Words From the Director/CEO: Strategic Priorities for 2022

Despite a global pandemic, a sudden and expansive humanitarian mission, armed conflict in Europe and economic challenges not seen in some 40 years, Team Exchange has risen to the occasion, protecting, preserving and even strengthening the benefits we are honored to provide Soldiers, Airmen, Guardians and their families. We are truly ready for any challenge 2022 can bring.

Tom Shull
Exchange director/CEO

With this in mind, we have set the following aggressive, yet achievable, goals to do even more for the communities we are privileged to serve. These are low-risk, high-value targets that we are moving out on with an unwavering sense of urgency. Your ingenuity, drive and passion will be critical to accomplishing these objectives.

It is truly an honor to serve with you. Looking forward to seeing all we accomplish together in the coming months.

Leveraging Technology to Improve the In-Store Experience

Self-checkout launched at the Fort Benning Exchange in April. Plans call for self-checkout at
80 PXs, BXs and Expresses by September, with more than 300 total self-checkout lanes in place by year-end. Self-checkout frees associates to assist customers on the floor while reducing wait times for the best customers in the world.

Serving Up Tastes of Home

Upgrades to Exchange name-brand restaurant point-of-sale (POS) systems is allowing for integration with each brand’s loyalty program as well as compatibility with self-order kiosks, smartphone apps and more, providing a more seamless customer experience.

Full rollout with Popeyes’, Slim Chickens’ and Panera Bread’s POS has been completed and work to roll out brand POS systems at Starbucks and Charleys, with additional brands to follow, is ongoing.

Quick-serve restaurants (QSRs), such as Hunt Brothers Pizza, J. Walken Chicken and Chopz, have proven to be of critical importance to our Express operations. The Exchange now has nearly 90 QSRs, 15 of which opened last year. QSR sales increased 10% in 2021. The Exchange expects to open an additional 20 QSRs before the end of this year.

Intensifying Healthcare Services

Since 1985, the Exchange has provided healthcare services for active-duty family members, retirees, their families and now service-connected disabled Veterans and Department of Defense civilians. In 2021, the Exchange saw 1.3 million patients visit its health and wellness services, which include dental clinics, durable medical stores, nutrition centers, cryotherapy and vision centers.

The newest healthcare business, chiropractic care, arrived in January with the opening of the Exchange’s first Joint chiropractic clinic at Luke Air Force Base, followed by MacDill AFB later that month. Additional health and wellness opportunities are expected to include mental health, weight loss, family healthcare and additional ambulatory care services.

Reinventing ShopMyExchange.com

Industrywide, eCommerce in the United States has grown an average of 16% a year the last decade. The Exchange is broadening its online appeal to gain a larger share of this thriving market, focusing on meaningful key improvements to vastly expand ShopMyExchange.com’s merchandise selection, improve search results and rationalize fulfillment strategies.

Very soon, the Exchange’s online merchandise selection will expand beyond products carried within PXs and BXs. Store associates will play a key role in assisting shoppers in finding the items they want on ShopMyExchange.com to provide a true multi-channel shopping experience.

Recent merchandise expansions have already added 28% or 47,000 items to our 2021 eCommerce portfolio. Recently added vendors include ultimate sports apparel and fan gear partner Fanatics, footwear, apparel and accessories brand Ariat, private label apparel supplier Fifth Sun and outdoor product and climbing gear wholesaler Liberty Mountain, with many more to come in the near future.

Expanding MILITARY STAR_® Acceptance

The Exchange Credit Program is pursuing a change to how MILITARY STAR transactions are processed to offer seamless integration and acceptance across the entire military resale community, partners and selected third-party vendors. Today, we utilize our internal, closed loop environment for processing transactions. In the future, we will partner with an industry leader to leverage their network. The current process has served us well for many years but has limitations that demand both a financial and resource commitment from our business partners to integrate their point of sale or invest in a separate device to enable MILITARY STAR acceptance. As the overall Exchange footprint expands with name-brand food operations, healthcare services, mobile delivery options and new eCommerce partnerships, an easier integration method is needed.

As the expansion project moves forward, we will simultaneously be analyzing and exploring options to refresh and redesign the current Military Star rewards program. Current benefits and rewards features will be evaluated from a consumer engagement and financial perspective, along with research to identify potential new features. The team will prepare a recommendation for how MILITARY STAR should employ rewards going forward.

Reducing Overhead Expenses and Increasing Productivity

Together, we navigated the pandemic without layoffs or furloughs. This is an amazing accomplishment that reflects our collective commitment to family serving family.

Sound business practices that reflect current realities remain at the forefront of our efforts to deliver strong earned benefits to those who serve and have served. We remain fully focused on driving efficiencies at the HQ level while ensuring we have the people and resources in place to appropriately support our store and distribution center teams.

While the recent minimum wage increase has further strengthened our industry-leading compensation package, corresponding cost increases necessitate a higher level of productivity to allow the Exchange to remain competitive. Our collective focus on delighting the customers we are privileged to serve will ensure the wage increases are a strategic advantage.

Team Effort

Team Exchange is setting the high bar—no one brings more drive, passion and purpose to serving those who serve. Thank you for all you do to keep the Exchange benefit strong for service members, Veterans, retirees and their families, as well as the Coast Guard and DoD civilians we welcomed home during the past year.

Onward and Upward!