December 19th,2012
Dear: Exchange vendors,
Like any good strategist, the Army & Air Force Exchange Service is preparing for tomorrow, today. As you know, the retail battlefield is full of potential challenges. Competitors struggle to adjust to the terrain to grow and prosper.
We recently completed a comprehensive assessment on how to better leverage the Exchange’s talents, abilities and strengths to operate in the most efficient and effective manner. As part of this review, the organization has introduced fourteen strategic priorities to drive sales, cut costs and ensure the Exchange benefit’s long-term viability.
The priorities, specific to leadership, management, selling, merchandising, marketing and supply chain, require the support of not only Exchange associates, but those we do business with as well.
We cannot do it alone. By working with companies like yours, we plan to increase sales on and offline while reducing costs. We invite your ideas and are ready to implement new tactics within the context of existing contracts or with new opportunities (subject to current contracting rules and regulations).
For example, together we can work to intensify national brands at the Exchange. Today, our stock assortment mix is 45% national brands/55% exclusive brands. Our goal is to drive toward 65% national and 35% exclusive. To achieve this, we need to provide solution selling, store-in-store concepts, ensure signing supports the brand and use co-branding with prominent fashion and accessory labels, with exclusive products, from key brands.
Another opportunity is online. Nationwide Internet sales have almost doubled since 2005.The Exchange is significantly improving its online experience so customers view our site as their destination of choice.
On an installation level, we are repositioning main stores to improve the effective utilization of existing facilities. We are actively re-purposing underperforming space for high-demand products, seeking strategic partnerships to drive synergistic relationships and optimizingcategories and planograms to improve assortments.
The Exchange benefit is strong, but as you can see we are not resting. If you are a vendor doing business with the Exchange, we encourage you to bring your best ideas to the table.
The Exchange is working to be a “change agent” with a focus on strategic priorities such as reducing expenses and growing Express stores and concessions. The organization is actively enlisting the support of vendorslike you to accomplish these objectives.
Like the military community it serves, the Exchange is transforming and readying for the future. The organization is committed to those it serves and stands ready to work with you to make a better benefit for future servicemembers, today.
Sincerely
THOMAS C. SHULL
DIRECTOR/CEO