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E and C NEWS

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Highlights of the March 2017 Issue




"Doing something that you truly love for a customer that truly deserves our best efforts. ... I think that it is retail in its truest form.'
Rich Honiball, NEXCOM CMMO


'Our Vendor partnerships are on of the most important relationships ... they understand our mission and their support is invaluable.'
— Samantha Bishop, CGX CMO

'The subject matter expertise of our suppliers and brokers is just as important today.'
— Ana Middleton, AAFES President and CMO

'We are running a very aggressive event calendar ... including vendor-supported promotions.'
— Anita Roberson, MCX CMO

'Grocery products led the way with a 9.0-percent increase to last year.'
— Carey Filer, VCS CMO

Committee, Military Resale Subcommittee Members Chosen for 115th Congress


• WASHINGTON — On Capitol Hill, rosters have firmed up for subcommittees in the 115th Congress with primary oversight of military resale, with Republicans leading as the majority party in both the House and the Senate.

Family and Enlisted Leaders Testify on Resale, Quality of Life


• WASHINGTON — Advocates for military quality of life and senior enlisted leaders testified before the Senate Armed Services Committee (SASC) Personnel Subcommittee on Feb. 14 on a series of topics — ranging from training, OPTEMPO, compensation and spouse employment to military health system reform, commissaries, exchanges, and Morale, Welfare and Recreation (MWR) programs — that affect the lives of servicemembers and their families, readiness, recruitment and retention.

Among those who testified regarding commissaries, exchanges and MWR during the SASC Personnel Subcommittee’s “Department of Defense (DoD) Single Servicemember and Military Family Readiness Programs” hearings were Joyce Wessel Raezer, executive director of the National Military Family Association (NFMA), Master Chief Petty Officer of the Navy Steven S. Giordano; Sergeant Major of the Marine Corps Ronald L. Green; and Sergeant Major of the Army Daniel A. Dailey. The Tragedy Assistance Program for Survivors (TAPS) submitted a statement for the record.

NEXCOM Voices Support for Veterans Online Shopping Benefit


• VIRGINIA BEACH The military exchange services and military Veterans alike eagerly await the debut of the Veterans online shopping benefit (VOSB) later this year. This program, slated to begin on Veterans Day, Nov. 11, will allow military exchange online shopping privileges to be extended to all honorably discharged veterans of the U.S. military. The Department of Defense announced this policy change as a way of recognizing the contributions of servicemembers who served in the military, and to thank them for that service (see E and C News, February 2017).

Resale Tobacco Prices to Match Local Stores by April


• WASHINGTON — Exchanges and commissaries long ago began to plan for declines in tobacco sales that have been impacting military resale top-line sales for at least a decade. It appears even steeper declines in tobacco product sales — and, to a different extent, usage as more patrons quit and/or try to quit these products — might be expected in the near future, as exchanges and commissaries commence compliance with a Feb. 21 Department of Defense (DoD) memorandum outlining “Implementation Procedures for the DoD Pricing Policy,” which directed them to begin taking measures within 30 days to shift to a full pricing parity stance with local retail prices by March 30.

The memorandum, which was issued by Assistant Deputy Secretary of Defense for Military Community and Family Policy (MCFP) Charles E. Milam, built on a preceding April 2016 policy memorandum (No. 16-001). The 2016 memo called for prices in the U.S., its territories and possessions to match the prevailing local price in the community, including taxes, or if in OCONUS, to fall within the range of prevailing prices in military stores in the U.S., pending revision of DoD’s decade-plus-old instruction on Armed Services Exchange Policy (1330.9), which is expected in April.

Milam’s policy memo, intended to amplify and provide implementation procedures, is also supported by language in in Sec. 8034 of the new Defense Appropriations bill for 2017, passed by the House on March 8, which stated, “The Secretary of Defense shall issue regulations to prohibit the sale of any tobacco or tobacco-related products in military resale outlets in the United States, its territories and possessions at a price below the most competitive price in the local community: Provided, That such regulations shall direct that the prices of tobacco or tobacco-related products in overseas military retail outlets shall be within the range of prices established for military retail system stores located in the United States.”

