed their ability to interact with customers.

Do you think other retailers are facing this struggle?

Yes, managing returns and ensuring you are not alienating good customers is a concern every retailer has.

How can retail LP departments help one another succeed?

All are dealing with similar issues. Share your experiences, like in a case study or at a vendor user conference.

What’s on the horizon for your department?

AP is focused broader than just fraud and shrink. Margin improvement is a key phrase. How can the AAP AP department help achieve bottom-line objectives? There are many projects focused on that, like better tracking of battery warranties as one example.

What is your department most proud of in the last year?

Two items:
1. Addressing Hurricane Florence. All the preparation work led to a good outcome.
2. Financial and risk metrics. Exceeded objectives for savings, profit, and return rate reductions.

*Editor’s Note: This snapshot of the Advance Auto Parts asset protection department was submitted by Tom Rittman, vice president of marketing for Appriss Retail.

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