ECN CoverE&C Commissary News

Editorial Comment — May 2018

What’s Next? …

The military resale community owes a big “Thank You!” to its exchange side for helping DeCA generate additional income: expanding use of the Military Star card to commissaries, by enhancing the convenience and relevance commissaries bring to their patrons, could help bring sales back up.

The exchange systems also deserve gratitude for their part in providing the flexibility for DeCA to sell beer and wine in commissaries; as we’ve all heard by now, sales will be starting soon. Although this came at some considerable risk to the exchanges’ business model, they went along with it for the betterment of the whole.

On top of this, DeCA Interim Director Robert Bianchi has also been given approval to allow agency employees to have shopping privileges in commissaries.

Now, the military resale community and marketplace wait patiently to see how far the movement toward resale consolidation progresses, and how soon.

Even the barest minimum, the back-office endeavors, requires robust effort to get over the first major hurdle: Information Technology (IT) compatibility.

Estimates in the Pentagon and elsewhere of the cost to leap that hurdle, we are told, range from $100 million to several hundreds of millions of dollars. After all, this is not a case in which just two simple legacy systems will have to be integrated, but many; and somehow the exchanges’ various systems will need to merge with the commissary’s dozen or more legacy systems and its emerging Enterprise Business Solution (EBS) — or vice-versa. And that’s just the beginning. The experts at Forrester say that when it comes to the cost of enterprise IT deployment, “It’s not the software that will get you; it’s the miscellany,” especially the data integration, which can be one of the most difficult jobs in IT.

It’s worth noting that only a few years ago, the Pentagon spent more than five years and reportedly more than $100 million in a failed attempt to integrate the armed services’ separate subsistence food service legacy IT systems.

But cost is one thing; getting it right is another. It’s imperative that service to 11 million customers not be affected and systems not break down in the process. Cranking together the different exchange service IT systems will be a challenge in itself, no question. Complicating the equation, at the same time, commissaries will need to shift to a profit-and-loss (P&L) accounting basis. All these things are achievable in theory; but achieving them is very resource intensive, and they typically require extensive time horizons. Still, they can be done ...

Probably the main question, and the most crucial, on many minds is, “Who will be the Resale Czar?” — the leader of the entire system who will pull all the services and agencies together, to work in the same direction. Who is in the running? The current group of resale leaders? A cast of newbies? Dusted-off oldies?

Whoever is chosen — although sources tell us that the decision has already been made — we sure hope he or she is up to speed on all the workings of each of the services and has plenty of retail savvy and experience. This cannot be his/her first rodeo. As the leader of one of the largest retail organizations in America and the world, there’s little time for a learning curve.

It should be mentioned that the leadership cadres of the exchange systems have been spectacular during this transformation process, with both their time and assistance … and whoever takes over MUST visit each and sit down with their respective teams … then put together a powerful team — like each of the exchanges has — to run the commissaries.

It would also be very valuable for the new enterprise leader to visit a few commissaries unannounced and talk with a good number of patrons. Commissary and exchange customers are usually quite willing to talk about their experiences and thoughts about shopping their stores. Listening will take on added importance in the new resale system. Too many customers have already proven that they will quietly drift out the door, silently shifting their shopping elsewhere if their selections, savings and service are eroded, leaving management with the very challenging and costly task of figuring out how or what went wrong, and how to win them back.

Speaking of serving the patron … let’s make sure that the shelf-stocking issues are cleared up, that the viability of the exchange systems isn’t compromised, and that all involved keep in mind the purpose of the resale system, as clearly stated both in current law and in proposed “defense resale enterprise” legislation: to enhance the quality of life of members of the uniformed services, retired members, and dependents of such members … .

We hope that a specific set of guidelines is put in place so that, although they will be authorized patrons, employees see to it that military members always have first choice! It would undermine not just commissaries but the entire system if patrons were to arrive at their stores only to find empty shelves or depleted facings, or the best deals all gone, because commissary shopping privileges had been expanded and those who were already in the store got there ahead of the servicemembers, retirees and their families. Though some might consider this a small detail, it’s a critically important one to get right.

And it is in just such details where the devil is.

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