Words From the Director/CEO: A Job Well Done in 2022
Tom Shull
Exchange director/CEO
Team Exchange,
Congratulations on another successful year. During fiscal 2022, you provided outstanding service to those who serve, those who have served and their families.
The Exchange is expected to exceed sales and earnings targets for FY 2022 (final results will be available after the third-party audit is finished this spring), allowing us to provide higher-than-planned dividends to the Services for Quality-of-Life programs for Soldiers, Airmen, Guardians and their families.
As the third anniversary of COVID-19 approaches, the Exchange has avoided layoffs and furloughs related to the pandemic, remaining resourceful and focused on solutions. Here is some of what the team accomplished in 2022:
Using technology to improve the in-store experience
Launching self-checkout was one of 2022’s biggest successes. Nine months after debuting at the Fort Benning Exchange, self-checkout is available in 117 PXs, BXs and Shoppettes worldwide. The Exchanges rolled out nearly 500 SCO registers in 2022, with an additional 1,102 scheduled to open in 2023-2024.
Self-checkout has been popular with service members and their families, with some stores reporting adoption rates close to 100%. The technology reduces customer wait times, increases productivity and frees teammates to assist shoppers on the floor.
At Exchange restaurants, integration with brands’ point-of-sale (POS) systems has been a priority, allowing for compatibility with smartphone apps and self-order kiosks to provide a seamless customer experience, including mobile ordering, delivery, rewards programs and more. Starbucks’ POS integration is rolling out now, with Arby’s and Charleys targeted for completion in 2023. System integration at Panera Bread, Popeyes, Subway and Slim Chickens is complete.
Serving up tastes of home
The Exchange opened more than 40 name-brand restaurants in 2022—and served up many firsts. Our first Five Guys opened at Ramstein Air Base, and Europe/Southwest Asia Region’s first Panda Express (also at Ramstein) welcomed diners. Einstein Bros. Bagels launched at Misawa Air Base and Yokota Air Base in August and has since expanded to five total locations in Japan.
The Exchange now operates more than 110 quick-serve programs in its Expresses, including more than 20 that opened in 2022, with QSPs accounting for more than $30 million in sales, a more than 40% increase over FY21.
Increasing convenience to military shoppers, the Exchange expanded DoorDash delivery service to include food, quick-serve meals and snacks from Express stores. Since the expanded service launched at Forts Hood, Bragg and Carson in August, DoorDash has been added at 15 Expresses in CONUS, resulting in 5,400 orders and more than $104,000 in sales through the end of December. Since DoorDash launched at Exchange restaurants in July 2021, more than 1.1 million orders have been placed, accounting for more than $20 million in sales. Total orders for FY22 alone are expected to exceed 745,000.
Intensifying healthcare services
The Exchange continues to expand supplemental healthcare services for active-duty family members, retirees, their families and service-connected disabled Veterans and Department of Defense civilians, building on a nearly 40-year legacy. In 2022, the Exchange added seven dental offices, with the most recent opening in January 2023 at Joint Base McGuire-Dix-Lakehurst to bring the total to 20. Additionally, eight durable medical equipment and three chiropractic care offices opened in 2022.
Expanding ShopMyExchange.com
The Exchange made significant progress in transforming its online assortment through expanded vendor and retail partnerships that allow ShopMyExchange.com to ship tax-free items directly from third-party suppliers.
Through December 2022, drop-ship accounted for more than $180 million in online sales, a 15% increase above the previous year, with more than 500,000 items added to ShopMyExchange.com. Drop-ship items now account for 42% of the Exchange’s e-commerce business.
More than 140 drop-ship vendors were added in 2022, including Fanatics (fan gear); Journee Collections (shoes); Purple Mattress and Flash Furniture (furniture); Queen Bee (handbags); and Sawtooth (musical instruments). Brands expected to be added in FY23 include Home Depot, 1-800 Flowers, Luxottica (sunglasses) and David’s Bridal (special occasion apparel) and many more.
The expanded assortment broadens the Exchange’s online appeal to capture a larger share of e-commerce sales. ShopMyExchange.com is improving search results and reducing order-fulfillment costs.
Expanding MILITARY STAR acceptance
The MILITARY STAR® card is a tremendous force multiplier for Quality-of-Life programs. In addition to best-in-industry APR and other credit terms, cardmembers earn reward points as well as discounts on food and fuel. When shoppers use their MILITARY STAR card, it reduces costs through avoidance of costly bank transaction fees, saving military communities more than $30 million in 2022.
The Exchange Credit Program team is fully engaged in establishing agreements to make acceptance of the MILITARY STAR card easier for concession operations. As the Exchange rapidly increases name-brand restaurants, healthcare services, DoorDash delivery and more, updates to processing have taken on greater urgency. As this work continues, the team is re-evaluating rewards features and other offerings to further strengthen the value the MILITARY STAR card provides.
Reinvesting in communities
The Exchange completed a major shopping center renovation at Fort Rucker, where the new look debuted in December, concluding a two-year project. A new era of service and support began at Carlisle Barracks, where a renovation was unveiled in September after more than two years of work. A renovation at Fort Irwin was also completed in 2022. In May, a new Express opened in Fort Bragg’s Yarbrough Complex area; also at Fort Bragg, the renovation of the Honeycutt Express was completed this year. An upgrade to the Naval Air Station Joint Reserve Base Fort Worth Express was unveiled in late November. A renovation of a Fort Polk Express was also completed this year. The Exchange—not taxpayers—financed the majority of these projects, with some assistance from the Services.
The Exchange also completed a $4.7 million CONUS-wide lighting upgrade to Tube Light Emitting Diodes (LED) that will have a two-year payback and reduce utility expenses for the next decade.
Intensifying national brands
The Exchange intensified national brands, adding Old Navy for the family at ShopMyExchange.com and roughly 60 stores, with plans for more in 2023. Old Navy is the newest brand launch to include children’s apparel and accessories in the product lineup, with Merchandising leaders selecting the best children’s merchandise with military shoppers at top of mind. During 2022, the Exchange welcomed American Eagle, with 46 Exchange stores rolling out the brand’s apparel, with more in 2023; Aerie, with products at about 30 select Exchange stores; and Gap at 15 select PXs and BXs worldwide. All brands are available at ShopMyExchange.com.
The addition of TOP TIER-certified branded fuel that began in late 2021 gained momentum in 2022. As of mid-January, more than 150 out of a planned nearly 180 gas stations have begun offering Valero, BP/Amoco and Marathon branded fuel, with the transition to Amoco nearly completed. Branded fuel improves the Exchange’s already-secure supply chain, enhancing support of military communities during emergencies and disasters.
Family Serving Family!
Team Exchange is steadfast in serving those who serve. During these times of unprecedented challenges, we have emphasized solutions and innovation.
Thank you for your dedication to keeping the Exchange benefit strong for service members, Veterans, retirees and their families, as well as the Coast Guard and DoD civilians we are also honored to serve.
The Exchange has been serving our Nation’s heroes for nearly 128 years. Here’s to keeping the benefit strong! It is an honor to serve with you.
Onward and upward!