Exchanges’ Final Holiday Season Sales Exhibit Strength


Although the National Retail Federation (NRF), reported that holiday retail sales during November and December 2016 had increased 4 percent over 2015 to $658.3 billion, it also noted that sales at department stores decreased 7.0 percent unadjusted year-over-year. Inside the gate, meanwhile, exchanges fared significantly better than the civilian department store average.

Commissary Coupon, Food Stamp Redemptions Fall in First Quarter


FORT LEE — During the first three months of fiscal 2017, Defense Commissary Agency (DeCA) DeCA patrons saved more than $21 million when combining the dollars redeemed by paper coupons and Commissary Rewards Cards electronic coupons. Coupon redemptions, however, fell 8 percent versus the same period last year, as did Supplemental Nutrition Assistance Program (SNAP), a.k.a. “food stamp,” usage.

According to data provided by the agency, from Oct. 1, 2016 through Dec. 31, 2016 — fiscal 2017’s first quarter — commissary shoppers benefited from $16.47 million in paper coupon redemptions based on 16.4 million redeemed coupons, averaging slightly more than $1 in value.

Although the number of coupons redeemed and total coupon dollars fell through fiscal 2017’s first quarter versus the prior year — by 8 percent and 6 percent respectively — the average value of the redeemed coupons jumped 3 percent from fiscal 2016 totals for the first three months of that fiscal year.

NEXCOM Readies Student Reward Drawing


VIRGINIA BEACH — Since 1997, the Navy Exchange Service Command (NEXCOM) has been offering students a chance to help pay for college through its “A-OK Student Reward Program.” The program invites all qualified students to participate in a quarterly drawing for awards of $2,500, $1,500, $1,000 or $500 for a total of $5,500 per quarter. The next drawing is at the end of this month.

Since the program’s inception in 1997, NEXCOM reported that it has awarded $694,500 in savings bonds and monetary awards to students with the help of its generous vendor partners.

AAFES Joins DeCA, DLA in Logistics Center of Excellence


GERMERSHEIM AD, Germany — Years in planning and preparation finally bore fruit this month as the Army & Air Force Exchange Service (AAFES) joined the Defense Logistics Agency (DLA) and Defense Commissary Agency (DeCA) in creating a “Logistics Center of Excellence” as it opened its new distribution center (DC) at the reconfigured facility here. The move is expected to help the three organizations to collaborate and work even more efficiently together than they were already doing.

The Exchange DC’s relocation to Germersheim came at the request of U.S. Army Europe as part of the European Infrastructure Consolidation (EIC) project, and the grand opening capped off a move more than a decade in the making.

For the Exchange, the new DC ushered in a new era of service for troops and military families throughout Europe and Southwest Asia when it opened its doors here on Feb. 1.

“The Exchange’s work at the Germersheim Distribution Center supports every member of the military community,” said Army Col. Karen Fleming, the Exchange’s deputy director of Logistics. “From here, the Exchange touches the daily lives of warfighters and their families.”


Read More NEWS ...

Texas District 33 Rep. Veasey Visits Exchange Headquarters


"Honoring Veterans' service to our Nation is extremely important. Offering a Veterans online shopping benefit is a way to honor their selfless sacrifices especially those who have served multiple tours. We are honored to welcome them home this Veterans Day."
- Tom Shull, Director/CEO
Army & Air Force Exchange Service

Through the tireless dedication of a large community of Veteran supporters, this new benefit will greatly impact Quality of Life for service members and their families. We extend grateful thanks to these individuals for their steadfast support. ...


Click here for list of VETERAN SUPPORTERS ...



