AAFES building stronger exchange benefit

  • Published
  • By Judd Anstey
  • AAFES Media
DALLAS --  Shifting priorities and demographics combined with a dynamic retail landscape aggressively marketing to troops and their families is getting the attention of the military's oldest and largest exchange service. In fact, the Army & Air Force Exchange Service is so concerned about its future relevance that the "military command with a retail mission" is launching its most ambitious construction campaign in its 111 year history.

"It's not 1895," said AAFES' Commander Maj. Gen. Bill Essex. "Opening a tiny store on a corner of the post won't cut it these days. Today, troops have more choices than ever before. Now is the time to invest and strengthen the benefit so we are not only ready to handle current challenges, but future ones as well."

AAFES is committing more than $1 billion over the next four years towards the planning, design and construction of bigger and better exchange facilities as well as the improvement or renovation of existing BX/PX operations. The $1.1 billion earmarked for 85 "capital improvement" projects is critical to AAFES' ability to have facilities in place as troops and their families are impacted by military transformation initiatives such Base Realignment and Closure as well as Global Defense Posture Realignment.

"AAFES has a dual mission to deliver products and services while returning earnings to military Morale, Welfare and Recreation programs," said AAFES' Chief Operating Officer Mike Howard. "My concern for the future relevancy of AAFES doesn't begin and end at the BX or PX door. Failure to invest in AAFES' future today could negatively impact many military benefits beyond just the exchange tomorrow."

As the retail environment changes, so must AAFES. Building on the established BX/PX brand, AAFES' engineers, architects and planners feel that prototypes are the next logical step in the evolution of exchange shopping centers. Designed to better meet the needs of military shoppers, the prototype format provides new, larger stores at the best possible cost and time-to-market.

"Prototypical designs allow AAFES to improve on the shopping center brand by incorporating military families' unique desires and expectations," said AAFES' Senior Vice President of Real Estate Dan Metsala. "Standardized 'one-stop' facilities can improve customer satisfaction, build loyalty and increase customer shopping duration times to ultimately increase sales and earnings."

Bottom line return on investment is important because roughly two-thirds of AAFES earnings are paid to MWR programs. In the past 10 years, approximately $2.4 billion has been con¬tributed by AAFES to military MWR programs to spend on quality of life improvements, including: Youth Services, Armed Forces Recreation Centers, arts and crafts, aquatic centers, post functions and golf courses. In addition to funding MWR programs, AAFES earnings are used to build new stores or renovate existing facilities without expense to the Federal government. Funds to contract these new or replacement facilities come entirely from sales of merchandise and services.