Highlights of March 2014 Issue
EXCHANGE CHIEF MERCHANDISERS LOOK AHEAD
With fiscal 2013 in the rear-view mirror and fiscal 2014 in their immediate sights, exchange chief merchandixers Ana Middleton (AAFES), Anita Roberson (MCX), Tess Paquette (NEXCOM) and Sarah Malbon Mikus (CGX) discuss new product offerings, retail and systems initiatives they expect to drive success in the coming year.
In her role of chief merchandising
officer (CMO), Ana
Middleton has her finger firmly
on the pulse of the Army & Air
Force Exchange Service's Merchandising
Directorate (MD). In this
exclusive interview with E and C News, Middleton talks
about the directorate's sales and merchandising goals,
branded products and store-in-store success stories, and
the MD's areas of focus today and into the near future.
On the Merchandising Directorate’s most successful recent initiatives …
The SIS concept shops have been an overwhelming success and have resonated
with Exchange customers. Our Childrenswear pricing strategy continues
to drive sales and increase margins through strong unit growth. The assortment
and price points provide unparalleled selection and value for military shoppers.
An active lifestyle has always been essential to the military customer. One
way the Exchange addresses this is by focusing on the Operation BeFit! initiative.
This effort is in line with who our customers are and how they live.
Knowing how important it is to maintain an active lifestyle, the Softlines
division pays special attention to athletic wear and footwear. The Exchange
is offering brands that align with customers' needs. The Hardlines division is
supporting active lifestyles by offering a BeFit! line of fitness accessories and
equipment to include wearable technology.
The Consumables division is bringing more healthful food options, to include
a dedicated BeFit! endcap, into Express stores.
On sales goals in Hardlines, Softlines and Consumables in 2014 …
We'll focus heavily on eCommerce in 2014. Unlike our competitors, our
customers must be authorized to utilize the benefit of their Exchange. With the
additional challenge that the majority of our customers live 20 miles or more
away from an Exchange, it is clear that the assortment on shopmyexchange.
com must be comprised of our best brand portfolio. Building parity into the
online assortment with our brick-and-mortar assortment allows customers not
living on or near a post or base to be able to take advantage of the same national brands — at fiercely competitive prices — as those who live on base or on post.
So far, we've accomplished 16 percent parity, and our buyers are continually
working to further match online assortments and store assortments.
The communication of the new “branded” online assortment will be critical.
We'll need the support of every Exchange associate to help spread the word and
invite customers to shop our new and improved online store. We are looking
forward to the launch of the new website, as these changes will help us remain
competitive far into the future. ...
Read more AAFES CHIEF MERCHANDISING OFFICER ANA MIDDLETON ...
Semper Fit and Exchange Services Division Merchandising Branch Head Anita Roberson is upbeat about the coming year.
The Marine Corps Exchange (MCX) had numerous successes to point to in fiscal 2013, and the future looks sharp thanks to
a slate of aggressive retail system changes on the menu in 2014.
Like the Marines it serves, the MCX approaches business as an organization on the front lines of the retail battlefield — after
all, it literally is. Deployed MOS Marines run MCX operations in Afghanistan, while headquarters and store-level staff confront the
toughest realities of delivering a benefit in the form of a compelling and competitive retail enterprise on the homefront and overseas.
On the biggest areas of change or adjustment for the MCX in 2014
We continue to see our transaction counts increasing
year over year. Over the past eight years,
we have seen significant growth. Although all store
types are increasing, we have seen the most growth
in transactions in our main store category, which
has increased 73 percent in the past eight years. In
that same time frame, our average sale continues to
grow year over year as well, so our traffic is stable.
Our military patrons continue to be more and more
knowledgeable of the products they are shopping for
before they enter the MCX. This certainly drives us
to ensure our sales associates and sales managers
have a good depth of product knowledge in their
tool box, and that we continue to focus on product
education and training so that they are comfortable
with their interaction with the customer, no matter
what the product is.
Providing options for our sales associates has
been a focus of our merchandising team over the year
and will continue to be a priority throughout 2014. ...
Read more SEMPER FIT AND EXCHANGE SERVICES DIVISION MERCHANDISING BRANCH HEAD ANITA ROBERSON ...
It's hard to imagine a busier year than the one the
Navy Exchange Service Command (NEXCOM) and Chief Merchandising Officer and Senior Vice
President Tess Paquette took on in 2013. They stood
up the supply chain team and integrated it with the
buying group and IT, to improve the ways product
gets to the shelf, at the right prices, when customers
expect it. The “A Better You” program has expanded
system-wide, defining the NEX as a destination for
a healthy lifestyle. And right after a successful Navy
Blue Holiday event, both ashore and afloat, NEXCOM
launched a major new “everyday low price” program
on essential family products, cementing NEXCOM's
identity as a price leader for Navy patrons. In this
exclusive interview, the NEXCOM CMO explains
the thinking behind the merchandising and supply
chain groups' new strategies.
E and C News: Although the year is still not
quite complete, looking back, what have been
some of the most rewarding moments of fiscal
Tess Paquette: Obviously, the one that stands
out the most is the execution of a detailed plan for
our Navy Blue Holiday.
In 2012, we didn't have as much time to plan as
well as we would have liked. This year, however,
we were able to apply lessons learned from 2012 to
create multiple engagement components for the program
and truly get the enterprise on board, including
Ships Stores. We created a Ships Afloat event that
was strictly for the Sailors at sea.
We also created an enterprise-wide giveaway
event featuring $100 gift cards for 1,000 customers
across all of our channels, which was wonderful.