Procter & Gamble, who has brands like Tide®, Head & Shoulders®, Charmin® & Pampers®, through a promotion with the Defense Commissary Agency (DeCA), will bring a once in a lifetime experience to more than 2,000 military youth worldwide this year, through its activation of ProCamps. This experience will celebrate & honor the heroic, resilient and courageous military children and their families, while enabling the commissary to execute on their mission of bringing the military community together. The ProCamps program is a great example of how the Commissary joins hands with industry partners to accomplish so much more than it can alone for these deserving military families.



Working Together for Servicemembers and Their Families


Ana Middleton, President/Chief Merchandising Officer

AAFES has been on a winning streak with a series of innovative store concepts: BE FIT sections, Beauty Pads, and Chef Shops. And it has done what most smart businesses would do if they could — quickly roll these concepts out to as many appropriate stores as possible. Execution on that level is easier said than done, but the MD, Store Ops and suppliers joined forces with strong results. If there’s one thing, however, that Army & Air Force Exchange Service (AAFES) President and Chief Merchandising Officer (CMO) Ana Middleton is acutely aware of, it’s the degree of continued responsiveness and agility required of today’s retail businesses to survive and thrive in a rapidly changing retailing environment. So Middleton, the Exchange team and its partners strive on — to ensure inventory is in the right place when the customer comes for it; to stay on top of shifting trends; and to work more closely with partners to create the compelling store experiences that will keep today’s customers coming back for more ...

E and C News: What opportunities and challenges do you see for the AAFES buying and merchandising teams in the coming year? Are there any categories that need re-focusing?

Middleton: Boundary-less options for shoppers are a must. The Exchange merchandising teams are laser-focused on delivering the best assortment to customers no matter where or how they shop.

A good merchant is continually evolving and looking for the next big thing, and watching the industry for category trends, new merchandising and marketing initiatives, as well as customer engagement strategies that elevate the online and in-store experience.

As discussed earlier, Exchange merchants have enjoyed several successful concept shop rollouts, but the team is not content to rest on its collective laurels, as it continues to look for new growth opportunities. ...



Connecting the Dots ... Customers and Categories


Butner Express, Fort Bragg, N.C.

Coming off a challenging retail environment in fiscal 2016, Rich Honiball, the Navy Exchange Service Command’s (NEXCOM) senior vice president (SVP) and chief merchandising and marketing officer (CMMO), looks at the current retail landscape with a discerning eye. He believes that challenges abound as fiscal 2017 unfolds, but he also sees that Navy exchanges are more connected to their customers and their needs than ever before. In this exclusive interview, Honiball goes over NEXCOM’s current retail objectives, looking at both the challenges and opportunities that await the exchange service during the new fiscal year.

E and C News: What is your impression of the resale environment and NEXCOM now that you have been in the saddle about a year and a half?

Rich Honiball: Personally, I love it! Yes, there are challenges as there are with the retail industry in general. But I believe we are more connected to our customer and have a better understanding of his or her needs.

The team here at NEXCOM, from headquarters to the field, is extremely talented, collaborative and passionate about what we do. And it is a fun environment, doing something that you truly love for a customer that truly deserves our best efforts.

I also think that it is retail in its truest form. While we look for efficiencies and consistency, at the same time we have everything from 180-squarefoot Micro Markets to 180,000-square-foot flagship stores.

We invest the time to better understand each particular base and store and how we can best serve the customer, much like the “general stores” of decades ago. ...



‘CORE MARINES’ The Heart of The Business


Anita Roberson, Head of Merchandising, Marine Corps Business and Support Services Division

With a focus on single Marines, 24 years of age and under, the Marine Corps Exchange (MCX) is moving ahead with numerous initiatives to satisfy its “Core Marine” customers, as well as looking ahead to how to best serve the newest generation of Marines from the “Generation Z” class. In this exclusive interview, Anita Roberson, head of Merchandising in the Marine Corps Business and Support Services Division (BSSD) — the entity that oversees the Marine Corps Exchange (MCX) — outlines the category targets, opportunities for growth, new initiatives, and integrated marketing across all channels, that will characterize MCX business efforts in 2017.

