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Shopping Centers Today -> February 2003
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GREAT AMERICAN TAKES FEAR OUT OF AUTO REPAIR
BY KIMBERLY PFAFF
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| Most customers are women, says Janet Beaudry, vice president of marketing. |
Think “automotive service center,” and comfortable leather sofas, jazz and bottled spring water may not be the first things that come to mind. But Great American Tire and Auto Service Centers, Greenwood, Colo., is steadily changing consumer and landlord perceptions of car repair chains, one store at a time.
Consumers as much as landlords are wary of car repair shops, albeit for different reasons.
“When the consumer first comes in, they’re already in defense mode, thinking, ‘I’m going to be taken advantage of,’” said Great American CEO Mark DeRose. “We designed our whole store concept around the integrity of our offering.”
As a result, everything about the Great American environment is designed to put customers at ease. Cars are not worked on in secrecy, but in full view of customers, thanks to large picture windows overlooking the service bays.
“We encourage the customer to walk out and take a look, and we’ll show them what a damaged brake pad looks like,” said Janet Beaudry, vice president of marketing and sales.
In addition to the jazz and the leather sofas, customers find upscale magazines and a signboard with all the prices clearly displayed. Sales staff aren’t separated from customers by intimidating counters.
If all of this sounds distinctly more “retail” than “repair shop,” that’s exactly the point. Said DeRose, “Some of the best retailers in the country have been doing this, and we’ve just tried to bring it to our segment.”
Great American has even adapted the “gift with purchase” idea. Customers who come in for an oil change receive a free Kiehl’s lip balm, courtesy of Nordstrom. The company also offers hands-on clinics on car safety and maintenance. And on Thursdays between 4 p.m. and 7 p.m., customers can get a free chair massage. This year the chain is considering adding a membership rewards program.
Great American, which operates in open-air centers and its own locations, currently has 13 stores throughout suburban Denver as well as in Atlanta, Phoenix, Seattle and the Northern VirginiaÐWashington, D.C., area. The company plans to have a total of 50 units operating over the next three years, but ultimately is aiming for 300 stores.
“We don’t go into a market unless we’re doing a minimum of five locations as quickly as possible,” said DeRose. “We don’t want to be in a market as singles.”
Same-store sales through the third quarter of 2002 were up 14 percent, and sales per square foot range from $253 to $416, the privately held company says.
Great American has two prototypes. One is an 8,000-square-foot building with 10 service bays, and the other is a 10,000-square-foot building with 14 bays.
Another format is its “multifacility concept,” a joint rollout with Shell Oil Co. consisting of a convenience store, a Shell gas station and an automatic car wash on one side and a Great American on the other. Great American owns the entire facility, but Shell operates its own side, with extensive cross-marketing at both ends. “It’s a one-stop shopping environment,” said DeRose.
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Great American is, by necessity, a suburban offering, because it needs about two to two-and-a-half acres per unit. The suburbs are also where its customers are. According to the company, customers are typically college-educated and married with children. They have an average household income of $60,000, and own two cars. Sixty percent are women. They also have a “do it for me” rather than a “do it yourself” mentality. “They don’t change their own oil,” said Beaudry.
The company is working hard to change stereotypes among developers and in communities about auto service stations.
“There’s a real image problem out there,” DeRose said. “But the fact that we don’t display tires outside of our building, that we don’t work on cars outside, distinguishes us from the rest.”
Still, convincing developers that the chain is different is tough sometimes. That was certainly the case with Cincinnati-based North American Properties, a regional developer of enclosed and open-air centers, which originally opposed putting an automotive tenant into its Publix-anchored shopping center in suburban Atlanta.
“But Great American not only convinced us they could present it in a way that would be appealing aesthetically and promote cross-shopping,” said Mark Toro, a partner at North American Properties, “they actually committed to it in a binding document that specified certain restrictions: no cars overnight in the lot, etc.”
The lease also gives the landlord the right to review and influence Great American’s architectural design and signage to ensure that the tenant blends with the rest of the center.
To create additional expansion opportunities, Great American has a sister development company, ServiceStar Holdings, which focuses on “village center” concepts — smaller, non-anchored centers that typically feature such local conveniences as banks, nail salons and dry cleaners. Communities prefer these small-scale centers, DeRose said. “We try to make them blend in aesthetically, and we work with neighborhood associations.”
One village center is located near Saddle Rock North, a 700-unit residential community in Smoky Hill, Colo., near Aurora.
“We’d like to do other deals with them,” said Gary Aalen, president of the mountain land division of U.S. Home Co., the project’s developer and a wholly owned subsidiary of Miami-based Lannar Corp. “We see this retail center as an amenity, a benefit to the community. It helps to sell houses.”
People like the convenience, Aalen noted, praising a company that worked to calm the fears of customers, landlords and its neighbors.
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