This encompassed CONUS and OCONUS, and also
included our hospitality segment, the Navy Lodge,
which extended its sites into the marketing piece of
it. They were connected. Our Telecommunications
Program Office (TPO), with its free WiFi, also promoted
the event. So we leveraged the entire NEXCOM
enterprise channel to market the Navy Blue Holiday. ...
Read more NEXCOM SVP AND CHIEF MERCHANDISING OFFICER TESS PAQUETTE ...
Despite having a multitude
of new initiatives
and system rollouts on the front
burner, Coast Guard Exchange
(CGX) Chief Merchandising Officer
(CMO) Sarah Malbon Mikus and her headquarters and
store-level teams never lose sight of the fact that they
deliver the exchange benefit to the men and women of
the Coast Guard and Homeland Security, among other
eligible government patrons.
During the past three years of guiding the CGX's merchandising
operations, Malbon Mikus has reshaped many
of the exchange service's product offerings and improved
the shopping experience, with not only a keen eye for
innovation and differentiation, but also with a view to
keeping the business on a sustainable tack.
The “newness” is far from over. Get ready for more
retail fireworks as CGX goes live with upgraded merchandising
and planning systems, an expanded eCommerce
assortment, and a full slate of store renovations in 2014!
On fiscal 2014 sales goals and
other objectives …
2014 is going to be a very busy year for CGX! We
are continuing to expand our eCommerce assortment,
implementing a new enterprise resource planning
(ERP) system, and continuing with our aggressive
rollout of store renovations … all while our buyers
are challenged with managing very broad product
We are going live on our new merchandising system,
MI9, this month and will begin implementing
our new planning system, Maple Lake, in May 2014.
As I am sure you know, implementing one of these
systems is challenging enough, so you can imagine
how stretched our team is this year implementing
two systems back-to-back.
These new systems will vastly improve our replenishment,
planning and analytical capabilities and will achieve efficiencies
in our current workflow. Our merchants and stores are very excited about the
enhancements these systems will offer!
Our efforts to renovate our stores continue. In January 2013, we opened a
new store in Petaluma, Calif. Now, we have remodeled CGX locations in all
five training centers of the Coast Guard and completed this in five years. We
renovated our flagship store in Chesapeake in August 2013. We are opening
a new store at the new Department of Homeland Security headquarters at
St. Elizabeth's in Washington, D.C., this month, and will open new stores in
Galveston and Houston, Texas.
We are planning sales conservatively in 2014 with a 2.7-percent increase.
We expect the reduction in Coast Guard active duty personnel, sequestration,
and a very challenging retail environment to pressurize sales in 2014. ...
Read more CGX DIRECTOR OF MERCHANDISE SARAH MALBON MIKUS ...
Procter & Gamble, through a promotion with the Defense
Commissary Agency, will bring a once in a lifetime
experience to 1,500 military children worldwide this year through
its activation of ProCamps. This experience will celebrate
military children, support the Department of Defense Healthy
Base Initiative and enable the commissary to execute on the
mission of bringing the military community together. This 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 military families.
Procter & Gamble is
presenting this program
under their Family Unit
platform, which is a
partnership with the USO to
provide resources, information
and offers to military families. ...
Read more PROCAMPS ...
The Marine Corps Exchange (MCX) health and
beauty care (HBC) assortment put up another
excellent sales performance in fiscal 2013.
“Our two biggest growth areas were baby care
and vitamins,” noted Bob McLaughlin, divisional
merchandise manager, Consumables, Semper Fit and
Exchange Services Division.
“In baby care, we are continuing a commitment
to expand the category, and to being a one-stop destination
for our Marines and families,” he said. “We
include diapers and formula in the ‘Extreme Value’
Program, where we guarantee our everyday prices
will beat the competition, i.e., Wal-Mart and Target.
Our patrons have come to expect we will have
the necessities that they need, when they need it
and at a great value.”
In vitamins, McLaughlin said that the MCX
partnered with Pharmavite, “the industry-leading
vendor,” to bring a new assortment to exchange
customers. “They provide the full line of vitamins,
and at a low price, with great promotional
opportunities for our customers,” he explained.
“We have reset the planograms in all of our main
stores and have revitalized a business that was
Read more DELIVERING EXTREME VALUE ...
The current atmosphere of regulation and deglamorization is among
the factors having a major impact on sales of beer in Army & Air
Force Exchange Service (AAFES) stores.
“Alcohol was removed from some facilities as a result of installation
command requests,” noted David “Kye” Corn, the exchange service's senior
buyer for beer (see E and C 12/13). “This was in addition
to troop drawdowns,” the buyer noted, as force
repositioning has also taken a toll on store traffic,
where some patrons have returned Stateside but may
no longer live on base, or in such close proximity to
an exchange. ...
Read more ADAPTING TO A CHANGING ENVIRONMENT ...
The Navy Exchange
(NEXCOM) General Merchandise
Group (GMG) has
had to adjust to the latest rules and regulations governing
the sale and availability of alcoholic beverages
on Navy installations (see E and C 12/13).
Working in concert with affected locations, the
exchange service hopes to ensure that these required
changes are in force while minimizing their impact,
as much as possible, on business.
“We worked closely with all affected locations,
during the summer and fall months, as required
changes occurred,” noted NEXCOM Wines and Spirits
Buyer Debbie Scher. “We are sensitive to the stores'
requests and accommodate their needs. Fiscal 2014
sales plans for the wines and spirits department have
been scaled back based on the 2013 directive, and
we have experienced initial sales results [that have
been impacted by these adjustments] through the
back half of 2013.” ...
Read more MAXIMIZING SALES, OPTIMIZING REPLENISHMENT ...