On MCX’s intense focus on the ‘Core Marine’ customer …

Our focus on the Core Marine (single and ages 24 or younger) is at the heart of our business initiatives for 2017. Where we continue to see the growth is in our convenience stores, called Marine Marts. For 2016, our Marine Marts increased almost 2 percent even with some of our larger ones under renovation during the year.

The Millennial customer as well as the upcoming Generation Z are the critical majority of our Marine Mart customers. We have geared Marine Mart operations to focus on convenience shopping, grab-and-go as well as healthier snack and meal options that are all important offerings for both the Millennial and Generation Z customers. ...



‘One More Item … One More Visit’


Samantha Bishop, CGX Chief Merchandising Officer

In early September 2016, Samantha Bishop was named as the chief merchandising officer (CMO) of the Coast Guard Exchange (CGX). In this exclusive interview, she reviews her goals in her new role; how she aims to carry CGX’s recent sales and net profit success story into the new fiscal year, and some of the new programs — such as planogram compliance with the Army & Air Force Exchange Service (AAFES) and auto replenishment — that are set to roll out in 2017.

E and C News: Tell us a little about your first several months as CGX CMO. What are some of your goals in your new role?

Samantha Bishop: I feel so fortunate to have been asked to take on such an exciting role with a great organization. The support I have received from the leadership here at headquarters, in the field, and in the vendor community has been very encouraging. Coming into the new position towards the end of the year was hectic, but it gave me some time to analyze the plans that were already in place for the fourth quarter and take away some lessons learned when planning for 2017.

We are coming off one of our strongest financial years ever. Through the end of December, sales were up 0.3 percent, and gross margin increased 1.7 percent. But our biggest success story is with net profit: a 4.9-percent increase over 2015, which was the second largest profit-producing year in our history!

As impressive as 2016 results have been, we are planning an even better fiscal 2017. We need to build market awareness in our customers of the product, continue our investment in growth, and build enduring vendor partnerships that enable us to support our customers.

Part of my goal the first several months was to begin meeting with our larger vendor partners and review opportunities for the upcoming year. In the military exchange marketplace, I feel our vendor partnerships are one of the most important relationships we have; like us, they understand our mission and their support is invaluable. ...


Click Here for 'ONE MORE ITEM ... ONE MORE VISIT' ...

Making the Emotional Connection


Carey Filer, VCS Chief Merchandising Officer

Veterans and their caregivers’ enthusiastic embrace of the Veterans Canteen Service (VCS) has supported a story of almost constant growth in the current millennium. Carey Filer, VCS’s chief merchandising officer (CMO), sees room for this success to continue as headquarters, merchandisers, store personnel, and suppliers execute on the fundamentals, and as customers discover all that the new breed of PatriotStores has to offer.

E and C News: What are VCS’s goals for sales in fiscal 2017?

Carey Filer: After a solid sales performance in 2016, there is still opportunity for growth in the upcoming year, and we anticipate a 2.5-percent overall sales increase in fiscal 2017.

The plan goal for 2017 for the consumable foods category will be a sales increase of 2.0 percent. While apparel sales were challenging in 2016, we see opportunity in both our men’s and women’s apparel business for the upcoming year, especially in the active sportswear categories. Overall softlines are planned a 4.0-percent sales increase.

Hardlines categories such as home and health and beauty care (HBC) will be planned for a 2.5-percent increase, while the electronics category will be planned flat for 2017. ...



‘A Better Shopper’s Journey’


Some important changes are on tap for 2017 to improve ease of navigation and the patron shopping experience in Navy Exchange Service Command (NEXCOM) wine and spirits departments. In the wine category, more products will be merchandised by type, with new varietal sets rolling out in the spring of 2017. A new branding initiative is also being fielded to provide patrons more insights and information about the products they could potentially purchase. Category captains are also working closely with NEXCOM to develop new varietal planograms and ensure shelf allocation is optimized to industry conditions. ...




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