Retail is the most competitive sector in business today with rapid innovation in the customer journey and the “last mile” of fulfillment. Like other retailers, the Army & Air Force Exchange Service must innovate and evolve to meet ever-increasing customer expectations, and technology is playing a significant role in that effort. Unlike other commercial businesses, though, the Exchange serves a fixed customer base with a wide range of formats and operates globally, from Greenland to South Korea and many austere and remote locations. Technical and retail industry expertise and best practices continue to drive transformation to allow the Department of Defense’s oldest and largest retailer to deliver on its promise to go where troops go to protect and defend our nation.
"Competing every day with the best online and brick-and-mortar retailers gives the Exchange a unique blend of commercial efficiency and passion for improving military readiness and Quality of Life"
The Exchange serves active-duty Soldiers, Airmen, and their families as well as retirees and other honorably discharged veterans. This fixed customer base combined with a mission to return earnings to critical military Quality-of-Life programs, including Army Child Development Centers and Fitness Center, Air Force Outdoor Recreation and more, means every authorized Exchange shopper is especially important to the organization and its support of the broader military mission.
Leveraging a team of data scientists, our goal is to know each customer better than any other retailer and add value at every touch point throughout their military career. Our vision is a customer journey around the “Digital Garrison” to simplify day-to-day interactions.
In 2018, mobile and online usage continued its rapid growth. The Exchange added capabilities such as a mobile app for its Military Star proprietary credit card and worked with Army Morale, Welfare and Recreation to facilitate acceptance at its on-installation activities to include bowling alleys and Childcare Centers. Alliances and partnerships to include DoD benefits providers strengthens support of Soldiers, Airmen and their families.
The Exchange’s mobile app leverages blue/green deployment, enabling continuous enhancements with no customer downtime. We created a micro service for Veteran Status Authentication accessible across the Digital Garrison. In 2019, we will expand our mobile shopping experience and loyalty program, integrating facilities from the barbershop to the food court and movie theater. Our secure customer information hub, digital backbone for real-time integration and agile development methodology are keys to remaining relevant in this fast-paced environment.
In addition to connecting their online lives, the Exchange is eliminating friction for our customers in the physical world. In 2018, we added more than 100 Ship from Store locations to improve inventory efficiency and provide fast delivery; we also launched “Buy Online Pickup In Store” (BOPIS) to provide a low-cost fulfillment option with a convenient way for our customers to get what they need. In 2019, we will optimize and scale those capabilities while we evaluate self-checkout and lockers to provide flexibility and convenience. Supporting these capabilities will be improved employee mobility solutions, while on the back-end we continue the deployment of an ecommerce-optimized Warehouse Management System to the Exchange’s new Distribution Center in Korea. As this occurs, design of a Distributed Order Management System is ongoing to route orders in the most efficient way possible.
The Exchange operates many lines of business including department stores, convenience stores, quick serve restaurants, military clothing stores, specialty stores and movie theaters along with a variety of services and concession operations. In 2018, we enhanced our digital backbone by deploying a common Point Of Sale system, tying together those customer-facing touch points. In 2019 and beyond, that platform will enable us to improve service through more relevant and consistent promotions and rapidly deploy new capabilities on a modern platform. Digital signage and shelf labels will bridge the divide between customers’ online and in-store experience. Technology modernization and a common platform also means less employee training and development for IT. We will leverage other commercial technology, such as Robotic Process Automation, to eliminate tedious, labor-intensive tasks and allow employees to focus on serving our customers.
Other retailers choose locations most favorable to their business, but to serve our customers the Exchange must go where they go. Today, we operate in 49 U.S. states and 34 countries. Some facilities are in challenging locations such as Afghanistan or supporting military exercises in Eastern Europe. This year I heard something that I had not heard in my 20 years of retail before joining the Exchange, “A rocket hit our store.” Yes, that happened. Fortunately, no one was hurt and the store reopened two days later. The Exchange also supports military installations in times of emergency with Mobile Field Exchanges (53-foot trailers, with fully operational Point of Sale Systems, that function as stores on wheels), such as the hurricane that hit Tyndall Air Force Base in Florida in 2018. It is almost an understatement to say, the Exchange’s mission requires inventive technology solutions for networking and equipment. We don’t know all the places we will be required to serve in 2019, but wherever and whenever we get the call, we will be ready to move out.
Competing every day with the best online and brick-and-mortar retailers gives the Exchange a unique blend of commercial efficiency and passion for improving military readiness and Quality of Life. At more than $8 billion in scale and thousands of facilities around the world, that cannot happen without modern, agile technology and development practices. Through thoughtful and deliberate planning and preparation, the Exchange remains all in for War fighters, past, present and future.