During the company’s fiscal second quarter financial results conference call, Monro Inc. president and CEO Brett Ponton updated analysts on a number of initiatives underway at the vehicle service and repair chain. Among them is a program launched at the beginning of the current quarter (for Monro, that’s the third quarter of fiscal 2019) to standardize the company’s in-store operating procedures.
This initiative, which the company calls the “Monro Playbook,” is centered around establishing brand standards for all of its locations. The program launched at 30 pilot locations in the Rochester, NY area.
“We have trained our teams at these stores on our in-store operating procedures, which take an educational approach to the customer-selling process and include clearly defined roles and responsibilities for our teammates,” Ponton explained. “Our objective is to empower our teammates as expert advisors who can clearly and professionally advise our customers on their options based upon their specific vehicle’s needs.”
Monro also has begun to implement brand standards designed to align the appearance of its shops. Thus far, the company has refreshed the appearance of four of its 30 Rochester pilot locations. “So far, our store refresh initiative is showing encouraging signs of traction,” Ponton said.
He added: “While we are still in the early stages of the refresh, the double-digit improvement in comparable-store sales we have seen at these locations since launch reinforces our confidence in the rollout of this initiative across our store base.”
Once this pilot phase is complete, management plans to roll out its brand operational standards across Monro’s store base and modernize its portfolio of 1,179 locations over the next three to five years. Ponton said management will be mindful to determine the appropriate scope of refresh needed for each of its stores by examining their age, size and market demographics “to ensure we are investing the appropriate amount of capital to achieve the highest possible returns.”
He told analysts that the company also made strides in management’s customer-centric engagement initiatives during the fiscal second quarter.
“As planned, we launched our data analytics-based [customer relationship management (CRM)] platform, which will enable us to leverage customer data and insights to deliver tailored messages and service recommendations to our customers based on their specific vehicle needs,” Ponton stated. “Our new CRM platform is the core foundation of our data-driven marketing strategy and will be instrumental in the development of long-term, one-to-one customer relationships to drive higher customer retention.
“Through this database, we are able to repurpose our marketing spend to invest in higher ROI channels and customer acquisition campaigns.”
During the quarter, Monro also rolled out its modernized retail and corporate websites — the first phase in management’s omni-channel initiative.
“Our new retail website better positions us to address our customers’ needs. Importantly, it also better showcases the solutions we provide to our customers, including our good/better/best product and service packages,” Ponton said on the call. “Only a month after the launch, we are encouraged to see that this new format is driving more traffic and keeping our customers engaged on our website longer.
“We are excited to report that we have experienced a double-digit increase in the number of new visitors and the average time spent on our site since launch. Additionally, the upgrade to a mobile-capable architecture has translated into a 40-percent increase in mobile appointment conversion rates.”
Ponton also told analysts that Monro was able to return to a flat staffing model during the fiscal second quarter by “rightsizing” overstaffed stores, offsetting the labor deployed to understaffed stores last quarter. “Our store technician labor optimization translated into a gross margin tailwind this quarter and will allow us to achieve overall greater store efficiency going forward,” he said.
Ponton added that Monro is on track to implement a cloud-based, data-driven store staffing and scheduling system during the first quarter of fiscal 2020. The goal here is to drive further staffing efficiency by rebalancing the level of technical skills in each shop so that Monro’s locations are staffed with technicians that have the appropriate skill level for the services needed.