Executive insight: on the road to becoming a great retailer
Former Best Buy and Advance Auto Part executives are the newest members of the senior leadership team at the 2,216-store Bridgestone Retail Operations group where chairman and president Stu Crum wants to do the unthinkable.
Crum wants to eliminate the smell of rubber from the company’s stores and see the Firestone name mentioned alongside companies such as Nordstrom and Starbucks during conversations about retailers who provide a great customer service experience.
“We are trying to change the fundamental way we do business,” Crum said. “We want to be the most trusted provider of automotive care in every market we serve and be regarded as one of the top retailers in the country.”
Being regarded among the best in the retail industry is a fundamental shift and a huge opportunity for a company whose retail stores, branded primarily as Firestone Complete Auto Care and Tires Plus, are synonymous with tire and basic automotive maintenance and repair. It’s why Crum joined the Bridgestone Retail Operations (BSRO) team in August 2013 and has since developed a new strategy and new operational structure that includes infusing the $4 billion organization with retail talent.
Damien Harmon, former VP of category and merchandising operations at Best Buy, recently joined Bridgestone Retail Operations (BSRO) as VP of operations to oversee and newly restructured operations group. Amy Bonder joined BSRO as VP of sales after previously serving as VP of commercial sales for strategic accounts with Advance Auto Parts. Under Crum’s leadership the company also recently added customer insights capabilities and created a category management structure for its merchandising organization. A soon-to-be-hired director of category management will oversee five category managers who are responsible for BSRO’s major business units such as tires and related services, batteries, oil, brakes and diagnostics.
“We never had category management before so we had not been as disciplined in managing these areas as we needed to be,” Crum said.
Discipline is especially important in the tire area as wheel sizes have expanded in recent years causing BRSO stores that sold roughly 14 million tires last year to stock as many at 1,300 tires capable of fitting wheels ranging from 13 inches to 22 inches.
Other big changes related to a restructuring of the field operations group to ensure stores are executing the new retail oriented operating philosophy. The company’s old approach had divided the country into six zones with 97 district managers and store supervisors who in some cases were overseeing as many as 30 stores. Crum took the six zones and turned them into two divisions and then created 22 regions with 216 areas. Area managers still perform the functions of district managers but they oversee somewhere between eight and 10 stores. The net effect is that with roughly 10 stores under their purview the 216 area managers will be able to be in each of the stores a minimum of two times a week.
“The good news about what we are doing is we have a great platform, we are very profitable and we have a good group of people. But we’ve just been good and our challenge is to take this company from good to great. We have set out a clear roadmap over the next six years to do that,” Crum said.
In addition to the strategic and structural changes, plans call for BSRO to begin investing more aggressively in the business to enhance the store experience. More than 700 of the company’s stores will be remodeled during the next two years to remove old-fashioned customer service counters and upgrade technology so employees will be equipped with tablet computers. The store experience will also be refreshed. Crum wants to include merchandise displays from key suppliers so customers better understand the breadth of products offered at company stores whose selling space is now dominated by a wall of tires.
“We have not invested in the business like we should,” Crum said. “Right now when you go in our stores it smells like rubber and like you are in a tire store. We want that experience to be very different.”
Other investments are coming in the area of employee training to enhance skill levels of technicians and deepen product knowledge. For example, 8,000 of the company’s technicians are receiving new training as part of a goal to increase to 70% from 60% the number of technicians certified by the National Institute for Automotive Service Excellence (ASE).
Crum acknowledges that he is asking the organization to digest a lot of change and he has been methodical in communicating that change to all layers of the organization since arriving. However, if the formula works the payoff could be huge. BSRO will be able to improve the productivity of its existing locations and then fund an accelerated growth strategy that could have the company opening as many as 40 new stores annually by 2016. It is all part of a strategy to gain share in a $91 billion industry where Crum figures BRSO has somewhere between a 3.5% and 4% market share of a growing market that is also undergoing considerable change.
Crum’s counterpart on the original equipment side of the Bridgestone Firestone business, Mike Martini, explained there will be an unprecedented amount of technology in the coming decade as carmakers look to meet new mileage standards that take effect in 2025. Martini describes his role as making sure automakers put Bridgestone and Firestone tires on new cars.
“The amount of technology that is going into vehicles between now and 2025 will be astounding. We are going to see an explosion in technology in the auto sector that we haven’t seen since 1910,” Martini said.
Already, some cars are featuring taller and narrower tires due to their aerodynamic benefits, nine- and 10-speed automatic transmissions are coming and so too are autonomous cars.
“I’m all for these autonomous cars because we are all going to be safer,” Martini said, referring to the approximately 30,000 lives that are lost annually in motor vehicle accidents in the U.S. and projections that have the number of vehicles worldwide doubling to two billion by 2035.
That’s a lot of cars that will need tires, service and related products. With no clear industry leader in the U.S. market currently, Crum’s vision for BRSO is to deliver the type of retail and customer service oriented experience that will allow it to achieve that distinction.
“We are going to do something that has never been done before and by 2020 we will be recognized as one of the top retailers in the country,” Crum said.